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Stripe, Alphabet, Meta, Shopify, McKinsey spur carbon capture market

Stripe, Alphabet, Meta, Shopify, McKinsey spur carbon capture market

Pods, operated by Carbfix, contain technology for storing carbon dioxide underground, in Hellisheidi, Iceland, Tuesday, September 7, 2021. Startups Climeworks AG and Carbfix are working together to store carbon dioxide removed from the air deep in the earth to reverse some of the damage that Carbon dioxide emissions are causing damage to the planet. Photographer: Arnaldur Halldorsson/Bloomberg via Getty Images

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Online payments technology provider Stripe is teaming up with several other companies, including Google parent Alphabet and Facebook parent Meta, to commit nearly $1 billion to stimulate the carbon capture market.

The companies announced on Tuesday the creation of Frontier, which plans to buy $925 million worth of permanent decarbonization from companies developing the technology over the next nine years.

Frontier will be a wholly owned subsidiary of Stripe. Alphabet, Meta, e-commerce platform Shopify and consulting giant McKinsey are committing to buy some carbon capture solutions.

Stripe will also provide Frontier customers with its Stripe Climate program, which allows online sellers to use the company’s platform to allocate a portion of sales to decarbonization.

The aim of the investment is to revitalize the emerging industry.

The United Nations Intergovernmental Panel on Climate Change has estimated that to reduce the global warning to 1.5°C above pre-industrial levels, 6 billion tons of carbon dioxide per year must be removed from the atmosphere by 2050. Less than 10,000 tons of carbon has been captured dioxide so far.

The Frontier Initiative indicates that momentum is beginning to build in space.

“Sentiment is changing about both carbon capture and carbon dioxide removal,” said Julio Friedman, chief scientist at Carbon Direct, which invests in and advises carbon removal solutions.

“That is changing in part because we haven’t succeeded in the climate at the speed and scale required,” Friedman said. “In short: we’re failing and we need a bigger boat — a boat that includes all the serious options for mitigation.”

The Sixth Assessment Report of the Intergovernmental Panel on Climate Change, released on April 4, specifically mentioned the importance of carbon sequestration, saying that it is “necessary to achieve net net emissions of carbon dioxide and greenhouse gases at global and national levels, and to offset remaining emissions” which are difficult to mitigate “. She said.

Frontier development is among other company and government initiatives that are sinking billions into technology.

For example, Swiss carbon sequestration company Climeworks raised a $650 million funding round on April 5. In the United States, a bipartisan infrastructure bill included $3.5 billion in direct investment by the federal government in carbon capture technologies, while both the United Kingdom and the European Union committed to sequestering 5 million tons of carbon dioxide annually.

Funding to turn the flywheel

The Advanced Market Commitment financing model was used to develop pneumococcal vaccines for low-income countries in 2009. A group of funders collaborated with Gavi, UNICEF and the World Bank to allocate $1.5 billion in purchases to spur vaccine development. AMC has helped vaccinate millions of children.

But this is the first time the model has been used to fund large-scale decarbonization technologies.

Frontier’s job will be to collect financial commitments from companies and governments that want to purchase carbon capture solutions to meet their net-zero pledges, screen suppliers of those solutions, and then pay the suppliers once the solutions are delivered.

The group plans to announce more details about where it will spend the money later this year. Companies will be selected if their technologies can store carbon for more than 1,000 years, have a path to being affordable on a large scale — defined as less than $100 a ton by 2040 — and have a path to remove more than half a gigatonne of carbon by 2040, from Among other factors.

The Frontier News was greeted by Mike Schroepfer, former Facebook chief technology officer, who recently announced that he will be dedicating his time to combating climate change.

“This is huge and I am so proud dead Schroepfer said on Twitter: “Even the most conservative climate models say we need to get CO2 out of the atmosphere to avoid the worst of the climate crisis. There are many great technologies out there but they don’t have a market for their products.”

However, not everyone sees focusing on decarbonization technologies as a good thing.

“Honestly, I really wish these same companies were investing the same amount of money in clean energy solutions,” Michael E. Mann, a professor of atmospheric sciences at Penn State told CNBC. Mann, who is also director of the Pennsylvania Earth System Science Center (ESSC), said.

Globally, carbon emissions must be reduced by 50% this decade, Mann said.

Carbon sequestration “could play a role later down the road, but what we need right now is a rapid and dramatic transition away from fossil fuel combustion to renewable energy,” he said.

“The current Russian invasion of Ukraine, thanks to Europe’s dependence on gas and oil, is a reminder of the continuing dangers of our dependence on fossil fuels,” Mann told CNBC. “What we need is to solve this problem at its source, not to apply bandages to the extremities.”

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