Carbfix-powered pods feature technology to store carbon dioxide underground, in Helishaid, Iceland, on Tuesday, September 7, 2021. Startups Climeworks AG and Carbfix work together to store carbon dioxide removed from the air deep underground to cancel some of the damage that CO2 emissions do to the planet. Photographer: Arnaldur Haldorsan / Bloomberg via Getty Images
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Internet payment technology provider Stripe is teaming up with several other companies, including parent company Google Alphabet and Facebook with Meta, to spend nearly $ 1 billion to boost the carbon capture market.
On Tuesday, the company announced the creation of Frontier, which is committed to acquiring permanent carbon removal worth $ 925 million 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 being made at the bank and are committed to purchasing some carbon capture solutions. Stripe will also provide Frontier customers through its Stripe Climate program, which allows online retailers using the Stripe platform to make part of their sales to remove carbon.
The goal of the investment is a turbocharged emerging industry.
The UN Intergovernmental Panel on Climate Change estimates that an average of 6 billion tonnes of carbon dioxide will have to be removed from the atmosphere each year to limit global warnings by 1.5 degrees above pre-industrial levels by 2050. However, less than 10,000 tons of carbon dioxide have been captured to date.
Thus, the momentum in space begins to grow.
“Attitudes are changing both in terms of carbon capture and carbon sequestration,” said Julio Friedman, chief scientist at Carbon Direct, which invests and advises companies on carbon removal solutions.
“This is changing in part because we are not succeeding in climate at the right pace and scale,” he added. “In short, we are failing and we need a bigger boat that includes all the serious mitigation options.”
The IPCC Sixth Assessment Report, published on 4 April, in particular, noted the importance of carbon sequestration, saying that “net zero emissions of CO2 and greenhouse gases need to be achieved both globally and nationally, balancing ‘heavy’ residual emissions,” the report said.
In addition to the Frontier announcement, companies and governments are spending billions on technology.
For example, the Swiss carbon sequestration company Climeworks on April 5 attracted a round of funding of $ 650 million. In the U.S., a two-party infrastructure bill included a $ 3.5 billion direct investment by the U.S. government in carbon capture technology, while the UK and the EU have committed to catching 5 million tonnes of carbon dioxide a year.
Funding to turn the flywheel
To develop pneumococcal vaccines for low-income countries in 2009, an advanced model of market commitment financing was used. The sponsor group collaborated with Gavi, UNICEF and the World Bank, $ 1.5 billion was purchased to stimulate vaccine development. This AMC has helped vaccinate millions of children.
This is the first time the model has been used to fund carbon removal technologies on a large scale.
Frontier’s role will be to collect financial commitments from companies and governments wishing to purchase carbon capture solutions to fulfill their zero-value promises, test vendors of those solutions, and then pay vendors once the solutions are delivered.
More information on where she will spend the money, the group plans to report later this year. Companies will be selected if their technology can store carbon for more than 1,000 years, be affordable at a scale – set at less than $ 100 per tonne by 2040 – and will be able to remove more than half a gigaton of carbon by 2040, among other factors.
The news was stirred by former Facebook chief technology officer Mike Schrepfer, who recently announced he would spend his time tackling climate change.
“It’s huge and I’m very proud The goal is the launch partner, “Schrepfer said on Twitter.” Even the most conservative climate models say we need to remove carbon dioxide from the atmosphere to prevent the worst climate crisis. There are a lot of cool technologies, but they don’t have a market for their product. ”
Not everyone, however, sees an emphasis on carbon removal technology as a good thing.
“Honestly, I’d really like these same companies to invest the same amount of money in clean energy solutions,” said CNBC’s Michael E. Mann, a professor of atmospheric science at Penn State. “As I said in the New Climate War, there is no evidence that carbon sequestration can be carried out on the scale needed to cut global carbon emissions in the right time,” said Mann, who is also a director. Penn State System Research Center (ESSC).
Globally, carbon emissions need to be reduced by 50% this decade, Mann said.
Carbon capture “may play a role in the future, but a rapid and abrupt transition from fossil fuel combustion to renewable energy is needed at the moment,” Mann said.
“The current Russian invasion of Ukraine, caused by Europe’s dependence on their gas and oil, is a reminder of the continuing danger of our dependence on fossil fuels,” Mann told CNBC. “We need to solve this problem at its source, not apply patches to the edges.”