By Susanna Twidale
LONDON (Reuters) - Online payments firm Stripe and e-commerce group Shopify have committed to spend $11 million supporting projects to remove carbon dioxide from the atmosphere and oceans in the latest round of the Frontier fund set up to develop the technology.
Even with pledges of huge reductions in emissions, many scientists believe extracting carbon dioxide (CO2) by using nature or technology will be essential to meet global goals set under the Paris climate agreement to curb climate change.
Frontier was set up by global commerce and technology firms Stripe, Shopify, Meta, Alphabet (NASDAQ:GOOGL) and McKinsey Sustainability, with the aim of investing $925 million on carbon removal credits between 2022 and 2030 to help speed deployment and drive down costs.
"Removals don’t have an intrinsic value at the moment, and we want to give those building the technology the confidence there are going to be buyers," Nan Ransohoff, head of climate at Stripe and head of Frontier, told Reuters.
In this round, Shopify and Stripe have committed to buy 7,011 tonnes of credits from seven companies for a total of $3.5 million, with prices ranging from $227 to $1,318 per tonne depending on the project.
They have also committed an additional $7.5 million contingent on projects reaching technical milestones.
Due to their early stage and complexity, carbon removal credits are much more expensive than traditional offsets which pay for emissions cuts elsewhere to compensate for emissions companies have not cut themselves.
The removal projects include Inplanet, which uses enhanced rock weathering to sequester CO2, Carbin Minerals, which uses mine waste to trap CO2, and Captura, which is seeking to remove CO2 from ocean water.
Stripe will spend a further $0.5 mln supporting research and development at two other early-stage companies.
Stacy Kauk, Shopify’s head of sustainability, said the credits would be delivered over the next few years depending on the project type.
Shopify will either retire them to help meet its own emission reduction goals, or offer them to customers via its Planet app, she said.