Stripe, Meta (previously Facebook), Alphabet (parent company of Google), Shopify, and McKinsey agree to a $925 million investment. The corporations pledge to invest the amount for acquiring absorbed carbon between now and 2030, which is a significant investment in carbon removal technology.
This new initiative by the big tech giants, dubbed Frontier, aims to accelerate the adoption of the still-emerging technology while also making it more inexpensive for other businesses interested in buying captured carbon to offset some of the planet-warming pollutions they generate.
There are existing systems in place to filter CO2 from the air, as well as initiatives to trap CO2 and deposit it in rock formations or the ocean. However, the current capacity is little in relation to what some climate scientists believe is required. Furthermore, the technology remains prohibitively pricey.
Frontier aims to lessen expenses by increasing demand for the service. It will ultimately function as an intermediary between buyers who want to pay to reduce greenhouse gas emissions and suppliers who can do so. It will have to establish much of the groundwork for this type of market, from developing criteria for assessing carbon removal projects to devising some form of system to grant credits to firms that demonstrate how much CO2 they’ve paid to remove from the environment.
Stripe owns Frontier entirely, while the other firms provide seed capital. Stripe’s new business expands on the company’s earlier efforts to promote carbon-removal solutions. Stripe initially pledged to invest $1 million per year in 2019 to remove CO2 from the atmosphere. The following year, the online payments platform began providing its clients with the option of donating a percentage of the proceeds from each sale to carbon-reduction programmes. Contributions from such consumers will also be incorporated into the Frontier programme.
To avoid some of the issues encountered in prior carbon offset markets, such a market for carbon removal will have to tread cautiously. Carbon offset schemes have a history of failing to sequester CO2 in the long run, despite promises made by firms, that invested in them that they were practically eliminating their carbon footprint.