Can the worldâs technology and consulting giants turn carbon removal into a multibillion-dollar global industry? That is the question Nan Ransohoff, head of climate at payments firm Stripe, is trying to answer. She now also heads , an ambitious bid launched last month to use an approach borrowed from vaccine creation to turbocharge early stage companies taking carbon out of the atmosphere. Finding ways to do so is now considered vital for averting catastrophic climate change.
âWe learned from the latest IPCC report that we are going to have to do a huge amount of carbon removal, in addition to a huge amount of emissions reduction, in order to mitigate the worst effects of climate change,â says Ransohoff, referring to the Intergovernmental Panel on Climate Changeâs landmark assessment last month on how to rein in rapidly rising global temperatures. She says the challenge with CO2 removals is they have no intrinsic value and therefore few âcustomersâ to pay for them.
Ransohoffâs solution is a $925 million advance market commitment (AMC) from Meta, Alphabet, Shopify and McKinsey to become the customers for tonnes of carbon that companies remove this decade. Notably, the initial alliance doesnât include Microsoft, $1 billion to advance removal technologies.
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Exactly what those technologies might be remains to be seen. Ransohoff mentions Charm, a US company turning crop waste into an oil to be buried underground; Running Tide, a start-up using kelp to bury carbon in the sea bed; and Climeworks, the Switzerland-based poster child of âdirect air captureâ, machines using materials to absorb carbon in the atmosphere. But she wonât be drawn on which tech is the most promising. âWe are not ready to pick a horse,â she says.
In the meantime, Ransohoff says there is a âmassive supply shortageâ of carbon removals, something Frontier hopes to address by showing there is demand for removals and bringing down their cost.
âTo raise finance, proposed carbon removal projects must be confident of future revenues, which such forward contracts can provide,â says Paul Davies from the Coalition for Negative Emissions, an industry group for companies working on carbon removals. âThis innovation will accelerate the financing of new projects.â
Frontierâs criteria for the carbon it will pay for include that it will stay stored for at least 1000 years and that solutions donât compete with arable farmland. Ransohoff is adamant the initiative must avoid the pitfalls of carbon offsetting. Those include flopped forestry projects and accusations of failing to deliver âadditionalityâ, such as wind farms that would have happened anyway or . âWe need to learn from what didnât work with offsets so that we donât repeat those mistakes,â she says.
While the IPCC was clear that billions of tonnes of CO2 will need to be removed annually by the end of the century to hit the worldâs temperature targets, some people have suggested that CO2 removals risk being a moral hazard â allowing polluting industries to maintain the status quo. Ransohoff rejects that. âCarbon removal is not an excuse not to do emissions reduction. We have to do both.â
One key detail that Frontier wonât reveal is how many tonnes of carbon it hopes $925 million will buy. If every tonne was bought at $600 each, as Climeworksâ removals currently cost, the AMC would on average remove just over 170,000 tonnes a year of humanityâs annual 40 billion tonnes of emissions. Ransohoff wonât say what a reasonable price per tonne is. But she says the current cost is less important than schemes that have the prospect to be low cost and high volume in future, ideally less than $100 a tonne, a level on par with CO2 removals from forests. The first purchases are due within months.
By the end of last year, less than 10,000 tonnes of CO2 had been permanently removed by companies, which Ransohoff says is âinsaneâ. The legacy of Frontier, she hopes, will be an industry on a clear path to removing billions of tonnes every year in coming decades. âThe problem of climate is, time isnât on our side,â she says. âOne path is to let this field mature on its existing trajectory. But we need to compress a huge amount of progress into a very short period of time.â
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