Corporate giants launch $925-million fund for carbon removal
Stripe, Alphabet, Shopify, and McKinsey & Company have launched Frontier fund, a public benefit corporation aimed at supporting carbon removal startups and lowering the cost-per-ton to remove CO2 from the earth’s atmosphere.
Most climate models agree that carbon reduction efforts won’t be enough to avoid the worst effects of climate change, so nascent carbon removal technologies are an important area for investment. As of 2021, less than 10,000 tons of carbon dioxide have been permanently removed by new technology – 1 million short of the annual scale needed.
Though growing forests is a key way to remove carbon from the air, the increasing prevalence of forest fires risks vastly reducing the usefulness of the method.
To help drive technology improvement and cost reduction, Stripe – a leading payments technology company – launched its wholly-owned public benefit corporation Frontier. Together with partners Alphabet, Shopify, and McKinsey, $925 million will be invested between now and 2030 to buy offsets from promising carbon removal startups.
Frontier is an advanced market commitment (AMC), a funding concept previously used to accelerate the development of pneumococcal vaccines for low-income countries. A team of technical and commercial experts – led by Stripe’s climate head Nan Ransohoff – will facilitate offset purchases from high-potential startups on behalf of the initial group of buyers, though Frontier plans to open up to new buyers eventually.
The goal of the AMC is to remove the barriers of uncertainty around long-term demand and unproven technologies and “send a strong demand signal to researchers, entrepreneurs, and investors that there is a growing market for these technologies,” according to Frontier’s website.
“If we don’t hustle and figure out the real potential of these technologies, the world will be put in a challenging position,” Ransohoff told Bloomberg News. “We are relying on technologies that we don’t know can get to that scale.”
