Stripe, Alphabet, Shopify and other tech giants are teaming up to purchase almost $1 billion worth of carbon offsets.
The carbon offsets purchases are set to take place through a new fund set up by Stripe Inc.
The Frontier fund, as it is called, has received funding more some of the world’s largest tech corporations, including Meta Platforms Inc., McKinsey & Co. Inc.
The fund will support startups specializing in carbon dioxide removal (CDR) – technology that many see as key to mitigating the climate crisis – by helping them scale and bring down the cost of removing CO2 from the atmosphere.
This will benefit both companies willing to offset their emissions by purchasing CDR from such companies, and subsequently also put society on the path to achieving net-zero emissions faster.
Offsets purchased by large enterprises, such as the above, can help facilitate the business model necessary for effective carbon removal.
And according to the latest report by the Intergovernmental Panel on Climate Change (IPCC), humanity will have to remove as much as 6 billion metric tons of CO2 from the air by 2050 if we stand a chance at stopping rising temperatures.
However, much of the technology currently available cannot yet reach that scale.
And that is where the Frontier fund comes into play, as it is based on Stripe’s existing model that has been tweaked and perfected over the last two years.
The way this model works is that CDR startups can pitch their technologies to Frontier, upon which the fund can evaluate them, by taking in account factors, such as permanence, cost, capacity, footprint and others.
Upon successful evaluation, Frontier will spend millions of dollars for the delivery of tons of removed carbon as offsets, based on a previously negotiated price per ton of CO2.
Read more: Shopify Backs 9 New Carbon Removal Companies