Carbon Engineering (CE) reached a new milestone – it signed an agreement with e-commerce giant Shopify for 10,000 tons of CO2 capture and storage. The announcement came out on March 9th, 2021. That makes Shopify the first corporation as a client for Carbon Engineering’s direct air capture (DAC) services. With that agreement, the company ensures its first paying customer for permanent carbon removal capacity.
Shopify’s intention with this deal is “to kickstart the market”. The company expects its customers and other companies to follow suit and invest in carbon removal. The online commerce giant hopes that eventually, economies of scale will reduce the costs so the technology can be more widely deployed.
“We wanted to make sure we were sending a very strong market signal about the importance of supporting innovative technologies like this,” said Stacy Kauk, director of Shopify’s Sustainability Fund.
Carbon Engineering Deployment Plan
Carbon Engineering is planning to fulfill its commitment through its US partner 1PointFive. The company is developing CE’s facility in Texas, capable of removing 500,000 tons of CO2 per year. The facility is expected to be completed by 2024.
It was not disclosed how much Shopify agreed to pay for carbon removal. According to the CEO of Carbon Engineering Steve Oldham it is “significantly” lower than $600 per tonne which is the cost of a competitor’s technology. Oldham also wrote in an email “I’m confident that the costs could be well below $200 per tonne by 2030”.
“Early customers for direct air capture (DAC) – especially companies with ambitious climate goals – can have outsized impact today,” said Noah Deich founder of the climate-focused NGO Carbon180. If corporate leaders invest in DAC services to hit their “net zero” pledges faster, that could create more followers. It would also make DAC technology cheaper and more accessible for customers in the future.
Large-scale deployment of CO2 removal technologies like DAC is the next critical step to make net zero ambitions a reality. Generating market interest and securing customers is a huge milestone right now for companies like CE. They need that to make a step further into their next stage of development.