Key Takeaways From Climeworks & Shopify Webinar – The Business Case For CDR

Key Takeaways From Climeworks & Shopify Webinar - The Business Case For CDR -carbon Herald
Source: Climeworks

Expanding the pool of carbon dioxide removal (CDR) buyers is an important part of achieving significant climate impact. Climeworks hosted an event on March 1st, 2023 with Shopify – a prominent carbon removal buyer, to discuss the business case for CDR and the benefits stemming from businesses being proactive on climate change mitigation. A recording of the webinar can be watched here.

Climeworks invited Mitchel Selby, Program Manager at the Sustainability Fund of Shopify, to exchange perspectives on the importance of carbon removal, what motivates businesses to act now on climate change and how to make sure you are selecting high-quality carbon removal credits. 

Relevant: Climeworks Delivers First Verified Carbon Removals To Corporate Customers

Shopify is one of the earliest CDR buyers and continues to drive and inspire climate change action. Corporate Partnerships Manager at Climeworks, Laurent Müller led the event and highlighted the three topics that were looked into together with Shopify: the reasons for businesses to buy CDR, how to select the right criteria among all CDR solutions on the market, and why there is an urgency to act now on CDR. 

According to Mr Müller, some key motivations that make Climeworks’ customers start their carbon removal journey, among many, are: 

  • to show a leadership role in reducing emissions;
  • to anticipate regulatory actions like price increases on emitting carbon.

To a question what is Shopify’s motivation for buying CDR, Mitchel Selby answered:

  • to preserve Shopify’s business in the long-term;
  • to send a demand signal to the market of what buyers want to exist in the long-term as according to Shopify, CDR will be a large piece of emissions reductions along with deep decarbonization of the economy;
  • to send a demand signal to the innovators to enter the market with novel carbon removal solutions;
  • Shopify believes all businesses and the economy should be headed towards net zero. 

Mr Selby also commented that “the amount of CDR Shopify will need by 2030 is well above the current supply of carbon removal available today in the market and we are just one company. That just further indicates the need of buying CDR now to increase supply.” 

Credit: Climeworks

First-time carbon removal buyers will also find a lot of solutions with different levels of quality, therefore Shopify is open to share its expertise on the matter, offering its Carbon Removal Buyer Guide for people in a need to learn how to get buy-in from internal stakeholders, construct their portfolio, retire the credits they receive, and more.

During the seminar, Mr Selby shared Shopify’s seven critical criteria that the company uses when it buys carbon removals. Four of them are considered non-negotioable and the other three – critical. They are as follows:

  • Net negativity- the solution must capture and store more atmospheric CO2 than it releases over its lifecycle. 
  • ­Verifiability- the company must be able to quantify how much CO2 has been captured and stored.

Relevant: Climeworks & Others Call For Creation Of CDR Standards

  • ­Additionality – the carbon removal wouldn’t occur if you didn’t make this purchase.
  • Safety and environmental justice – the supplier must be taking steps to mitigate negative externalities while deploying its technology in a way that is fair and just. 
  • Cost – the solution must have the potential to reach a low cost at scale to be economical for all buyers, even price-sensitive ones. Prioritized are solutions that can get close to or below $100/tonne at scale.
  • Durability – the solution needs to store CO2 for a longer period of time. 
  • Capacity – the solution needs to be able to reach a massive scale on its own.

To the criteria of cost, scalability and capacity, Mr Müller explained that currently, Climeworks’ cost of a ton of CO2 removed and permanently stored is in the higher triple digits, therefore the company wants to reduce it via the scale effect – multiplying the quantity of plants, building larger capacity and by increasing their efficiency, investing heavily into R&D. 

To the question of why a business should act now on buying carbon removal rather than wait for supply to increase and prices to drop, Mr Selby answered that waiting doesn’t work as in order for supply to increase and therefore prices to decrease, companies should buy now to make that happen.

Scientists predict that the world would need to remove around 10 gigatons of CO2 per year from the atmosphere by 2050 which shows the level of scale carbon removal solutions need to get to.  Therefore purchasing CDR now to drive up supply and shorten the cost curves is needed urgently by companies. 

Businesses also could be required under compliance schemes in the future to get to net zero, so if they don’t act now but rather wait for 2030, they are not expected to have the carbon removal supply they need to achieve net zero emissions.

Acting now on climate change mitigation is a must for businesses and corporates as delaying climate action would mean giving up the benefits that stem from it in the long and short term. Climate change is a crisis that affects people’s lives and well-being on the planet, therefore there is a transferable risk from that threatening businesses’ existence.

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