Meta – formerly Facebook, Alphabet – the parent company of Google, Shopify, Stripe, and McKinsey Sustainability have launched Frontier, an advance market commitment (AMC) to accelerate the development of permanent carbon removal technologies.
The founding companies of Frontier plan to commit $925 million over the next nine years to purchase permanent carbon removal from suppliers building promising new solutions.
The head of Climate at Stripe, Nan Ransohoff, said: “With Frontier, we want to send a loud demand signal to entrepreneurs, researchers, and investors that there is a market for permanent carbon removal: build and we will buy.”
The AMC model was successfully piloted a decade ago to accelerate the development of pneumococcal vaccines for low-income countries, saving an estimated 700,000 lives.
This is the first time the model is being applied to carbon removal at scale. Radical emissions reductions will be essential to avoiding the worst effects of climate change.
However, recent reports from the Intergovernmental Panel on Climate Change make clear there is currently no pathway to keeping global temperature increases within 1.5C without permanently removing gigatons of CO2 already present in the atmosphere and ocean.
Carbon removal technology has made significant progress, but it is still not on track to reach the required scale. As of 2021, fewer than 10,000 tonnes of carbon dioxide had been permanently removed from the atmosphere through these kinds of technologies.
IPCC models require an average of around 6B tons of annual CO2 removal by 2050 to hit the 1.5C target.
The Frontier AMC is designed to give the industry confidence to begin building today, and to do so with urgency.
Kate Brandt, the chief sustainability officer at Google, said: “At Alphabet, we know firsthand from our long-standing history of working to advance new climate solutions that signaling early demand can spur innovation and lower the price for everyone. That’s why we are joining this exciting coalition of climate leaders, who jointly see the promise of new carbon-removal technologies and the power of sending a clear demand signal to the market.”
How Frontier supports carbon removal
Frontier conducts due diligence and facilitates carbon removal purchases on behalf of buyers, in two forms:
- For early-stage carbon removal suppliers piloting new technologies, buyers will enter into low-volume prepurchase agreements.
- For growth-stage suppliers scaling their technologies, Frontier will facilitate offtake agreements between individual buyers and suppliers.
These agreements promise to purchase future tonnes of carbon removal if and when they are delivered, enabling suppliers to secure financing to scale their deployments.
When tonnes of CO2 are removed, the carbon removal companies get paid, and removal tonnes are issued back to buyers.
The head of Sustainability at Shopify, Stacy Kauk, said: “Shopify’s message has been loud and clear since launching our Sustainability Fund back in 2019: Join Us. Climate change can only be solved if we come together, and that’s what we’re doing with this advance market commitment. Our combined demand signal, through Frontier, is exactly what the carbon removal market needs to take the next step.”
Frontier will identify technologies with the greatest long-term potential and will help them scale through purchases, as well as ongoing advice and support.
In practice, this will likely mean paying higher initial prices per ton to accelerate technologies that meet specific criteria, including
- Permanence: Stores carbon permanently (>1000 years)
- Physical footprint: Takes advantage of carbon sinks less constrained by arable land.
- Cost: Has a path to being affordable at scale (<$100/ton)
- Capacity: Has a path to being a meaningful part of the carbon removal solution portfolio (>0.5gt/year)
- Environmental justice: Ensures meaningful environmental justice outcomes via a robust process focused on local public engagement
A wholly owned subsidiary of Stripe, Frontier will also be funded by the tens of thousands of businesses who purchase carbon removal via Stripe Climate.
This will make Frontier the world’s largest coalition of carbon removal purchasers by funding and membership.
The head of Energy Strategy at Meta, Peter Freed, said: “We are committed to reaching net zero emissions across our value chain in 2030 through new partnerships and innovative solutions in emissions reduction and carbon removal. Frontier is an important step to help accelerate the development and adoption of carbon removal technologies for a more sustainable world.”
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