Frontier, which is owned by the payment processing company Stripe and is a public benefit company, announces that it has enabled the purchase of $7 million in carbon removal from 12 recently founded corporations in the expanding but young industry. The strategies to eliminate carbon dioxide vary significantly, such as the implementation of alkaline byproducts obtained from industrial processes to gravel on roads, serving as an effective carbon sink; using calcium to mineralize and take away carbon dioxide from the water; and using silicate rock powder on rice paddy farms in India. Frontier mentions that the number, variety and excellence of the applications it has received in recent years have all been increasing.
This Thursday, Stripe, Shopify, and H&M Group announced that they are investing $7 million into the carbon removal of twelve new startups. This effort is facilitated by Frontier, a public benefit company owned by the payment processing company Stripe, which is set to launch in April 2022. In order to support the growth of this emerging sector, Frontier serves as an intermediary between its member companies and the carbon removal startups. The participating ventures encompass Airhive, Alkali Earth, Banyu Carbon, Carbon Atlantis, CarbonBlue, CarbonRun, EDAC Labs, Holocene, Mati, Planetary Technologies, Spiritus Technologies, and Vaulted Deep, with varying techniques for extracting the carbon dioxide. Examples of these include Alkali Earth's use of industrial byproduct to naturally sequester carbon from roadways, CarbonBlue's mineralization of freshwater or ocean water, and Mati's introduction of silicate rock to agricultural fields. Frontier also provides two pathways for its member companies to procure carbon removal, pre-purchase agreements, and offtake agreements. The $7 million transaction represents the first pre-purchase agreements, allocating between 58 to 1,666 tons of carbon removal, depending on the startup.
Offtake agreements involve larger amounts of money being given in advance for carbon removal and sequestration that will take place in the future. Frontier announced a $53 million agreement with Charm Industrials to sequester 112,000 tons of CO2 between 2024 and 2030; Charm does this by converting organic material like corn stover into bio-oil, which is then injected into abandoned oil and gas wells.As part of its pre-purchase program, the $1 billion plus that Frontier has secured from its member companies, like Alphabet, Autodesk, JPMorgan Chase, McKinsey, Meta and Workday, is mainly allocated for offtake agreements. In addition, the pre-purchase program is optional for member companies, yet all partake in the offtake deals. Joanna Klitzke, Frontier's Procurement and Ecosystem Strategy Lead, told CNBC on Tuesday that the pre-purchase program will help create a portfolio of gigaton scale removal, starting today.
On Thursday, in addition to pre-purchase agreements, Stripe announced it has allotted $250,000 in a research and development grant to Carboniferous and Rewind for a total of $500,000 and $100,000 in funding to Arbon and Vycarb, as part of a partnership with the climate tech accelerator, Activate, making the total sum to be $200,000.As of now, these techniques are capturing mere fractions of carbon emissions relative to that of the total amount released, with the International Energy Agency (IEA) reporting 36.8 billion metric tons of CO2 produced just to generate energy in 2022. However, the aim behind Frontier is that these techniques will gradually be developed over time. In order for humanity to achieve its climate goals, the UN Intergovernmental Panel on Climate Change suggests that the carbon removal industry should expand drastically. The IPCC comments that carbon dioxide removal cannot replace the necessity for immediate and deep reductions in emissions, however it is execs in all projected models which will limit global warming to 2 degrees Celsius or lower by 2100.Klitzke informed CNBC that since Stripe Climate kickstarted carbon removal purchases in 2020 and Frontier followed after it, there has been an upsurge in both quantity and quality of applications.
Klitzke informed CNBC that he deemed it a very positive indication that the field was advancing and maturing. Additionally, Frontier is noticing novel techniques of carbon extraction arriving from different parts of the globe in the applicants, and that is a hopeful sign, Klitzke mentioned. Regarding the purpose of carbon extraction for Frontier, it is not separate from its main objective on climate, which is to significantly cut down on emissions and phase out fossil fuels, Klitzke told CNBC. He noted that carbon extraction is intended to tackle prior emissions and should not be used as an excuse or discount for the fossil fuel industry.
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