“It’s a chicken-or-egg problem,” said Nan Ransohoff, head of climate at Stripe, a San Francisco-based online payments company. “The best way to reduce costs is to use these technologies on a large scale. But until there are actually customers, nobody will build them. “
To break the impasse, Stripe announced in 2019 that it would spend at least $ 1 million annually on carbon removal without first having to worry about the price per tonne. The aim was to evaluate companies working on promising technologies and provide them with a reliable stream of income.
After calling in outside experts to review the applications, Stripe announced its first round of payments last May. This included an agreement with Climeworks, a Swiss start-up that has already built several small direct air separation systems in Europe. Stripe also paid $ 250,000 to Project Vesta, a nonprofit that plans to sprinkle volcanic minerals on the beaches to test how much carbon dioxide they absorb when the waves break them down. This is known as increased weathering.
The companies that received funding from Stripe say the money was critical.
“It’s existential for us,” said Peter Reinhardt, co-founder of Charm Industrial, a start-up that Stripe pays to remove 416 tons of carbon dioxide for $ 600 per ton. His company will be collecting crop waste and converting it into an oil that can be injected underground instead of breaking down the waste and releasing carbon back into the atmosphere.
Other companies invest similarly. German automaker Audi is paying Climeworks to capture and remove 1,000 tons of carbon dioxide from a new direct air separation system in Iceland, which is due to go into operation this year. Climeworks also signed an agreement with Swiss Re, the insurance giant, which created a dedicated funding stream for carbon removal this month. Shopify, a Canadian e-commerce company, has already allocated $ 1.6 million to various carbon removal startups.
Christoph Gebald, co-director of Climeworks, said his company now has more than 50 corporate customers who pay to capture and store carbon dioxide. His goal is to build enough plants by 2030 to remove 30 to 50 million tons from the atmosphere every year.