“It’s a chicken-or-egg problem,” said Nan Ransohoff, head of climate at Stripe, an online payments company based in San Francisco. “The best way to bring down the cost is to start deploying these technologies at scale. But until there are actual customers, no one’s going to build them.”
To help break the impasse, Stripe announced in 2019 that it would begin spending at least $1 million annually on carbon removal, without worrying about the price per ton initially. The goal was to evaluate companies working on promising technologies and offer them a reliable stream of income.
After convening outside experts to review applications, Stripe announced its first round of payments last May. That included an agreement with Climeworks, a Swiss start-up that has already built several small direct air capture plants in Europe. Stripe also paid $250,000 to Project Vesta, a nonprofit planning to sprinkle volcanic minerals on beaches, testing to see how much carbon dioxide they absorb as the waves break them down, through a process known as weatherization.
The companies receiving Stripe’s funding say the money has been crucial.
“It’s existential for us,” said Peter Reinhardt, co-founder of Charm Industrial, a start-up that Stripe is paying to remove 416 tons of carbon dioxide at $600 per ton. His company will take crop waste and convert it into an oil that can be injected underground, rather than letting the waste decay and release carbon back into the atmosphere.
Other companies are similarly investing. The German automaker Audi is paying Climeworks to capture and remove 1,000 tons of carbon dioxide from a new direct air capture facility in Iceland, scheduled to come online this year. Climeworks has also signed an agreement with Swiss Re, the insurance giant, which this month created a dedicated funding stream for carbon removal. Shopify, a Canadian e-commerce company, has already committed $1.6 million to various carbon-removal start-ups.
Christoph Gebald, Climeworks’ co-director, said his company now had more than 50 corporate clients paying to capture and store carbon dioxide. His goal is to build enough facilities to remove 30 million to 50 million tons a year from the atmosphere by 2030.