| | | | |  | | By Corbin Hiar | | | | | | | 
Nan Ransohoff, head of climate at Stripe Inc. | Photo courtesy of Stripe Inc. | In 2019, Stripe Inc. announced plans to buy $1 million of emissions offsets from firms that permanently remove carbon dioxide from the atmosphere, winning praise and headlines . That commitment is now nearly 1,000 times larger. Last week, Stripe, Alphabet Inc. (which owns Google LLC), Meta Platforms Inc. (formerly Facebook Inc.) and Shopify Inc. launched an initiative, known as Frontier, that aims to invest $925 million in carbon removal efforts between now and 2030. The new commitment is intended to "send an increasingly loud demand signal that there are going to be customers for promising permanent carbon removal companies," said Nan Ransohoff, Stripe's head of climate, who will lead the venture. Ransohoff spoke with Corbin Hiar of POLITICO's E&E News about the origins and mechanics of the collaboration, the gaps she sees in the carbon removal space, and how she hopes nearly $1 billion of funding will help increase the supply of removal projects and drive down the cost of permanently removing CO2 from the air — a process that can currently cost up to $600 per ton. This interview originally appeared in Climatewire, a publication of POLITICO's E&E News. It has been edited for length and clarity. How did this initiative come about? Last fall, [Stripe's climate team members] were all in a room, and the genesis came from the observation that we're still really far behind. We brainstormed, and the idea that stuck was this loud, intense demand signal to researchers, academics, entrepreneurs and investors that there is a market for the technologies that they are building. And so we got it in our head that a billion-dollar demand signal would be loud enough to pull the field forward. How did Stripe end up working with these particular companies and not others, like Microsoft Corp., which is also a major corporate supporter of carbon removal? The partners for this initial launch tend to be companies that have leaders that care a lot about what the future of the world looks like. They have budgets and businesses to support that, and they tend to really understand learning curves and technology curves. Because if you're just trying to check the box on doing [emissions] offsets or meeting some [reduction] target, this is not the cheapest way to do it. So it was important to find companies that were spiritually aligned and motivated by the future that we were trying to move towards.
| 
| This is in some ways a philanthropic endeavor. These founding companies are coming together to buy early-stage carbon removal at an expensive price now, so that it's cheaper for everybody later. So why not make Frontier a nonprofit, which would allow its supporters to take a tax write-off? It's a public benefit LLC. This is an essentially not-for-profit structure that you can run within a company. We are certainly open to the idea of spinning this out in the future. But for now, we really want to make sure that this effort succeeds. And our thinking is that we can get legal and recruiting resources from Stripe, and we can find great employees because we can give them equity in Stripe.
| | | | INTRODUCING DIGITAL FUTURE DAILY - OUR TECHNOLOGY NEWSLETTER, RE-IMAGINED: Technology is always evolving, and our new tech-obsessed newsletter is too! Digital Future Daily unlocks the most important stories determining the future of technology, from Washington to Silicon Valley and innovation power centers around the world. Readers get an in-depth look at how the next wave of tech will reshape civic and political life, including activism, fundraising, lobbying and legislating. Go inside the minds of the biggest tech players, policymakers and regulators to learn how their decisions affect our lives. Don't miss out, subscribe today. | | | | | How will partners like the parent companies of Google and Facebook benefit from this collaboration? Frontier aims to expand the supply of carbon removal, rather than just myopically compete over what exists today. We can wish that there were enough offsets for every company to meet their net-zero [emissions] commitments, but there aren't. So we have to create more. And the reality is early technologies are expensive when they start, and it takes scale and time for the cost to come down. So we need to meet this industry where it is, to help pull those technologies down the cost curve. Will you be creating your own removals vetting system or work with existing carbon offset ratings firms like Gold Standard or Sylvera? As we know, the traditional offset market has encountered a number of challenges. A lot of money that goes for traditional offsets is basically being lit on fire. It's not actually doing anything incremental. Measurement and verification is this big gap for carbon removal right now. Part of the reason that's the case is that these technologies are very diverse in nature. The way that you verify that we've sunk a ton's worth of carbon in kelp at the bottom of the ocean is very different from how you verify whether we've dumped a ton's worth of carbon bio-oil underground. When [Charm Industrial] delivered its first ton for Stripe Climate, we were on the phone FaceTiming with the injection well. That's literally what happened. So there's a long way to go to figure out what [measurement and verification] looks like for the field broadly. We're not exactly sure how that is going to happen yet, but are very much trying to figure out what that should look like over the next couple years.
| | A message from National Grid: There Is A Better Way. National Grid is announcing our path to a fossil-free energy future. By using renewable natural gas, and green hydrogen produced from water using wind energy, we can achieve a fossil-free energy future by 2050 or earlier. | | | How much of the $925 million commitment is each company committing to spend on this initiative? You can ask each company, and it's at their discretion whether they want to share. Well, how about Stripe? We're a very large contributor. But I don't think we're sharing at this point. How much of the combined pledges will be spent in the first few years of the initiative? The way this works is every funding company has given its demand schedule for the maximum amount that they'll commit to each year. There are two tracks of how we spend. One is pre-purchases, and this is where we're giving the company money before they've delivered the tons [of carbon removals]. This is what Stripe Climate has been doing to date, and these are about $500,000 a company. The second track is offtake agreements. These are larger contracts where we don't actually pay the company until they deliver the tons. Because this field is so early, most of the initial money is going towards pre-purchasing. So the dollar amounts in the early years are going to be smaller and then it will ramp over time. Is facilitating carbon removal purchases something that could eventually turn into a profitable line of business for Stripe? Everyone asks this: Like, what's the catch? Um, you are employed by a for-profit business. So to what extent could Frontier bolster Stripe's bottom line? It is a very reasonable question [laughs]. I just don't have a satisfying answer. But the truth is that we are in the business of economic growth. And if you take the long view, which Stripe does, climate change is one of the biggest threats to economic growth. So we see an opportunity to leverage our place in this business ecosystem to increase the chances that we effectively solve the climate problem. | | | | A message from National Grid:   | | | | | | GAME ON – Welcome to the Long Game, where we're delivering the latest on efforts to shape our future. Tuesday through Friday, we've got data-driven storytelling, compelling interviews with industry and political leaders, and more news to keep you in the loop on sustainability. Our team is sustainability editor Greg Mott, deputy editor Debra Kahn, reporters Lorraine Woellert and Catherine Boudreau and digital producer Jordan Wolman. Reach them at gmott@politico.com, dkahn@politico.com, lwoellert@politico.com, cboudreau@politico.com and jwolman@politico.com. Want more? Sign up for the Long Game. Four days a week and still totally free!
| | A message from National Grid: National Grid is announcing our path to a fossil-free energy future for our customers and communities. Our fossil-free plan will help achieve the Northeast's aggressive climate goals and set a new standard for energy companies.
We will use renewable natural gas, green hydrogen generated from wind and solar power, battery storage, and greater energy efficiency to make our National Grid system fossil-free by 2050 or earlier. Climate scientists say renewable natural gas is a win-win for the environment.
There Is A Better Way to keep energy affordable, reliable, and clean. That's why we are creating a hybrid pathway that preserves customer choice while delivering the clean, affordable energy future our customers want and deserve. See How. | | | | | | — An argument for including weapons manufacturers in ESG. — New York's biggest gas utility wants to shift the state's climate plans from electrification to gas from landfills, cow manure and wastewater treatment plants.
| | | | STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today. | | | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
Comments
Post a Comment