Big Tech is buying into the early carbon-removal market
Big Tech is buying into the early carbon-removal market
Microsoft has announced a $200-million contract with a company that’s using crushed limestone to absorb carbon out of the air. Part of the company’s billion-dollar plan to fund carbon-removal projects, it’s one of the largest-ever purchases of such services.
Developing technology to reduce existing carbon in the atmosphere — not just cut future emissions — is seen as key to averting the worst outcomes of climate change, but that technology has proven hard to scale. Recently, Big Tech and energy companies have jumped into the game. What does corporate America stand to gain if carbon removal pans out?
Showing that you care about reducing emissions is kind of a business imperative at this point, said Andy Hoffman, a professor of sustainable enterprise at the University of Michigan.
“There are investors who care about this — there are numerous pressures, and you can only drag your feet so long,” Hoffman said.
In addition to Microsoft’s investment, electronic payment platform Stripe along with Alphabet, Shopify, Meta and other companies have chipped in to a buyers consortium called Frontier. The pot now totals $1 billion.
“Our main goal here is, is really to be an early catalytic first customer,” said Joanna Klitzke with Frontier.
Klitzke said that on Thursday the consortium made $7 million in advance carbon-removal purchases from 12 companies that are developing technology to suck CO2 out of the air or capture it via reactions with water or sunlight. “We don’t know yet which will be the solutions that will be able to scale up most effectively in 2030 or 2040 or 2050. We’re likely going to need a number of different approaches.”
For these big companies, $7 million is a small, safe way to get in on what could be a winning environmental strategy.
“It really signals to consumers or to their customers that this is a company that’s a leader, that’s ahead of the game, that it’s innovative,” said Daniel Korschun, a professor of marketing at Drexel University.
It could also help lock in lower early-buyer rates for carbon-removal credits that could eventually become valuable — both financially and environmentally.
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