Nomadic Supply Company has contributed over $70,0000 to the Stripe Climate initiative as of March 2024, which has enabled significant progress against Climate Change.
When we first made it possible for businesses to contribute to carbon removal through Stripe Climate in 2020, it was an experiment. The response has been remarkable. Today, tens of thousands of businesses from 40 countries have joined, making Stripe Climate the largest carbon removal coalition in the world. Stripe Climate has so far purchased $15M of removal from 14 of the mostpromising companiesin this space.
Your purchases have also changed how the world is thinking about carbon removal. Governments are starting to fund research and procurement, and leading companies are now asking how they can purchase carbon removal to meet their net zero goals.
To enable carbon removal purchasing at an even bigger scale, we’re standing up a new organization called Frontier. Frontier will facilitate nearly $1B of guaranteed, pre-committed carbon removal purchases over the next eight years. Its founding donors are Stripe, Google, Shopify, Meta, and McKinsey. As part of our commitment to Frontier, we at Stripe are substantially increasing our own carbon removal commitment. The cost is meaningful for us, but we think that the scale of the problem and the opportunity for impact make it more than worthwhile. We hope more companies will join us in the months and years ahead.
Frontier, an advance market commitment for carbon removal
We’re excited that Frontier will be structured as an “advance market commitment” (AMC): an agreement to purchase a product under development if and when it becomes available. The model was successfully piloted a decade ago to accelerate the development of pneumococcal vaccines, saving around 700,000 lives.We think it can workfor carbon removal too. By providing guaranteed demand, AMCs aim to send a strong signal to researchers, entrepreneurs, and investors working on new products that there is a large, de-risked market for the technologies they are building.
Pooling nearly $1B of carbon removal demand will mean we can enter into longer-term agreements with carbon removal companies. These will take the form of “offtake agreements”: binding legal contracts to purchase future carbon removal at an agreed price if and when the supplier’s technology is ready. These agreements then help the carbon removal companies to raise the debt and equity they need to build the technology. Other parts of the energy industry (like the solar and wind sectors) have historically used these kinds of agreements to attract the capital they need to grow their operations. We hope to have the same impact on carbon removal. Importantly, this should help ensure that our efforts create net new carbon removal supply, rather than compete over what exists today.
As a Stripe Climate user, you don’t need to do anything. We’ll continue to direct 100% of your contribution to carbon removal, now via Frontier (neither Stripe nor Frontier will charge any fees or generate any revenue from your contributions). The change is that your contributions will be multiplied by large additional commitments from our new partners.
Aggregating demand for maximum impact
If carbon removal is to get to the scale needed, we need to catalyze a much bigger ecosystem. Frontier is a major milestone on this journey.
As always, we’ll publish the details of what Frontier is spending, as well as the agreements we’re signing. We’ll keep you updated on how it’s going, and you’ll be able to track the progress atfrontierclimate.com.
Stripe Climate was one of the first commercial buyers of carbon removal technology in the world. With Frontier, we’re creating the first carbon removal AMC. We’re grateful to be partnering with you to help build a carbon removal sector that can scale to the planet’s needs.