Innovative Financing to Boost Carbon Removal Tech


Nature’s most obvious form of carbon capture – forests – are imperfect in terms of their ability to address the need. They have a limited capacity and take many years to grow. They also carry the inherent risk that fire will release the trapped carbon, destroying the carbon offset potential those trees represented.  While we must protect forests everywhere, for environmental and many other reasons, technology can provide ways to greatly increase the forms and scale of carbon removal. 

In April 2022, the Frontier fund, a public-benefit corporation owned by Stripe Inc., received funding commitments totaling a whopping $925 billion from the likes of Alphabet Inc., Shopify Inc., Meta Platforms Inc., and McKinsey & Co. Inc. to help emerging carbon-removal companies to scale up and reduce the cost of pulling CO₂ out of the air, to help fight climate change. 

The Frontier fund will provide capital for technology-based solutions to accelerate R&D efforts, to determine their actual potential. The Fund will consider criteria such as how long the carbon can be stored, how much it will cost (the goal is less than $100 per ton at scale), how much land it will require, total projected capacity, and the impact on the local community. 

While reducing greenhouse gas emissions in the first place is ultimately far more important than efforts to capture those emissions after they have been pumped into the air, the Frontier fund’s efforts would benefit companies looking to buy high-quality offsets to help reach their net-zero commitments. The idea is to push the feasibility of quality carbon offsets forward at a much faster pace than what has been accomplished thus far. As the startups that receive funding mature, the hope is that commitments to purchase the capacity they create will enable them to raise billions of dollars for building large-scale plants through the capital markets.

At OWL ESG, we believe companies and investors should embrace an “all of the above” approach to achieving CO2 reduction targets, and that technology will play an important role in this pursuit. The Frontier fund’s backers will benefit investors, stakeholders, and the planet in helping to reach net-zero goals, and deserve recognition for their dedication to making the world a better, more livable place. Our goal is to help investors make informed decisions in support of these and other ESG-related efforts.