Today, Stripe has unveiled an innovative new service that allows businesses to pre-order “offtake” agreements for carbon elimination jobs. These Environment Orders will enable businesses to produce certificates to offset their emissions. These agreements will fund carbon elimination tasks that have been vetted by Frontier, the $1 billion purchasers group that Stripe co-founded with Alphabet, Shopify and Meta.
According to environment strategists, innovations that can draw down levels of atmospheric carbon, such as those offered through this new Stripe service, will be essential for achieving net zero in the next twenty years. Boston Consulting Group estimates that annual demand for carbon removal will reach 40 million to 200 million metric tons of CO2 by 2030. This far exceeds the current capacity of existing projects, and yet falls short of what is needed to stop climate change, as stated by the Intergovernmental Panel on Climate Change.
The concept behind this new Stripe service is to encourage more businesses with emissions reduction goals to fund carbon elimination services in the early stages. According to Lauren Polansky, Stripe’s environment product manager, “Early purchasers are so crucial to help carbon elimination tech scale and become more affordable.”
While few companies have entered this market, purchases are beginning to pick up. For example, American Airlines recently became the first customer for the carbon removal start-up Graphyte. Jill Blickstein, the airline’s chief sustainability officer, stated, “Hard-to-abate industries like aviation will need premium, permanent, affordable and scalable carbon credits, including removals, to achieve our emissions reduction goals.”
Many companies have been hesitant to invest in contracts for carbon removal projects due to concerns about high costs and uncertain price changes. Stripe’s new service aims to address these concerns by allowing customers to buy into the offtake portfolio supported by Frontier, or to negotiate contracts focused on individual providers with just a few clicks. Stripe is assuming the risk of potential price changes as projects come online, and the eliminations are being verified by third-party crediting bodies.
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