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☁️ "Frontier Carbon Removal"

This Week in Startups

Photo by Markus Spiske / Unsplash

Table of Contents

Hosts: Jason Calacanis & Molly Wood
Guest: Nan Ransohoff | Head of Climate | Stripe
Category: ☁️ Carbon | Frontier

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Podcast’s Essential Bites:

[17:01] “Our focus at Stripe is really on filling the gap that exists today in solutions. […] There are essentially two things that we can do to get to global net zero by 2050. We can stop emitting or we can pull CO2 out of the atmosphere and ocean and store it somewhere permanently. […] There are some solutions like planting trees and soil carbon sequestration that are “mature” today. […] The problem is we will run out of arable land long before we can hit this crazy volume of removal that we need to do. So our focus was not on the mature stuff that exists today, but how we can fill the gap.”

[17:54] “We're looking for solutions that will store carbon permanently, so more than 1,000 years […]. We want solutions that don't compete with other sources of arable land. Three, we want solutions that have the potential to be sub $100 a tonne in the coming decades. And four, solutions that have the potential to be more than half a gigaton a year in the coming decades as well.”

[18:59] “As of the end of last year, less than 10,000 tonnes […] had been actually delivered. […] We need roughly 6 billion tonnes every single year by 2050. […] A huge supply shortage was exactly one of the impetus for Frontier. And part of the reason that there is a supply shortage right now is because it hasn't really been a very attractive business proposition to start a carbon removal company. Why would you start a company if you aren't sure anybody is going to buy the product that you're selling? Why would you invest in a company if you're not sure that company is going to have a revenue stream? This is really paralyzed the field up until very recently.”

[23:36] “I think that voluntary buyers, like private companies and individuals, can help get this field to first base and it can help buy us time to get policy in place. But this is going to be 100 billion to a trillion dollar market a year in the coming decades, every single year. And it's very difficult to imagine that happening without government as a purchaser and also governments creating a compliance market and forcing companies and other players to do something substantive with remaining emissions.”

[24:36] “[Frontier] is an advanced market commitment fund. […] The goal of an advanced market commitment is really to guarantee a viable market for a product that hasn't yet been developed. And it's a concept that's borrowed from vaccine development. […] We want to take that same concept of saying, if you build something, there's going to be a market and apply it to carbon removal, which faces a number of the same market failure problems.”

[27:34] “There are two tracks for different stages of companies. For really early companies that are just getting started and just removing their very first tonnes, we have track one, which is pre-purchases. This is very similar to what Stripe has been doing for the last year and a half, where we give companies a say $500,000 purchase for a certain number of tonnes at a certain price. And we give that money to them upfront, so if they go out of business, or if they fail, we lose the money and we have no recourse. […] The second track is offtake agreements. This is a concept that is borrowed from the energy sector as well, […] sometimes known as PPAs or power purchase agreements.”

[39:51] “Stripe is very much in the business of economic enablement. And when you think long term about what are the threats to that and we do think long term because we are an infrastructure company, climate change is one of the biggest threats. […] In the short term it might feel a little orthogonal to the business. But I think in the long run, it is aligned.”

Rating: ⚡⚡⚡⚡

🎙️ Full Episode: Apple | Spotify | Google
🕰️ 47 min | 🗓️ 05/08/2022
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