Shopify raises carbon-removal commitments to $32 million

It’s not just the US government that’s spending big to try and scale up carbon removal, but private companies too.

Last week, Shopify announced it would buy carbon-removal credits from nine more companies, bringing its total carbon-removal purchase commitments to $32 million.

Why it matters: Along with Stripe and Microsoft, Shopify is one of a handful of companies attempting to help the carbon-removal industry scale by purchasing removal credits before it’s economical to do so—paying what is called the “green premium.” The hope is that purchases like this will both push down the cost of carbon removal and also send “demand signals” that make it easier for these startups to raise money.

• Your regular reminder: To meet Paris Agreement targets, carbon-removal techniques must be capable of pulling 10 billion tonnes of CO2 from the atmosphere each year by 2050. Right now, we’re removing a fraction of a fraction of that amount.

In total…Shopify has purchase commitments with 22 carbon-removal firms, spread across a variety of techniques—from direct air capture to reforestation—and it is the largest buyer for eight of the newly announced companies.

• For its part, Microsoft has established a $1 billion fund to invest in carbon reduction and removal tech, and announced in January that it had  so far funded the removal of 1.3 million tonnes of CO2, from 26 companies.
• Stripe, meanwhile, has purchased $15 million worth of carbon removal from a total of 14 projects.

In addition to large purchasers like Shopify, Microsoft, and Stripe, at least one startup—London-based Supercritical—is working to aggregate demand from smaller companies to make carbon removal more accessible.

Looking ahead…Carbon-removal execs recently told us that they’re seeing more and more demand from the commercial sector.

“The commercial market, the voluntary market for carbon removal, is growing really, really significantly,” according to Max Scholten, head of commercialization at Heirloom—a direct air capture (DAC) startup that raised a $53 million Series A in mid-March.