Skip to main content
No. of Recommendations: 9
Interesting read in the Atlantic: https://www.theatlantic.com/science/archive/2020/11/stripe-c...

Stripe is one of those technology companies that control the internet’s plumbing. It makes payments-processing software that hustles money from your debit or credit card to someone else’s bank account. If you’ve ever purchased groceries on Instacart or supported a project on Kickstarter, you’ve used Stripe.
Stripe is worth $36 billion by one metric, making it among the most valuable U.S. start-ups that have yet to go public. Only a handful of firms, such as SpaceX and Cargill, are more valuable.


In the past year, Stripe has become one of the world’s largest purchasers of carbon-removal credits, devoting $1 million to extracting carbon from the sky. Last month, it began allowing its customers—the businesses that use its payment software—to buy carbon removal as well.

Today, Stripe buys removal from four companies: Climeworks, which captures carbon directly from the air and injects it into underground basalt; CarbonCure, which injects carbon into concrete; Project Vesta, which uses a common mineral to convert carbon in the ocean into limestone on the seafloor; and Charm Industrial, which produces an oil from biomass and then injects it deep into the earth.

Peter Reinhardt, the chief executive of Charm Industrial, one of Stripe’s carbon-removal clients, told me. Right now it costs $600 to sequester a ton of carbon using Charm’s technique, but it won’t become a competitive product in carbon markets until that cost is down to about $200 a ton. “By the time we deliver on our contracts with Stripe and others, we’ll be down the cost curve by 10 percent,” Reinhardt said.

“When investors go to decide whether they’re going to give any of these companies money, they’re going to ask, Is there a customer?” Ransohoff said. “Right now, in carbon removal, the answer is mostly no.” So Stripe’s job is to be the buyer of first resort: the “demand-side signal” that a market exists for carbon removal.

Stripe climate's site (want you to login): https://stripe.com/climate

https://stripe.com/newsroom/news/climate-launch
Stripe’s enterprise customer momentum has continued of late, with recent partnerships including Atlassian, Instagram, Lightspeed, Maersk, Twilio, Zoom Video Communications, and Salesforce. As the only payments platform serving Fortune 500 companies alongside brand new startups, Stripe makes it easy for any internet company to start and scale their business—and now to use Stripe’s sophisticated payment tools to take meaningful climate action as well.
Print the post Back To Top
No. of Recommendations: 3
I think what I see in that article is:

1: There are some hardware processes and companies who have methods of removing carbon from the atmosphere and storing it where it doesn't easily get back into the atmosphere. Several companies with several hardware processes are named.

2: Demand to those companies is defined as, "We will pay you to pull more out". That demand is not a business decision. It is a charity (albeit a good one) decision.

3: Stripe is a fintech transactions processor company. As a charitable move, they are donating some money to create more demand for carbon removal.

4: They are now offering the opportunity to their customers to also donate.

Your last paragraph mentions several big name companies who are signing on to donate too.

Question: When they mention the words "carbon market", are they discussing a marketplace of carbon credits that are bought and sold, as in "cap and trade"? Or is this strictly a kindness to the earth charitable endeavor?

Thanks
Print the post Back To Top
No. of Recommendations: 3
I'm not expert. But California does have a carbon pricing policy, and so my view is that this isn't charity at all, but anticipation of a potentially huge market need as regulations tighten. And good branding as well.

California cap and trade program site: https://ww2.arb.ca.gov/our-work/programs/cap-and-trade-progr...

Nice chart of the carbon allowance pricing:
https://ww2.arb.ca.gov/sites/default/files/2020-09/carbonall...

The current November auction sold out the allowances, the previous 2 (May and Aug) had surplus driven by the Covid19 economic slowdown, and price dropped from Feb high of 17.87 to 16.68, but has recovered to $17.35.

Each allowance enables the purchaser to emit a ton of CO2 equivalent. The amount of available credits ratchets down with each auction, effectively forcing businesses to find ways to reduce their carbon footprint or buy extra credits on the open market.

You earn a credit if you remove metric ton of CO2 equivalent.

In the Stripe article, there target cost of capture was $200/ton to start becoming viable ... so I'm looking for a way bridge that gap with $17. This article is closest I found addressing that gap. https://www.bcg.com/publications/2019/business-case-carbon-c...

Here is Wikipedia on the Western Climate Initiative. https://en.wikipedia.org/wiki/Western_Climate_Initiative

Broader California dashboard on climate change policy:
https://www.law.berkeley.edu/research/clee/research/climate/....

regards,
Bill

PS. I think your question, Ibuildthings, should be simple to answer. Is it just charity? I've spent several hours on this, looking for a really nice explanatory article, and haven't found the right one. There was a flurry of activity back around 2010, but I couldn't find something current.

2 minute introductory video: https://calmatters.org/environment/2015/07/cap-and-trade-in-...

I'll keep looking.
Print the post Back To Top
No. of Recommendations: 0
Stripe is a private company. Any indication that it will IPO in the near future?

Lee
Print the post Back To Top
No. of Recommendations: 0
Print the post Back To Top
No. of Recommendations: 0
Thanks Bill, for the extra information. I'm not challenging the goodness of carbon removal. My questions were more to

1: confirm my understanding of what they are funding, and
2: to learn if that funding is somehow an ownable investment in carbon credits, versus payments to carbon removal companies to remove more carbon.

The Atlantic story leaves me with the notion that it is a voluntary donation, not an investment in tradable credits.
Print the post Back To Top
No. of Recommendations: 3
ibuildthings,

This is from Stripe's climate FAQs:

Does Stripe Climate offer traditional carbon offsets?

No. Traditional carbon offsets, while often inexpensive, are unlikely to scale to the size of the climate problem. Instead, we’ve chosen to focus on permanent carbon removal technologies.

Is my contribution tax deductible?

Your contribution isn’t currently processed through a nonprofit organization, so it doesn’t qualify as a charitable contribution. It may be deductible as a business expense, similar to a typical Stripe Fee.


From their blog: https://stripe.com/blog/first-negative-emissions-purchases
Call to action

Our goal is not only to remove carbon from the atmosphere, but to become an early member of an ecosystem of funders and founders who will invent ways to solve the world’s largest collective problem. We continue to search for great projects, purchasers, and experts. Please reach out to us to work together on this effort or to give us any feedback. We can be reached at climate@stripe.com. (And if you’re an engineer or designer who cares about climate impact, consider joining our team).


Just one example of a project application. This one from CarbonCure (putting CO2 in concrete). If you are curious and read through it, you'll see that CarbonCure set aside 2500 tons of offsets for Stripe. (Because the math is easy, I took the $1M investment, divided by 4 (# of projects), divided by 2500 offsets available) and got, ROM, 100$/offset. If that's what Stripe is buying.
In section 7, subsection 14 & 15, that $100 figure is confirmed.
https://github.com/stripe/negative-emissions-source-material...

I don't think this is going to be just charity. IMHO they're going for Other bets, or SpaceX, Blue Origin ... a new industry is being created. I imagine a new carbon marketplace (like CBOT) for that industry would be closer to Stripe's wheelhouse that the R&D of actual carbon renewal. Stripe selected 4 out of 24 projects applications. From US/Europe/Asia. High tech and low tech (planting trees). They will be the early adopter (establishing real financial relationships), and they can aggregate/curate funds from their customers.

rgds,
Bill
PS Even farther OT: https://www.nature.com/articles/d41586-020-00177-3
Print the post Back To Top