Shopify strikes deal to remove 10,000 tonnes of CO2
Texas plant will remove 10,000 tonnes using tech licensed from B.C. company
Canadian e-commerce company Shopify Inc. announced Tuesday it will pay to remove 10,000 tonnes of carbon dioxide from the atmosphere, marking one of the first corporations to use large-scale carbon removal technology as part of its effort to limit climate change.
Under the deal, Shopify will pay an undisclosed amount to 1pointfive, a U.S.-based company that is building a plant in Texas capable of removing 500,000 tonnes of carbon dioxide per year — using technology licensed from Squamish, B.C.-based Carbon Engineering Ltd. — and is expected to open by 2024.
It marks the second time Shopify has earmarked money to take carbon dioxide out of the atmosphere, having announced a deal last September with Switzerland-based Climeworks to remove 5,000 tonnes of CO2 from the atmosphere.
Shopify did not disclose the cost, or the timeline for when the 15,000 tonnes will be removed, though it did say both efforts were paid for through its annual $5-million sustainability fund.
Its investments mark the most concrete signs to date what a commercial marketplace to support the technology used to remove CO2 could look like, as more corporations step up their efforts to address climate change.
“We wanted to make sure we were sending a very strong market signal about the importance of supporting innovative technologies like this,” Stacy Kauk, director of Shopify's Sustainability Fund, based in Ottawa, told the Financial Post.
Kauk said the company is hoping “to kickstart the market,” so that other companies follow suit and invest in carbon removal, and eventually economies of scale reduce the costs.
Shopify, with a US$137.6-billion market cap, stands as Canada's largest company and provides the back-end e-commerce technology that powers many small businesses' websites.
In 2019, it declared itself carbon neutral, and said it had purchased carbon offsets for all its emissions since 2014. Kauk said the company, which had been headquartered in Ottawa but has since moved to a remote workplace, also relies on renewable power and energy efficient buildings.
The investments in carbon removal represent a minuscule fraction of its US$2.93 billion in revenue, and 15,000 tonnes of CO2 represent an even smaller portion of the estimated 36 billion tonnes of CO2 emitted globally each year.
Still, Steve Oldham, chief executive of Carbon Engineering, said Shopify marks his company's first commercial customer.
“The great thing about Shopify is they want to promote that this solution is feasible and makes sense, and secondly they want to get as many fellow customers and companies to the table,” Oldham said.
For several years, his company has been operating a test plant in British Columbia that removes a tonne of CO2 from the atmosphere per day. The system, known as direct air capture, uses giant fans to pull air molecules into contact with a chemical solution that traps CO2 molecules in liquid, so they can be stored.
Last August, 1pointfive, which licenses its tech from Carbon Engineering and is backed by the venture capital arm of U.S.-based Occidental Petroleum Corp., called Oxy Low Carbon Ventures, and California-based Rusheen Capital, announced new details of its plans to construct a large scale carbon removal facility on 100 acres in the Permian shale basin in Texas.
The company said it would be capable of removing as much as one million metric tonnes of CO2 per year, although Oldham estimated it would initially be able to remove 500,000 tonnes. Kauk said only that her company has put a down payment that reserved 10,000 tonnes for Shopify with no deadline.
“We think there's a lot of technology out there that needs support,” she said, explaining that's why the company chose to invest in two companies developing direct air capture technology.
Julio Friedmann, a senior research scholar at the Center on Global Energy Policy at Columbia University in New York, said governments need to develop policies to support carbon removal, so that the technology can be more widely deployed, which will help lower costs.
“I'm confident that the costs could be well below $200 per tonne by 2030,” he wrote in an email.
Oldham would not disclose Carbon Engineering 's cost to remove CO2, but said it was “significantly” lower than US$600 per tonne — which he said was the cost of a competitor's technology.
But he said there's no magic number that will make carbon removal technology more viable, as some carbon emissions are harder and more expensive to limit than others.
“As companies look at how are they going to address their carbon footprints,” he said, “there are a lot of emissions that are just hard to eliminate, and here is a method that lets you eliminate any emissions.”
Even if all carbon emissions ceased tomorrow, he estimated there would be 800 gigatons — a gigaton is equivalent to one billion tonnes — of legacy CO2 in the atmosphere that needs to be removed.
“The great thing about our tech is it's completely scalable,” said Oldham.
“We are unlimited. Air is everywhere, and we can take as much CO2 out of the air as the market and the climate problem requires.”
Air is everywhere, and we can take as much CO2 out of the air as the market and the climate problem requires.