JPMorgan Chase & Co just made one of the biggest bets on carbon removal technologies, to the tune of $200 million. According to the bank, the spending will be allocated to long-term agreements to remove and store 800,000 metric tons of CO2 from the atmosphere. JPMorgan (NYSE:JPM) announced its first $75 million commitment in April to Frontier, a carbon removal fund launched by Stripe. Frontier is backed by the tech giants including Alphabet (NASDAQ:GOOG), Meta (NASDAQ:META) and Shopify (NYSE:SHOP), who have pledged $1 billion with hope of accelerating the development of carbon removal technologies. Carbon capture initiatives have been gaining momentum, with several funds in addition to Frontier being launched to help advance carbon removal technologies. Another essential component for reaching net-zero goals is carbon avoidance through direct carbon reduction measures, such as the household device carbon projects investments by Base Carbon Inc. (NEO:BCBN) (OTCQX:BCBNF).
Unlike carbon removal initiatives like Frontier which, when operational, will remove existing CO2, Base Carbon provides funding into projects and climate action projects that immediately avoid carbon emissions from entering the atmosphere. The thinking is that one ton of carbon avoided today is one less ton that needs to be removed later. This strategy delivers immediate carbon removal, benefits to the project communities and a return on capital invested.
On June 6th, Base Carbon Inc. (NEO:BCBN) (OTCQX:BCBNF) announced that it has received the first revenues from the sale of carbon credits generated by its Vietnam Household Devices Project under the Citigroup Global Markets Limited offtake agreement.
Base Carbon facilitated a carbon credit offtake agreement between Citigroup and the project’s developer, Sustainability Investment Promotion and Development Joint Stock Company (SIPCO), for the initial 7.4 million carbon credits issued from the project.
The company has now received full payment for the initial 1,020,903 cookstove-generated carbon credits sent to Citigroup.
“This is a transformational milestone for both our business and the Company’s stakeholders. In just under 12-months from project execution and first capital deployment, we are now monetizing carbon credits generated from our Vietnam project,” said Michael Costa, Chief Executive Officer of Base Carbon. “The anticipated project cash flows will become more visible through continuous financial disclosure and we look forward to providing more details in the normal course of our operations. Going forward, we expect to begin redeploying our capital into a curated project pipeline, both expanding and diversifying our business lines and portfolio.”
The implementation of efficient household devices are crucial to reducing carbon emissions and provide social and health co-benefits to millions of families and communities. Roughly one-third of the world’s population relies on cooking fuels such as wood, charcoal, and kerosene. According to the Clean Cooking Alliance. These cooking fuels are a significant contributor to global carbon emissions and cause the deaths of approximately four million people annually due to respiratory diseases.
The success of the Vietnam Household Devices project exemplifies Base Carbon‘s role in bridging the gap between project developers in need of finance and consumers looking for high-quality carbon credits. The project is a collaborative effort to reduce carbon emissions, enhance living standards in project areas, and generate a return on investment.
Aside from the 850,000 cookstoves provided in Vietnam, the project also includes the distribution of 364,000 water purifiers, for which credits are expected to be awarded in the near future. Base Carbon views project co-benefits as essential drivers of project quality and risk mitigators for stakeholders, and they are quantified based on predicted improvements in living standards.
Investments in Carbon Removal Technologies
While Base Carbon executes climate action projects that completely and effectively prevent carbon emissions from entering the atmosphere, other companies are investing in future initiatives to remove existing emissions.
JPMorgan (NYSE:JPM) has committed to investing more than $200 million in carbon removal credits and is also assisting carbon capture enterprises in getting off the ground. JP Morgan Securities LLC served as the sole placement agent for Climeworks, a developer of direct air capture (DAC) technology, when it secured $650 million in an equity round last year. JP Morgan and a number of other companies revealed last month that they had joined Frontier, an advanced market commitment to expedite carbon removal. Autodesk, H&M Group, JP Morgan Chase, and Workday will join Frontier and pledge to purchase a total of $100 million in permanent, high-quality carbon removal over the next eight years, bringing Frontier’s total advance market commitment to more than $1 billion.
Stripe, which already previously committed to spending $1 million per year to remove CO2 from the atmosphere, launched Frontier, a wholly owned public benefit corporation, and pledged $925 million in funding until 2030 to buy offsets from carbon removal startups with partners Alphabet (NASDAQ:GOOG), Meta (NASDAQ:META), Shopify (NYSE:SHOP), and McKinsey.
Over the next nine years, Frontier will purchase permanent carbon removal from companies developing such systems. The project would also make it less expensive for businesses interested in purchasing captured carbon to offset part of the planet-warming pollution they emit.
Meta said this initiative reaffirms their commitment to achieving net zero emissions across their value chain by 2030. The company believes that by working to identify and scale technologies with the highest long-term carbon removal potential, they can assist speed the solutions required to fulfill global climate targets. Collaboration with internationally renowned organizations — charities, industry, and civil society — is critical to Meta’s sustainability approach and to making a difference.
Elon Musk, Alphabet, and several groups of private equity investors have pledged $2 billion to startups that provide innovative methods for removing carbon in April 2022. Vacuuming CO2 is one solution, as is establishing huge seaweed forests at the ocean’s depths.
Shopify has a Sustainability Fund supporting the development of carbon-removal technologies. To date, Shopify has collaborated with over 20 creative startups, including Heirloom Carbon, which aims to remove 1 billion tons of carbon dioxide by 2035 using a carbon mineralisation method that allows minerals to absorb CO2 from the ambient air in days rather than years.
While these companies look to carbon removal projects of the future, Base Carbon is focused on becoming the preferred carbon project partner by providing capital and development resources to carbon projects around the world and using emerging carbon industry technologies to improve efficiencies, commercial credibility, and trading transparency.
Featured Image @ FreePik
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