Companies have long paid to grow trees or preserve forests in the expectation that nature can consume their greenhouse gas emissions, in order to boost their green credentials. Shopify, a Canadian e-commerce platform, aims to take a more hands-on approach by paying a Texas firm to pull CO2 from the atmosphere and store it underground.
Last month, Shopify announced a partnership with Carbon Engineering, which is about to begin construction on a massive "direct air capture" facility in West Texas. Huge fans will suck in air and pump out pure CO2 at their factory, which is expected to be the biggest of its kind. Shopify has decided to purchase 10,000 metric tons of CO2 that will be indefinitely stored in deep rock deposits.
The plan comes at a time when businesses are doubling down on their commitments to combat climate change. Tech companies, airlines, and oil and gas companies have also recently vowed to achieve "net-zero" emissions by 2050, a narrowly specified goal that entails reducing current emissions and reversing previous pollution. According to climate science, the planet must now do both in order to keep global warming under 1.5 degrees Celsius by the middle of the century.
Companies from across the spectrum of industries are investing in businesses designing cutting-edge solutions to extract and store emissions. Selling CO2-removal by the ton is a way for businesses to finance these massively costly projects while still enabling them to take credit for reducing their carbon footprints.
It is believed that this policy will catch on with companies like airlines and steel industries, which are among the hardest to decarbonize. Environmentalists cautioned, however, that these programs should not be used to replace attempts to reduce pollution from flying jets, moving products, powering homes, or operating factories.
Direct air capture offsets can have certain benefits over, say, planting trees. To begin with, there is less uncertainty about how much carbon is currently extracted from the atmosphere by large machines. And CO2 trapped deep underground is less likely to escape into the atmosphere than CO2 released by wildfires, plant disease, or human activities in a forest or wetland.
According to current market estimates, the cost of sucking CO2 from the atmosphere is about $600 per metric ton of CO2. Demand may rise as the price drops to about $100 to $150 per metric ton as more facilities are built.
To be sure, analysts say that using direct air capture to limit a company's carbon emissions also has its drawbacks.
Because of the high expense and technological difficulty of these programs, there's a chance that some of them won't be completed or run as expected. Companies will overestimate the actual effects if they invest now and deduct the captured carbon from their current footprints.
The nascent carbon-capture industry is also marked by a lack of objective, verifiable data. It is almost impossible for companies and the public to say with confidence that their efforts in reducing their carbon footprint are actually working without stronger disclosures.