Finding the right solutions 

Levers such as government regulation and investor behaviour are gradually forcing heavy emitting industries to decarbonise their processes, but this alone will not be enough to halt and reverse climate change. Currently, however, there are few incentives to finance CDR and undo more than two hundred years of CO2 emissions, resulting in a funding gap for companies developing these solutions. To solve this, Shopify’s Sustainability Fund aims to create demand, by purchasing CDR credits at any price, to drive investment towards atmospheric carbon removals.

The fund is developing a portfolio composed of a range of technologies that extract CO2 from the atmosphere. This can be accomplished by both engineered (“technological”) and nature-based solutions, including direct air capture (DAC), carbon mineralization, sustainable bioenergy with carbon capture and storage (BECCS), ocean-based methods, enhanced weathering, and forest and soil management. This diversified approach is based on an understanding that there is currently no single “silver bullet” solution that will be able to deliver carbon removals at the scale required to keep global temperatures below 1.5°C, nor can anyone predict the exact combination of technologies that will be required to reach this goal.

Critical factors when evaluating the usefulness of individual carbon removal technologies are permanence and additionality. Permanence is measured by the amount of time a solution can sequester carbon away from the atmosphere with reasonable assurance of it not being re-emitted, while additionality refers to whether a removal would have occurred in the absence of a market for CDR credits. While Shopify chose to set a minimum threshold of one hundred years of demonstrated storage capacity for the projects it finances, it opted for a more balanced approach to the additionality criterion. This is because purchasing avoided and reduced emissions offsets – in other words, the less additional options – would in some cases enable that technology to develop into true carbon removal.