Climate

Carbon removal has a funding gap. This climate nonprofit is attempting to fill it.

Terraset, a new nonprofit, is channeling private philanthropy into carbon dioxide removal.

A carbon dioxide removal plant in Iceland with steam rising from it.

“There’s this gulf between how much people want to act and the options available to them."

Photo: Arnaldur Halldorsson/Bloomberg via Getty Images

Tech companies have committed hundreds of millions of dollars to buy carbon dioxide removal services. Now, Terraset, a new nonprofit, is jumping in to help channel private philanthropy into the nascent field.

Alex Roetter, the founder of Terraset, which exited stealth mode on Tuesday, said the organization will “be an independent source of demand” for carbon removal services. Bringing down the cost of those services will be key to the world reaching net zero by midcentury, and philanthropy could be an untapped avenue to help make that happen.

Companies including Microsoft, Alphabet, and Salesforce have pledged hundreds of millions of dollars for carbon removal individually. Frontier, a group of companies led by Stripe, has put $925 million up for an advance market commitment for services as well. But that’s a fraction of the investment needed to bring down costs and ensure the technology reaches a meaningful scale.

Until now, individuals who want to pool their resources to pay for carbon removal and help the industry gain a toehold have had very few options outside purchasing services from direct air capture company Climeworks.

“There’s this gulf between how much people want to act and the options available to them,” Roetter, who’s currently a managing director and general partner at Moxxie Ventures and previously was president at Kittyhawk and head of engineering at Twitter, told Protocol. And when it comes to CDR, “there can’t be large supply without a really strong signal that there’s demand.”

Terraset is attempting to bridge that gulf by funneling private philanthropy to the most promising carbon removal startups that need capital to scale. The nonprofit, which has been operating in stealth mode since early this year, has secured annual donations in the “low six figures,” according to Roetter, from a handful of donors, including investor Tim Ferriss and Segment co-founder Calvin French-Owen. Initial donations have been used to fund two CDR startups: Charm and Heirloom.

Starting today, anyone can donate any amount to Terraset. The organization pools the funds, then vets and selects the CDR projects using a handful of requirements.

Among them are ensuring that projects remove carbon dioxide from the atmosphere that wouldn’t have otherwise been removed without a donation and store it for centuries or more. Projects must also be scientifically rigorous, either by publishing research or having scientists who vouch for it. Finally, technology Terraset gives money to must have the potential to scale to remove megatons of carbon and do so in a manner that minimizes or entirely avoids harm to local communities. Though Terraset does not have its own research team, Roetter said it follows the guidance of groups like Frontier and CarbonPlan to help evaluate CDR startups.

Shashank Samala, the CEO and co-founder of Heirloom, said he hears from people “all the time” who want to give directly to Heirloom but aren’t able to. At the moment, all of Heirloom’s customers for its direct air capture services are big corporate buyers like Microsoft, Stripe, and Shopify. Samala said the company would consider eventually letting anyone buy a carbon credit straight from Heirloom’s website similar to Climeworks. Right now, however, the startup doesn’t have the capacity to serve small buyers.

Because carbon removal technology is so nascent, the cost of financing is high, Samala said. Lenders also want to see that there are buyers who will purchase carbon removal services at a price that covers their cost. Pulling a ton of carbon from the sky costs around $1,000 per ton or more. While Heirloom and other companies are aiming to get costs down to $100 per ton or less in the coming decades, there’s a lot that needs to happen between now and then to get there.

He compared the CDR industry to the early days of solar and wind when it comes to the potential of decreasing costs with scale. Solar penetration is currently about 3% in the U.S., and the industry has already seen a massive drop in cost. For context, solar power purchase agreements were often $100 per megawatt hour or more as recently as 2011. By 2015, they were averaging $50 per megawatt hour and have gotten cheaper since.

Policy played a major role in driving down the cost of solar power, particularly tax credits to encourage more production. The CDR industry has just seen an influx of federal support, including the Inflation Reduction Act’s 45Q tax credit for direct air capture. The Department of Energy is also planning to spend billions to create direct air capture hubs that could spur further innovation in the industry.

“We need a lot of diversified buyers from various different parts of the economy,” including corporations, governments, high-net worth individuals, and people giving small amounts, Samala said, since every additional buyer helps companies like Heirloom scale up and reduce costs as a result.

Organizations like Terraset help “galvanize individuals to play a small role in the world right now,” Samala said. Plus, the tax benefits of donating to a 501(c)(3) can provide a “pretty dramatic increase” in the impact of every dollar, given that doing so allows donors to deduct up to 60% of their adjusted gross income. That’s an incentive for individuals to give more than they would if the donation weren’t tax deductible.

Climate philanthropy accounts for less than 2% of global philanthropic giving, according to a ClimateWorks analysis. Within climate-focused giving, the nonprofit estimated that CDR received 3.85% of total average foundation funding for climate change mitigation between 2015 and 2020. Both CDR and climate philanthropy as a whole have room to grow within the larger world of giving.

French-Owen, an early Terraset donor and Silicon Valley entrepreneur, said he was impressed by what Stripe had done with its Frontier fund, “catalyzing this market between a bunch of different early-stage tech firms.” He said Terraset “felt like a good first step” when it comes to using philanthropy to help the industry mature.

“Terraset is helping to tackle a very challenging problem — how to bring in early catalytic dollars into carbon removal to help bring down costs, and answer big open questions in advance of larger government procurement efforts,” Peter Minor, director of science and innovation at Carbon180, wrote in an email to Protocol.

Roetter was inspired to start Terraset when he was “shocked” to discover that something like it didn’t already exist. But he already has big plans for it, saying he hopes Terraset becomes “the same size if not bigger” than Frontier by 2030 and eventually attracts the attention of everyone from the person who gives $50 a year to massive philanthropic organizations like the Gates Foundation.

The wealthy are largely responsible for driving the climate crisis. While philanthropy is certainly one avenue to make up for those impacts, it also amounts to getting a tax break after polluting.

Given that ClimateWorks estimated that total donations to climate change mitigation in 2020 globally were between $6 billion and $10 billion, Roetter’s goal of reaching Frontier levels of funding is a tall order. To rake in $1 billion of donations would put Terraset in the upper echelons of climate nonprofits, on the order of the World Wildlife Fund, the Natural Resources Defense Council, or the Nature Conservancy. Even in a world where climate philanthropy has grown at a faster rate (14%) than overall giving (3%), that’s a lot to hope for with a new nonprofit.

Even that would still be a drop in the carbon removal bucket, though. United Nations estimates put the need for CDR as high as 10 billion tons annually by midcentury (other experts think that may be high, though). If the industry meets its $100-per-ton cost target, that would still put the market at $1 trillion per year. Given the huge price tag, it’s clear that while private philanthropy can play a role in covering the costs of CDR, it can’t be the only driver.

Fintech

Judge Zia Faruqui is trying to teach you crypto, one ‘SNL’ reference at a time

His decisions on major cryptocurrency cases have quoted "The Big Lebowski," "SNL," and "Dr. Strangelove." That’s because he wants you — yes, you — to read them.

The ways Zia Faruqui (right) has weighed on cases that have come before him can give lawyers clues as to what legal frameworks will pass muster.

Photo: Carolyn Van Houten/The Washington Post via Getty Images

“Cryptocurrency and related software analytics tools are ‘The wave of the future, Dude. One hundred percent electronic.’”

That’s not a quote from "The Big Lebowski" — at least, not directly. It’s a quote from a Washington, D.C., district court memorandum opinion on the role cryptocurrency analytics tools can play in government investigations. The author is Magistrate Judge Zia Faruqui.

Keep Reading Show less
Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

The financial technology transformation is driving competition, creating consumer choice, and shaping the future of finance. Hear from seven fintech leaders who are reshaping the future of finance, and join the inaugural Financial Technology Association Fintech Summit to learn more.

Keep Reading Show less
FTA
The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.
Enterprise

AWS CEO: The cloud isn’t just about technology

As AWS preps for its annual re:Invent conference, Adam Selipsky talks product strategy, support for hybrid environments, and the value of the cloud in uncertain economic times.

Photo: Noah Berger/Getty Images for Amazon Web Services

AWS is gearing up for re:Invent, its annual cloud computing conference where announcements this year are expected to focus on its end-to-end data strategy and delivering new industry-specific services.

It will be the second re:Invent with CEO Adam Selipsky as leader of the industry’s largest cloud provider after his return last year to AWS from data visualization company Tableau Software.

Keep Reading Show less
Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Image: Protocol

We launched Protocol in February 2020 to cover the evolving power center of tech. It is with deep sadness that just under three years later, we are winding down the publication.

As of today, we will not publish any more stories. All of our newsletters, apart from our flagship, Source Code, will no longer be sent. Source Code will be published and sent for the next few weeks, but it will also close down in December.

Keep Reading Show less
Bennett Richardson

Bennett Richardson ( @bennettrich) is the president of Protocol. Prior to joining Protocol in 2019, Bennett was executive director of global strategic partnerships at POLITICO, where he led strategic growth efforts including POLITICO's European expansion in Brussels and POLITICO's creative agency POLITICO Focus during his six years with the company. Prior to POLITICO, Bennett was co-founder and CMO of Hinge, the mobile dating company recently acquired by Match Group. Bennett began his career in digital and social brand marketing working with major brands across tech, energy, and health care at leading marketing and communications agencies including Edelman and GMMB. Bennett is originally from Portland, Maine, and received his bachelor's degree from Colgate University.

Enterprise

Why large enterprises struggle to find suitable platforms for MLops

As companies expand their use of AI beyond running just a few machine learning models, and as larger enterprises go from deploying hundreds of models to thousands and even millions of models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

As companies expand their use of AI beyond running just a few machine learning models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

Photo: artpartner-images via Getty Images

On any given day, Lily AI runs hundreds of machine learning models using computer vision and natural language processing that are customized for its retail and ecommerce clients to make website product recommendations, forecast demand, and plan merchandising. But this spring when the company was in the market for a machine learning operations platform to manage its expanding model roster, it wasn’t easy to find a suitable off-the-shelf system that could handle such a large number of models in deployment while also meeting other criteria.

Some MLops platforms are not well-suited for maintaining even more than 10 machine learning models when it comes to keeping track of data, navigating their user interfaces, or reporting capabilities, Matthew Nokleby, machine learning manager for Lily AI’s product intelligence team, told Protocol earlier this year. “The duct tape starts to show,” he said.

Keep Reading Show less
Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

Latest Stories
Bulletins