Tech giants including Microsoft, meta, Alphabet and Salesforce are pouring more money than ever into climate solutions designed to pull carbon dioxide directly from the air.
The multimillion-dollar investments are the latest moves by high-tech leaders to boost the small but growing field of carbon dioxide removal, or CDR, as they seek to meet ambitious climate goals while consuming mind-boggling amounts of energy.
"We need carbon removal as an insurance policy," Salesforce's lead on carbon removal, Jamila Yamani, told Newsweek. Salesforce recently announced $25 million for the CDR investment company Frontier to make sure carbon removal technology will be ready when needed.
"It's going to require early investment today in order for us to have it available to use later," Yamani said.
Other recent announcements included nearly $49 million in CDR purchases by Frontier on behalf of tech companies, and a pledge by Microsoft to buy millions of carbon removal credits for reforestation—a deal that the company called the world's largest such transaction to date.
The funding announced will support tree-planting projects in Latin America and a carbon-capture addition to a biomass energy facility in Sweden, demonstrating the broad range of CDR approaches that tech companies are backing.
Previously, tech companies have invested in some carbon removal machinery that seemed like the stuff of science fiction just a short while ago but has now grown to commercial application.
The Swiss company Climeworks used millions of dollars from tech companies to take its carbon removal technology from a lab experiment 15 years ago to the world's largest direct-air carbon removal facility unveiled in May.
Climeworks' Mammoth plant in Iceland, its second commercial-scale facility, uses that country's abundant and carbon-free geothermal energy to power what is basically a very large, sophisticated CO2 vacuum cleaner. The company expects Mammoth to pull 36,000 tons of CO2 from the air each year and sequester it underground.
Climeworks Vice President for Client Solutions Adrian Siegrist said there are three main reasons that tech companies are the biggest early supporters for his company and other CDR work.
"One, they themselves have massive pressure to decarbonize," Siegrist told Newsweek. "That pressure has even increased with the entire AI revolution."
Training and operating large artificial intelligence models requires much greater computing power, and that means more data centers and more electricity to power and cool them. A recent projection by the Electric Power Research Institute said that by the end of this decade, data centers could consume up to 9 percent of all electricity produced in the U.S., double what they use today.
Second, Siegrist said, the culture of tech companies matches well with the pioneering nature of CDR work.
"These companies are used to innovation," he said. "So, it is kind of a natural fit for them to look with the same lens at the climate space."
And third? Well, money. Tech companies have the resources to make things happen as CDR companies try to scale up. Climate scientists say that in addition to rapidly cutting emissions and ramping up clean energy, the world must also find ways to draw down the excessive CO2 we have been putting into our atmosphere.
"Carbon dioxide removal as a strategy for solutions on climate change is a really important piece of the puzzle," Rhodium Group partner John Larsen told Newsweek. Rhodium, an independent research firm with a focus on energy and climate change, produced a major report earlier this year on the status of CDR methods. Its bottom-line finding: CDR needs to grow.
"The U.S. alone is going to need about a billion tons of carbon dioxide removal by mid-century," Larsen said. Rhodium research found that the U.S. is on a path to remove only about 50 million tons of CO2 by 2035.
"We have a long way to go," he said.
Blending Trees and Technology
Rhodium's report on carbon removal covers CDR efforts across a spectrum, from nature-based solutions such as forestry and agriculture to the futuristic technology of Climeworks' Mammoth project.
"There's a lot of different ways to do this," Larsen said, and each has its own costs, tradeoffs and environmental effects to consider. "Natural solutions tend to be fairly affordable and ready to go, commercially," he said, but nature's path to carbon removal can be harder to measure.
There's also a plan to use nature to draw down CO2.
Microsoft made a deal with BTG Pactual Timberland Investment Group for up to 8 million nature-based carbon removal credits through 2043. Those credits will be generated by Timberland Investment Group's $1 billion reforestation work in Latin America, the companies said in a statement.
Brian Marrs, Microsoft's senior director of energy markets, told Newsweek that nature-based solutions are an important part of the company's climate goals and will represent about half their CDR purchases.
"We will not realize a smooth transition to a low-carbon economy without nature-based solutions," he said.
The carbon credit market for forestry projects has been a fraught area for many companies, and many projects to plant or protect trees were found to be falling short of climate goals. "Our confidence in this area of carbon dioxide removal has grown as the market has matured," Marrs said.
Environmental NGO and nonprofit Conservation International will offer advice on environmental impacts to make sure the tree planting and restoration work fits with other goals such as protection of biodiversity.
Microsoft and BTG Pactual both appear on Newsweek's rankings of responsible and trustworthy companies. BTG Pactual, based in Brazil, was 44th in the financial services sector in Newsweek's ranking of the World's Most Trustworthy Companies 2023. Microsoft is fifth among software & telecommunications entries on Newsweek's list of America's Most Responsible Companies 2024.
Frontier's latest CDR purchases blend nature and technology. The company formed in 2022 with backing from tech firms Alphabet, Meta, Shopify, Stripe and others with the goal of providing demand for the nascent CDR industry.
Hannah Bebbington, Frontier's head of strategy, told Newsweek that the company has just completed a contract with Stockholm Exergi, a company that burns waste timber products to provide heat and energy for the city. Under the deal, Exergi will add technology for carbon capture and storage to its facility.
"This bioenergy facility will capture all of the carbon that it was originally going to emit and we buy that as carbon removal," Bebbington explained. She said Exergi will be able to capture about 800,000 tons of carbon a year, and rigorous oversight by Swedish authorities will ensure the integrity of the carbon removal process.
Salesforce, which is 35th in the software & telecommunications sector in Newsweek's list of America's Most Responsible Companies 2024, said its $25 million for Frontier is a step toward meeting a $100 million funding goal.
Salesforce's Yamani said that each CDR project that companies support does more than just remove some CO2, it also helps pave the way for a bigger carbon removal industry.
"We want to drive innovation at scale, we want to accelerate these technologies," she said.
The other important metrics she's watching include how many new projects advance toward commercialization and how many new buyers take part in the CDR market.
Scaling Up Carbon Removal
Despite big tech's enthusiasm for CDR projects, Rhodium's report demonstrates that these investments pale compared to the scale that many scientists say will be needed.
"It is unlikely that the private sector is going to rise to the occasion here completely," Rhodium's Larsen said. "We really do see a role for additional government policy."
There are some early indications of government support. In May, the U.S. Department of Energy announced finalists in its contest for CDR projects to receive government funding. They include Climeworks, which plans its first U.S. project, Cypress, in Louisiana.
Larsen said the early CDR investment by tech companies has helped raise the profile of a set of climate solutions that have been underappreciated.
"It's one of the only options we have, in the long run, to reduce atmospheric concentrations of CO2," he said. "It should be just as important as building more clean electricity and electrifying transportation and all the other things that people think of when they think of how to solve climate change."
