Overcoming Common Carbon Removal Procurement Challenges

by Stacy Kauk, Head of Sustainability at Shopify

At Shopify, we made our first carbon removal purchases in 2020. That’s eons ago in the carbon removal world, which undergoes massive changes just about every quarter.

So even though Shopify has only been in the carbon removal (CDR) space for a few years, we’re veritable old-timers now.

We recently published a guide, Buying Carbon Removal, Explained, that tackles common challenges of buying carbon removal. Let’s dig into three of the most common obstacles that companies are likely to face when they commit to carbon removal.

1. “I want to buy carbon removal, but how can I make the financial case to the decision makers in charge?”

There’s no shortage of interest in carbon removal – and specific callouts in this year’s IPCC report and the Inflation Reduction Act have further catalyzed that interest. There is, however, a shortage of buyers, which is a huge problem. 

After all, project developers will only finance projects if they generate revenue and profit, which introduces a wicked chicken-or-the-egg dynamic: Without buyers, prices won’t drop. And without prices dropping, there won’t be more buyers. 

All too often, conversations stall at cost. And cost is a hangup because decision makers don’t understand why they should spend hundreds or even thousands of dollars on carbon removal credits when carbon offsets can be had for just a few bucks.

First, I want to correct a common misconception. Carbon removal is nothing like carbon offsetting. Carbon offsets mean that someone over here agrees not to emit carbon so that someone over there can. So naturally, carbon removal is outlandishly expensive when compared to carbon offsets. But the problem isn’t the cost – the problem is the comparison to offsets in the first place.

If you need to convince decision makers of the merits of carbon removal, a good place to start is by highlighting the catalytic impact of carbon removal purchases. Explain that purchases now are an investment in future access to carbon removal. That access comes in the form of right of first refusal opportunities – i.e., companies that you support will come to you first as they scale up – and by ensuring that the carbon removal market expands to meet what will inevitably become astronomical demand as regulations compel companies to remove their emissions.

We tackle the stakeholder buy-in challenge and lots more in our new guide, Buying Carbon Removal, Explained. In the guide, we break down how to make a compelling case for carbon removal to your company’s decision makers – especially scrutinizing decision makers in Finance.

2. “I want to buy carbon removal, but where can I even do that?”

CDR companies are laser-focused on proving their technology and are not yet even looking for customers.

Said differently, CDR companies are just getting started and the infrastructure to buy carbon removal is just developing now. Access is challenging.

From Shopify’s Buying Carbon Removal, Explained guide

Unlike carbon offsets, which are peddled by brokers and marketplaces, the best place to buy carbon removal is usually from carbon removal suppliers themselves. For very small purchases, marketplaces are a viable option. But for purchases of a meaningful size – i.e., the kind of purchases that the industry needs – contacting companies directly through their websites is the best route.

For entrepreneurs new to the carbon removal industry, a good place to find buyers is watching out for RFPs from large companies, as well as application rounds from groups like Frontier.

3. “I want to buy carbon removal, but shouldn’t I focus on emissions reductions first?”

Few things grind my gears more than the false dichotomy between reducing emissions and supporting carbon removal. Both are essential. One more time, for the people in the back: Both. Are. Essential.

There’s already too much carbon in the atmosphere – billions of tonnes too much. So even if there were a magic wand to bring emissions from where they are now all the way down to zero overnight, we’d still have a problem on our hands.

That’s why companies and sustainability teams from every sector need to prioritize carbon removal alongside – not after – carbon reduction. 

We need to start pulling gigatonnes of carbon from the atmosphere every year by mid-century to avoid a very hot and very messy future. That’s billions of tonnes per year, if we start now. To date, carbon removal technologies have managed to permanently store less than 10,000 tonnes of carbon from the atmosphere. We have a long way to go, so we can’t afford to wait until all emissions reductions have been achieved. 

I understand that some very credible, very well-intentioned sustainability initiatives have carbon removal buried at the bottom of the to-do list – after years of planning and reduction efforts have been implemented. That doesn’t check out. That’d be like committing to a healthy lifestyle but refusing to exercise until 2030 – after calorie reduction efforts and dietary changes have been implemented.

It’d be best to go ahead and start exercising now. And it’d be best to go ahead and support carbon removal now, too.

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✍️ The Draw-down

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