Two years ago, a group of major companies threw their collective weight behind one of the cleantech market’s greatest challenges: making affordable carbon dioxide removal available at the gigaton scale. Led by Stripe, a group of companies that also includes Google parent Alphabet, Shopify, and McKinsey, among others, created a pool of cash dedicated to purchasing tons of removal as it becomes available, essentially guaranteeing future demand.
In the years since, that advance market commitment, dubbed Frontier, has contracted more than $300 million to projects that span all four major CDR pathways: direct air capture, biomass-based approaches, enhanced weathering, and ocean CDR.
That accounts for around a third of the over-$1 billion fund, and has included seven deals that are both multi-year and multi-million dollar offtake agreements.
Frontier’s original thesis, explained head of deployment Hannah Bebbington, was that early customers of new technologies that don’t yet exist at scale, could signal demand — and help pull those technologies down the cost curve.
Two years in, Frontier is starting to see some “leading indicators” that its vision has legs. But reaching what Frontier calls “climate-relevant scale” by 2050 remains an incredibly steep undertaking. And despite some early wins for carbon removal deployment, demand is not on track to meet the approximately $20 billion per year needed by 2030. The next few years will therefore be crucial.
“We’re starting to see more technologies come into the market, more technologies [start] to deliver, and more technologies be more offtake-ready,” Bebbington told Latitude Media. But the crucial question, she added, remains unanswered: is demand going to materialize in time?
“We’ve had a slower expansion on the demand-side of the market,” she explained. “It’s been slower for new buyers to come in, slower for compliance regimes to get started.” But those are challenges Frontier is already anticipating and working to mitigate, Bebbington said. Now, one key job for Frontier is to ensure that the rest of the market is “as eyes-wide-open as we are” about the bumpy road ahead.
Leading indicators
The market is nascent enough that there’s not yet a clear formula for funding carbon removal. Frontier purchases carbon removal via two funding tracks: a “pre-purchase” track offering low-volume agreements with up-front payments to early-stage suppliers; and an “offtake” track aimed at larger suppliers and involving contracts to buy future tons of removal when they’re delivered.
Today, the application pools for both tracks supply “leading indicators” of Frontier’s progress, Bebbington said.
The first is the total size of the pre-purchase application pool. For instance, Frontier’s most recent funding round had more than seven times as many applications proposing permanent CDR solutions as its first round did, Bebbington said. And the cohort of companies selected was the most geographically diverse to date, she added, with headquarters in five different countries.
A second metric is the pipeline from pre-purchase to offtake. The idea behind the two tracks approach, Bebbington explained, is that a company would raise a little bit of seed money before getting a prepurchase from Frontier to help them demonstrate that their technology works. Assuming it does, the company would deliver its removal to the Frontier customer. Then, around the time they’re raising a Series A or a Series B, Frontier would become one of its first offtakers, which in turn would help raise more money, get more customers, and scale.
“And we are already seeing that a lot of our pre-purchase companies are starting to move into that offtake-ready stage,” Bebbington said. Of the seven offtake deals that Frontier has completed, four of the companies were previously in Frontier’s prepurchase portfolio: Charm Industrial and Heirloom signed pre-purchase agreements with Stripe Climate before Frontier was officially launched, then Vaulted Deep and Lithos later signed pre-purchases facilitated by Frontier on behalf of its buyers.
But the third leading indicator, delivery, hasn’t fully materialized.
As of 2024, 1,716 tons of carbon removal have been delivered, all via Frontier’s pre-purchase track, the vast majority of that from biomass-based approaches. That’s a tiny fraction of the nearly 600,000 tons Frontier has contracted.
“We are still in early days from a delivery perspective,” Bebbington said, “and so the vast majority of our contracts, especially the ones that have been signed in the last couple of months, are expected to deliver in the next couple of years.”
Frontier expects to see a ramp-up in delivery toward the end of 2024 and throughout 2025. However, it’s not until 2026 or 2027 that they expect delivery to really take off exponentially.
“Delivery is a muscle that we are learning how to flex, as are our suppliers,” Bebbington said.
The Frontier impact
One of the companies that moved through Frontier’s pre-purchase and offtake pipelines is Vaulted Deep, a Houston-based startup that uses slurry injection tech developed by the oil and gas industry to inject organic waste into deep wells.
That technology was already being used outside of the energy industry by the waste management services company Advantek. The Vaulted Deep team incubated the carbon removal startup inside Advantek for a year before officially spinning out into their own company in 2023.
Frontier granted the company’s pre-purchase agreement the week of the spinoff. And according to Vaulted Deep cofounder and CEO Julia Reichelstein, that deal helped spur an $8 million seed round.
The initial pre-purchase agreement was small, at just under 2,000 tons, which Vaulted has since delivered. But Reichelstein said that more important than the quantity for Vaulted’s trajectory was the amount of diligence Frontier conducted before agreeing to the deal.
“What you get out of it at the end is not just money for your tonnage, but also a stamp from one of the best-quality brands,” Reichelstein said.
Late last year, Frontier contacted Vaulted Deep about exploring an offtake agreement, and in May the pair signed a $58.3 million deal to deliver 152,000 tons of removal between now and 2027. Of those tons, 18,000 will be delivered by the end of this year.
We’ve had a slower expansion on the demand-side of the market. It’s been slower for new buyers to come in, slower for compliance regimes to get started.
That was Vaulted Deep’s first large offtake deal, Reichelstein said, and it was ultimately a deal that was specific to the company’s approach and maturity level.
“We had the opportunity to stretch out to 2030, but we intentionally pushed those tons forward,” she explained. That’s in part because the company’s first injection sites were inherited from other sectors, rather than being purpose-built for carbon removal. That means they aren’t as cost-effective as the sites Vaulted Deep has planned for the coming years.
“In Frontier, we got a buyer to pay a price that meant we could actually operate those sites as a young company, and buy us some time to come down the cost curve,” Reichelstein said.
At least in this way, the model is working so far. This time last year, Reichelstein and her confounder weren’t sure they’d have enough buyers for the tons they could remove at their first site. Today, Frontier has agreed to purchase a large chunk of their near-term volume.
“That means we have a little more time as the market continues to develop, both on the voluntary side, but we’re also seeing a lot of levers on government purchasing,” she said. In short, she added, “Frontier is wildly catalytic.”
2025 and beyond
Because it’s still such early days, it’s difficult to predict what the CDR landscape will look like as it continues to mature.
For example, Frontier expects to see a significant amount of direct air capture coming online in 2025, but that’s less because DAC will be a prominent fixture in the long-term portfolio, and more because it takes quite a long time to build the infrastructure necessary to deliver tonnage, Bebbington said. The expected DAC has been planned-for and in development since the early days of CDR deployment.
“DAC has a bit of a leg up in terms of hype, investment, government spending, and that just means we probably had more DAC companies get started earlier,” she said. That growth curve will start to even out, though, because the pathway faces some pretty steep challenges compared to others, like advanced weathering.
Once the industry manages to “crack” measurement, reporting, and verification, or MRV, for advanced weathering, Bebbington said, “you can start to put down lots and lots of rocks pretty quickly, as opposed to having to wait and raise capital and construct a large facility.”
Looking ahead, Frontier is particularly excited about projects and companies that can “piggyback” on existing industrial infrastructure, as a way to scale quickly, Bebbington said.
But despite the projected growth in deliveries, she conceded, the next few years are expected to be bumpy ones.Some of the biggest challenges, such as designing an offtake agreement for CDR, Frontier has managed to iron out in its first few years. But others — like continuing to expand demand at a sufficient pace, and developing compliance regimes and measurement metrics — remain.
For several of those, Bebbington said, government involvement is an absolute must. Frontier’s entire fund represents just a tiny part of the estimated $20 billion a year needed within six years. And from where the industry stands today, reaching that number “is feeling like a really tall mountain to climb.”
That money is unlikely to come solely from the voluntary carbon market — instead, she added, it will be a “patchwork quilt of other policies in a variety of countries.”
In the next few years, Frontier will in part be measuring its success by the expansion of the market, Bebbington said: “Frontier will have done our job in spending our fund if demand is no longer a bottleneck for great carbon removal companies.”
Another metric will be failures, which will indicate that Frontier is taking “a healthy amount of risk,” she added. “if we know which pathways work and don’t, we [can] close some doors and can start to narrow the field’s focus.”
Bebbington suggests looking at other industries that were built from the ground up.
“We should expect some technologies outright don’t work,” she said. “Some technologies take longer to build. Some are more expensive than we’d expected and run over budget. Some teams are just not that great…that’s not inherent to carbon removal, but it’s what it means to be building infrastructure for the first time.”
And of course, between now and 2030, delivery will remain the holy grail metric, especially as the industry aims to bring costs down.
“In the next few years, the companies that we buy from will actually start to deliver,” Bebbington said. “They will not deliver on time and in full. That’s not our expectation. But they will start to deliver this decade, and we’ll start to see a lot more buyers come to the table.”
