Europe Poised to Lead in Carbon Removal, says Stripe Founder

John Collison, founder of the US-Irish payments giant Stripe, has urged Europe not to forgo the opportunity to become the global frontrunner in carbon removal. Speaking at the Sifted Summit, Collison highlighted Europe’s robust regulatory structure and its wealth of deep tech talent.

Europe’s Climate Tech Opportunity

Collison sees a new opportunity for Europe in climate tech, citing the considerable political energy and increased support for the sector. In his conversation with government AI advisor and Entrepreneur First founder Matt Clifford, he noted the potential in Europe’s climate tech scene.

Stripe’s own initiative, the Frontier Fund, launched in 2022. Backed by tech titans Alphabet, Shopify, and Meta, as well as McKinsey consultants, international banks, and smaller Stripe customers, the fund aims to invest $1bn in carbon removal tech from 2022 to 2030.

Carbon “Hoovering” and European Startups

Collison stressed the need to extract carbon from the atmosphere, likening the process to the post-Glastonbury cleanup of the industrial age. He also shared that a number of startups that the Frontier Fund supports will be European.

Europe’s cohesive approach to regulation, evidenced in its fintech ecosystem, sets the region apart. Unlike the US’s patchwork regulatory framework, Europe has introduced continent-wide regulations like PSD2 (Payment Services Directive Two) and open banking, leading to significant success in the sector.

Quality Carbon Removal and the “Moral Hazard”

Collison, however, pointed out a significant obstacle to Europe’s lead in carbon removals. Despite Europe’s thriving tech scene, he stated that “no-one is buying” effective carbon removals due to the prevalence of substandard carbon offsetting solutions in the market.

He described carbon offsets as a “moral hazard,” stressing that they are not a foolproof solution to carbon emissions. High-quality carbon removal methods, such as carbon-absorbing sand or kelp that extracts carbon from the atmosphere before sinking to the ocean floor, are “two orders of magnitude” more expensive.

The Frontier Fund aims to reduce these costs by scaling the technology. However, Collison emphasized that it’s only part of the solution. He called for reducing global carbon emissions and implementing a carbon tax, noting that emissions have increased in all regions worldwide since 1990, except for Europe.