Ocean carbon removal startup Running Tide delivers inaugural credits to Shopify - Financial Post

Ocean carbon removal startup delivers first credits to Shopify | Financial Post

The startup sank wood waste to the sea floor, sequestering carbon for hundreds or even thousands of years

Article content

Ocean carbon removal startup Running Tide has delivered its first-ever carbon removal credits to inaugural buyer Shopify Inc., the companies announced Aug. 9.

tap here to see other videos from our team.

Ocean carbon removal startup Running Tide delivers inaugural credits to Shopify Back to video

Running Tide sank more than 1,000 tons of limestone-coated wood waste to the ocean floor roughly 100 miles south of Iceland. That wood would have otherwise been burned, releasing carbon dioxide into the atmosphere. Instead, the startup says the CO2 contained in this material will be safely stored on the ocean floor for 800 to 10,000 years, depending on a variety of factors. The process removed 275 net tons of carbon dioxide equivalent after accounting for project-related emissions, with 100 tons going to Shopify, according to a company statement.

Article content

Global commerce company Shopify has not yet determined when and to what activities it will count the resulting carbon credits against, but Stacy Kauk, the company’s head of sustainability, said it will likely decide at the end of the year.

The amount of carbon removed in this project is relatively small compared to Shopify’s gross operational emissions, which were over 30,000 tons in 2022, according to the company’s 2022 Climate Report.

“A focus of our effort is to pick out these entrepreneurial early stage companies and give them support by being their first customer, to send that signal to the world that this is a solution we should pay attention to,” Kauk said.

To date, Shopify has largely relied on purchasing and retiring carbon removal credits. That includes over 23,000 tons of carbon removal credits in 2022, which account for the bulk of how the company offset its emissions. The rest was achieved through measures like agreeing to purchase renewable energy power and renewable natural gas credits. (The company’s emissions rose dramatically compared to 2021 owing to offices reopening and travel resuming.)

Article content

Running Tide has faced controversy in recent years, most notably after insiders raised concerns around the company’s practices having potentially negative ecological impacts, according to MIT Technology Review. Industry NGOs have also drawn attention to the potential risks ocean-based carbon removal poses to ecosystems.

Besides sinking wood, Running Tide is also exploring carbon removal methods that include increasing the ocean’s alkalinity, which could up its capacity to absorb CO2. Using limestone, like what was used on the wood sunk for this project, is one avenue to do so. The startup is also exploring growing kelp — which takes up CO2 as it grows via photosynthesis — and sinking it, thereby sequestering the carbon on the sea floor. The startup is aiming to sell ocean alkalinity-based removal credits in 2024 and macroalgae in 2025, according to senior vice president Jordan Breighner.

Chief executive and founder Marty Odlin said the company is addressing the potential negative impacts its techniques for sequestering carbon on the sea floor could have on biodiversity and ocean ecosystems using a variety of methods. That includes deploying a system of sensors that help monitor where in the ocean the biomass sinks and designing removal systems to have the lowest localized impact. The protocol around system design has been independently reviewed and approved by Deloitte. Running Tide is also working with research partners, including the Monterey Bay Aquarium, to see how its carbon removal techniques are affecting chemistry and ecology on the ocean floor.

Article content

“We’ll start ramping scale as the ocean tells us we’re able to,” Odlin said.

The startup is balancing that need for safety with the carbon removal industry’s attempt to scale quickly. Most efforts to remove CO2 are just at research or pilot stage, but the majority of research shows the world will need to remove billions of tons of CO2 by mid-century if the world is to limit global warming to 1.5C.

To verify that its methods have the carbon benefit it’s claiming, Running Tide has installed almost 300 sensor buoys on the surface of the ocean to measure things like ocean roughness, which impacts the rate at which the biomass sinks. That’s critical because where it sinks matters; the company only considers carbon to be removed if the biomass settles below 1,000 meters, said Breighner.

The company has not yet enlisted a third-party registry to independently verify the delivery of removal credits and is currently vetting some options, according to Breighner. As the nascent carbon removal industry attempts to grow from pilot stage to mass commercialization, industry experts agree that outside oversight and robust measuring, reporting and verification will be critical to ensuring that what startups claim they’re doing actually happens.

Article content

Odlin said 2023 deliveries will be on the order of 10,000 tons of carbon removed, with the company planning to double or triple the amount of carbon it stores on the sea floor year over year. That coupled with the company’s environmental monitoring initiatives highlights the tension between the need to avert catastrophic climate change and do so in a way that doesn’t harm ecosystems.

Although Shopify would not disclose how much it paid for Running Tide’s removal services, Odlin said Running Tide’s typical market price is US$250 to US$350 per ton. The Shopify sale was not profitable for Running Tide, as the company is still at research scale, and building its systems requires “a tremendous amount of overhead,” according to Odlin.

Recommended from Editorial

“We’re going to need to scale this up faster than any effort in human history,” Odlin said. “This is the hardest thing humans have ever done, to rebalance the carbon cycle, and we’re going to do it because the world’s going to burn if we don’t.”

Article content

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.