Why JPMorgan, H&M and others will pay $57.1 million to spread crushed rock on farmland – GWC Mag

The Frontier Fund, a corporate buyers’ group including Alphabet, H&M, JPMorgan, Shopify and Stripe, this week announced a $57.1 million contract with startup Lithos Carbon, which is developing a method for removing carbon dioxide from the atmosphere by spreading crushed rock on soil.

The deal is the largest yet for Frontier, a $1 billion project created last year to scale-up carbon removal techniques. The agreement with Lithos calls for 154,000 metric tons of carbon dioxide to be captured between 2024 and 2028 via “enhanced weathering,” which mimics the way CO2 is naturally absorbed into rocks as they are exposed to rain, wind or sea. 

At least half the contract should be delivered by the end of 2025, said Nan Ransohoff, head of climate and Stripe, and also of the Frontier initiative. That’s quicker than other methods that received early investments from the group, she said.

Contracts that signal future demand

Frontier has made similar “offtake” transactions with direct air capture startups Heirloom and CarbonCapture, and with Charm Industrial, which converts agricultural waste into bio-oil. All these approaches ensure that carbon dioxide is captured “permanently,” or for at least 1,000 years.

“Offtake” contracts with Frontier give investors confidence in financing early projects by proving corporations are willing to buy certificates for removals as they are delivered and verified, said Ransohoff. “It offers more evidence that there are buyers and helps de-risk this work,” she said.

Under the Lithos contract, Frontier’s buyers will pay $370 per ton, including the verification process. That is substantially less than the $500 it paid Lithos for an earlier test project just one year ago, but far more than the $100 per ton price experts predict will be necessary for carbon removal technologies to earn mainstream appeal.

The annual demand for carbon removal offtakes could reach 40 million-200 million metric tons by 2030, according to the Boston Consulting Group. The capacity available today is a fraction of that amount, and Frontier hopes to encourage more supply. 

A process that pays farmers

Enhanced weathering has received less attention than approaches such as direct air capture, in part because it has been difficult to measure and verify the impact of this approach without intensive fieldwork. “Unlike other pathways, the crux of the challenge is logistical and operational rather than technical,” Ransohoff said.

Lithos is pioneering its method on more than 80 farms in nine U.S. states in the Midwest, Southeast and Mid-Atlantic regions. It offers finely ground basalt, a by-product of quarries, as an alternative to lime for farmers seeking to address the acidity of soil in their fields. The powder is spread using regular farming methods. It reacts with rainwater and turns into bicarbonate, which eventually makes its way to the ocean where the carbon dioxide is stored.

The startup measures how much carbon dioxide is removed from the atmosphere by monitoring changes in the soil’s geochemical profile. Lithos CEO Mary Yap said the company plans to share this data, which should illustrate how different soil types and weather conditions can affect results, advancing the potential of the enhanced weathering approach. The deal with Frontier will help speed the company’s scale-up timeline by three to four years, she said.

Participating farmers receive the basalt powder at no cost, compared with the price of $90 per ton it can cost them to buy limestone, she said. In addition, they are being paid $50 per acre for their participation. “The net value to a farm can be significant,” she said.

One of Lithos’s partners, a large corn-farming operation in Wisconsin, saw a 36 percent increase in crop yields after applying basalt to its fields. “With the increasing cost of fuel and fertilizers, anything that can improve crop productivity is vital to our business,” said owner Paul Lapacinski.

The farmland on the Lithos waitlist could eventually accommodate the removal of 2.1 million metric tons of CO2 annually. “It’s a question of how we scale something the Earth already knows how to do,” Yap said.