(Bloomberg) -- A Stripe Inc.-led group for buying carbon removal services struck its first major deal in Europe on Tuesday as it aims to help stimulate a global market for the technology.

The Frontier fund, which includes companies such as Alphabet Inc. and Meta Platforms Inc., will pay $48.6 million to Stockholm Exergi AB to capture and store carbon. The Swedish utility burns biomass — including wood chips and logging waste — at power plants, and it aims to trap emissions at its Stockholm facility using a carbon capture and storage system. This process can prevent materials like branches and sawmill dust from decaying and releasing carbon into the atmosphere.

The updated plant is slated to go into operation in 2028, and Exergi says it will be able to capture up to 800,000 tons of CO2 annually. While Exergi’s plant will be among the largest projects of its kind, the total carbon it promises to remove represents a small fraction of the billions of tons the world will likely need to pull from the atmosphere annually by mid-century in order to limit global warming to 1.5C (2.7F).

The captured CO2 will be cooled and compressed into liquid form before being transported to an underground storage facility in the North Sea, though Exergi has yet to determine a specific storage program.

The retrofit is funded in part by a €180 million ($193 million) grant from the EU Innovation Fund. While the technology involved has proven effective at smaller installations, Exergi’s will be one of the first biomass projects to deploy it at a large commercial scale. Microsoft Corp. has also bet on the retrofit, signing a deal to pay Exergi for 3.3 million tons of carbon removal last month.

By striking advance deals for future deliveries of carbon removal certificates, the Frontier group — which also includes Shopify Inc. — aims to prove there’ll be demand for the technology, and help encourage development of new projects. The member companies have committed more than $1 billion to pay for removal services, with Salesforce Inc. joining Frontier on Tuesday and pledging an additional $25 million to the fund.

Sweden’s government will conduct a reverse auction to determine the exact volume and price per ton of carbon removal sold to Frontier buyers. Purchasers include Stripe, Alphabet, Shopify, Meta Platforms, and McKinsey Sustainability, as well as Autodesk Inc., Hennes & Mauritz AB, JPMorgan Chase & Co., and Workday Inc.

Biomass carbon capture has come under fire from scientists and policymakers for being ineffective in reducing emissions and causing deforestation. Frontier insists it has set stringent conditions, including the use of waste rather than purpose-grown biomass, and requirements to buy the material from highly regulated jurisdictions, like Sweden.

“Responsible biomass sourcing is the foundation of getting the overall biomass-based approaches right,” says Hannah Bebbington, Frontier’s strategy lead. Last month, Frontier announced another $58.3 million biomass-based carbon removal deal with the startup Vaulted Deep, which injects carbon-rich waste from landfills, wastewater facilities, and feedlots into the ground.

With this new agreement, well over half of Frontier’s financial commitments have gone towards biomass-based solutions. 

“BECCS features prominently” in most projections for reaching net zero emissions, according to Anela Arifi, a Knight-Hennessy scholar and PhD candidate at Stanford University who researches biomass energy. Retrofitting existing facilities has the potential to remove up to 1 billion tons of CO2 annually, according to Frontier’s calculations.

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