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Sales at Amazon, the nation’s largest online retailer, have surged amid the coronavirus pandemic. That means more data crunching, more deliveries — and, as a result, more climate-warming emissions.
Shipping millions of packages daily in trucks, planes, and boats generates a lot of carbon dioxide. Amazon also has a massive footprint of buildings that it leases or owns that gobble up energy.
Following pressure from employees to do more to address climate change, the company vowed in 2019 to slash its greenhouse gas emissions to net-zero by 2040. And it’s calling on startups to help.
The Amazon fund places bets on startups that offer financial returns and provide technology that will help Amazon cut its own emissions, said Matt Peterson, a director at Amazon who leads the fund.
In an interview with Insider, Peterson detailed three kinds of tech the fund is after, and why Amazon is among the many companies so bullish on green hydrogen.
‘We use Amazon as a barometer’
The Climate Pledge Fund — which has already spent a substantial portion of its $2 billion — works in concert with Amazon’s sustainability department and its scientists and engineers to find and select startups, Peterson said.
So far, the fund has backed at least seven firms, according to company announcements.
Amazon isn’t looking for a silver bullet, Peterson said. Instead, it’s experimenting with a range of technologies and using Amazon as a testing ground.
“We use Amazon as a barometer,” Peterson said. “If it works for us, it might work for many other companies, too.”
Peterson zeroed in on three kinds of tech that address carbon-intensive parts of the company and are especially tough to clean up.
Transportation accounts for the majority of the fund’s bets
To cut emissions across its entire business, Amazon will need to figure out how to ship its products without relying on fossil fuels.
“We believe that electric vehicles really make sense for what we’re doing [for the] last mile,” Peterson said. “We have to find what’s the equivalent for air travel. What’s the equivalent for maritime shipping.”
Green hydrogen — or hydrogen gas produced using renewable energy — is “very interesting” to Amazon, Peterson said.
“Hydrogen can solve a lot of the issues that electrification that batteries aren’t yet able to,” he said. “Hydrogen is a very fertile ground for innovation.”
Amazon is also betting on next-gen renewables and building management
Amazon is also looking for startups that help curb emissions from buildings. And here’s why: The company owns or leases about 475 million square feet of office space, fulfillment centers, and other sites, according to public filings. That’s about three-fourths of the size of Manhattan.
“Just given the carbon footprint we have with our own buildings, the amount of real estate that we have as a company, that’s also really important, too,” Peterson said of backing startups that improve building efficiency.
So far, Amazon has funded Turntide Technologies, which makes efficient electric motors that can lower the energy consumption of HVAC systems, and CarbonCure. CarbonCure develops a concrete that generates fewer carbon dioxide emissions.
“If you can reduce the electricity consumption of our HVAC system that’s a really big savings — both cost-wise and energy-wise,” Peterson said.
Part of the fund will also go towards energy storage including grid-scale batteries and next-generation renewables, which could include new wind turbine technology, Peterson said.
Amazon is likely to announce additional financing for the fund soon, he said.
“Hopefully by 2040 or sooner we’re going to have results to show,” he said.
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