Catona Climate, a climate finance company, has introduced an innovative solution that directly integrates carbon dioxide removal (CDR) into artificial intelligence (AI) infrastructure. This advancement broadens the reach of its climate finance model, allowing businesses worldwide to efficiently offset the climate impact of AI’s energy consumption with high-quality carbon removal credits.
AI promises significant benefits for climate action across various sectors such as energy, transportation, healthcare, agriculture, and forest management. It also offers detailed emission tracking and advanced early detection systems for natural disasters. Projections suggest that scaling AI technologies could help reduce global greenhouse gas emissions by 5-10% by 2030, potentially contributing up to one-fifth of the IPCC’s interim target for achieving net zero by 2050.
However, AI also poses significant climate risks, particularly due to the high energy demands of data centres required to support it. This rapid growth in AI is leading tech companies to reassess their emissions forecasts, increasing the demand for high-quality carbon removals.
Catona Climate’s new carbon financing model addresses this demand. Leveraging its expertise, Catona will help other companies investing in AI lock in the high-quality credits they will need in the coming years with flexible forward offtake agreements. Additionally, these agreements create strong demand signals, which raise investor confidence driving critical capital toward the chronically underfunded nature-based carbon projects.
Currently, Catona is collaborating with upstream digital infrastructure providers to extend access to these high-quality carbon removals to a broader range of businesses through the forward offtake model. Their new solution integrates climate action into the core AI architecture, automatically offsetting residual emissions with premium credits. This allows companies of all sizes to obtain the same carbon removal credits as large enterprise buyers, providing an automated and scalable approach to managing the unavoidable emissions associated with AI.
Goldman Sachs recently reported that AI training and applications could drive data centre power demand up by 160% by 2030, potentially making data centres responsible for up to 4% of global energy consumption by the end of the decade. Solutions like those developed by Catona will be crucial for channeling billions of dollars into high-integrity carbon removal projects and ensuring that AI’s positive potential is achieved with minimal climate impact.
“Our challenge over the coming years will be to harness the power of AI for good while mitigating as best we can its negative climate effects. Catona is uniquely positioned to help mitigate the effects of AI’s inevitable energy surge by working with leaders in the AI space to scale high-quality carbon removal projects. But we need to go beyond forward offtake agreements and – in parallel to innovating around how we accelerate global decarbonisation efforts – deploy more creative, accessible, automated climate solutions that embed carbon removal upstream into the fastest-growing, hardest-to-abate supply chains and technologies – including AI,” said Catona Climate CEO Tate Mill.