Xpansiv New Carbon Credit Rival “Carbonplace” to Launch Soon

Carbon credit transaction network Carbonplace formed by nine global banks including UBS Group AG and Canadian Imperial Bank of Commerce will launch early 2023 after going through pilot trades.

The new platform, Carbonplace, is a global carbon credit transaction network that will enable the simple, secure, and transparent transfer of certified carbon credits. It has settled pilot trades of environmental credits in Australia, Brazil, Singapore, and the UK.

Carbon credits can help channel large-scale investments needed to fund carbon reduction and removal projects.

As per BloombergNEF, demand for carbon credits can grow ~40x in the next three decades. This is due to companies’ use of credits as part of their 2050 net zero emissions strategy.

Unfortunately, the business of trading the credits has been criticized because of some firms using low-quality carbon credits to offset their emissions. Plus, the voluntary carbon market (VCM) relies on bilateral trading that’s often slow, opaque, and risky. These reduce trust in the market.

This is where Carbonplace comes in. The platform will only settle trades of credits that are verified by top carbon registries, such as Verra and American Carbon Registry.

Carbonplace and How it Works

Carbonplace’s unique blockchain-enabled technology will significantly change how carbon credits are bought and sold. It works similarly to Xpansiv CBL carbon market platform, the most dominant player today.

The trading process of Carbonplace includes procedures dealing with money-laundering and anti-fraud regulations.

Backed by large banks with a global client base, Carbonplace will have the ability to connect the markets, registries and exchanges of the VCM directly to millions of customers in various markets as shown in the map.

The carbon credit network’s member banks or founding partners include:

National Australia Bank
Natwest Group Plc
Itaú Unibanco
Standard Chartered
BNP Paribas
Sumitomo Mitsui Banking Corporation (SMBC)

They all share a common ambition to support urgent, large-scale climate action. They recognize the need for strong collaboration between the financial sector and other carbon market participants to bring trust, transparency, and accessibility to the VCM.

As to how Carbonplace works, the product’s chief officer Robin Green said:

“Think of it like eBay… We are just broadening the access to the market by providing transparency and trust. It’s not that you can’t buy credits right now, but we are really simplifying the process.”

The network will deliver those essential elements of a growing VCM with these three values:

It’s simple. The Carbonplace Rulebook will see to it that all members of the platform follow a single set of prudential rules, which removes the need for bilateral contracts between buyers and sellers. This makes it possible to retire credits within minutes and reduce the burden of individual transactions.

It’s secure. The network’s robust KYC will deliver another level of security. It enables customers to rely on the banks they already trust for settlement purposes.

It’s transparent. Carbonplace’s full ledger, audit, and reporting functionality will manage the carbon credit lifecycle from inception until retirement. This provides reliable records of ownership of carbon credits and reduces the risks of double counting.

Where Two Worlds Meet: Carbon Markets and Banking

Carbonplace is a place where the emerging world of carbon markets meets the established world of banking. How that looks is like this.

The instant, secure, and traceable settlement of carbon credit transactions via a secure, distribution network is critical in scaling the VCM.

The pilot trades on the Carbonplace network involved selling carbon credits from Carbon Growth Partners in Melbourne and Sustainable Carbon in Sao Paulo to banks.

The post Xpansiv New Carbon Credit Rival “Carbonplace” to Launch Soon appeared first on Carbon Credits.

Canadian Investors Launch CAD$115 Million “Inlandsis II Fund”

Fondaction Asset Management (FAM), Priori-T Capital and partners launch one of the largest carbon funds with CAD$115 million to finance emissions reduction projects in North America – the Inlandsis II Fund.

The Fund will be managed by Fondaction’s new fund management platform, FAM, and its partners. The raised capital will be for projects that generate carbon credits both from compliance and voluntary carbon markets in North America.

Fondaction is the investment fund for those mobilizing capital for positive economic, social, and environmental outcomes. It manages net assets of over 3.11 billion dollars invested in the financial markets.

The COP15 is underway in Montréal as the launching happens. It’s another initiative in the financing sector that highlights the importance of pumping capital into climate change, biodiversity and nature conservation.

The Inlandsis II Fund’s $115 million capital is from 30+ investors, led by Fondaction, and includes these major ones:

Priori-T Capital,
Lucie and André Chagnon Foundation,
Sabius Private Institutional Mandate (Dalpé Wealth Partners),
Société Financière Bourgie,
HEC Montréal,
Horizon Capital Holdings,
Capital Benoit, and
Genus Capital Management.

The Inlandsis II Fund aims to reduce emissions by ~24 million tonnes over a 10-year period.

Fighting Climate Change, Protecting Nature & Biodiversity

Chairman of FAM and VP of Fondaction, Stéphan Morency said:

“In addition to financing corrective measures throughout industry to reduce GHG emissions, the Inlandsis II Fund will also deploy its capital on voluntary markets to ensure that efforts toward biodiversity and natural capital protection are more sustained as compared to its predecessor.”

Fighting climate change and protecting nature are closely related. That’s because nature gives us the solutions to lower our GHG emissions by sequestering carbon.

Forests are great carbon sinks, and if the trees are cut down, the capacity to store carbon is also lost. That doesn’t only impact climate change but also the local biodiversity. Thus, similar investments were meant to protect nature and tackle climate change.

According to Fondaction’s Deputy Chief Investment Officer “fighting climate change through forest preservation creates greater biodiversity, as forests often provide refuge to threatened species, but also more economic value for the forests and the communities that rely on them”.

Increasing Inlandsis II Fund’s Capitalization

Actions needed to reach the world’s 2050 net zero goals will require a huge amount of money. And so FAM and its partners expect another funding in the coming months. They anticipate that the Inlandsis II Fund’s capital will go up to $160 million.

Fondaction itself has invested a total of $54 million into the Fund, $24 million in Inlandsis I and $30 million in Inlandsis II. Commenting on the launch, CEO and co-founder of Priori-T Capital Jean-François Babin said:

“Inlandsis is one of the first investment funds worldwide to generate revenue with the carbon credits it makes available through the projects it supports. In addition to generating competitive returns for its investors, the Inlandsis Fund innovates by investing in several types of GHG reduction projects, including the reduction of methane emissions in agriculture and in abandoned coal mines.”

Priori-T Capital develops alternative investment solutions to fight climate change such as the Inlandsis Fund. It seeks to provide investors with opportunities that are carbon market-driven and open access to capital for a greener economy.

For the firm’s Chairman of the Board, launching Inlandsis II Fund gives them leverage in the impact financing ecosystem.

The Inlandsis Fund was established by Fondaction and Coop Carbone in 2017 and committed to harnessing markets to address climate change. It is the only Canadian fund, and one of the few worldwide, to exclusively finance carbon emission reductions.

The Fund provides a unique project financing solution that supplies initial capital in exchange for carbon credits — an innovation that’s vital to bringing carbon emission reduction projects to fruition. Here is Inlandsis Fund’s project map.

From Quebec to the Whole of North America

Carbon markets have grown a lot over the last 2 years as shown below. Thanks to the rising net zero pledges from large global companies. Most of these commitments include offsetting emissions by buying carbon credits.

The reason behind the carbon market growth is what inspires the creation of Inlandsis II Fund. The managing director of the Fund, David Moffat, said that the Inlandsis I Fund formed a pioneering center of climate finance expertise in Quebec.

Inlandsis I supports the following projects and initiatives:

Involvement in the area of agriculture
Installation of biodigesters on livestock farms
The capture of methane in abandoned mines and gas sites
CO2 sequestration through a large-scale forestry development
Permanent conservation of an old-growth forest

The Inlandsis II Fund further builds such expertise and significantly expands its impact to the entire North American markets.

The post Canadian Investors Launch CAD$115 Million “Inlandsis II Fund” appeared first on Carbon Credits.

Top 5 Carbon Sequestration Companies in 2023

The market for carbon sequestration has enjoyed an exponential growth in recent years, attracting vast interest from investors and governments. The main reason is that carbon sequestration technologies are not just beneficial to honoring our climate commitments, but crucial.

The Paris Agreement signed in 2016 set out an ambitious goal: to ensure that an increase in the average global temperature stays under 2C, ideally 1.5C. This means that we can only afford to emit 400 gigatons of carbon emissions to stay under this limit.

What countries around the world have discovered is that this goal is not achievable by implementing renewable technologies alone. The pace of developing renewable technologies cannot keep up with the rate at which the world is emitting carbon dioxide.

Hence, carbon sequestration and removal needs to scale up significantly to remove existing emissions and halting continuing carbon emissions.

Scientists estimated that the world has to remove up to 10 GtCO2 annually from the atmosphere by 2050 to decarbonize. That removal capacity should double per year by 2100 as shown in the chart below.

Source: IPCC Report

The current carbon removal and sequestration market explores a broad range of technologies. This includes capturing carbon dioxide using large fans, changing the pH of the ocean to store more CO2 to recycling carbon emissions in cement production.

Here are the top 5 carbon sequestration companies to watch for in 2023:

Aker Carbon Capture

Location: Norway, Northern Europe

Founded: 2020

A subsidiary of Aker Solutions, Aker Carbon Capture is one of the largest and most established of the carbon sequestration companies.

It is one of the few publicly traded companies in the sector. It was listed in the Oslo Stock Exchange in 2020, and has a current market cap value of $750.65 million.

The company uses their proprietary carbon capture solution to capture CO2 from waste flue gases from a variety of industries such as oil refineries and cement plants. Its key offerings include modular solutions that are easy to transport and install. They also offer offshore and integrated solutions.

Though it was only established in 2020, it uses technology that has been developed by Aker for over 10 years. One of their current key projects is the Brevik cement plant which has a CO2 sequestration capacity of 400,000 tons per annum.


Location: Switzerland

Founded: 2009

Climeworks is another established carbon sequestration company that uses direct air capture (DAC). The company recently raised $650 million in funding, the largest ever for a startup in the carbon removal sector.

It uses its modular CO2 collectors, where large industrial fans draw in CO2-containing air into the plant, and a CO2-selective filter separates the carbon dioxide.

So far, Climeworks has sold the collected CO2 to greenhouses and carbonated beverage companies. Recently, it has taken a step further and partnered with another carbon sequestration company called Carbfix to permanently store this CO2 instead of reselling it.

It launched its carbon capture and storage facility called Orca in 2021, in partnership with Carbfix. The facility has the capacity to capture around 4,000 tons of carbon per annum. To date, it is the only direct air capture plant that permanently sequesters the CO2 instead of recycling it.

Carbon Clean

Location: London, UK

Founded: 2009

To date, Carbon Clean has used its proprietary carbon capture process technology to sequester 588 metric tons of CO2. It has raised a total of $212 million in funding.

One of its key partnerships is the industrial-scale carbon capture and utilization plant in Chennai, India which has an annual capacity to capture 60,000 tons of CO2.

In 2021, the company launched its new solution, CycloneCC, which can achieve over 90% carbon capture rates. The company also prides itself on being cost-effective, as they claim they can capture CO2 for less than $30 per metric ton.


Location: Reykjavik, Iceland

Founded: 2006

Carbfix is a leading player in the carbon sequestration sector due to its novel carbon capture and storage technology. Carbfix’s technology aims to permanently store captured CO2 underground in rocks. Unlike other solutions in the sector, where the CO2 needs recycling, Carbfix offers a more permanent carbon sequestration solution.

Its key projects and partnerships with Climeworks are the aforementioned Orca plant and the EU-funded Arctic Fox pilot plant. To date, the company has raised $117 million in funding.

Carbon Engineering

Location: Vancouver, Canada

Founded: 2009

Carbon Engineering is another big name in the sector that has raised a total funding worth $110 million. Its unique liquid DAC process that uses potassium hydroxide solution to capture CO2 has earned trusts and investments from Bill Gates, Chevron, Occidental, Airbus, Air Canada, and more.

Carbon Engineering licensed its DAC technology to 1PointFive, aiming to build a megaton scale plant in the Permian Basin, U.S., capable of capturing 1 million tons of CO2/year in 2024.

What makes it stand out from other carbon sequestration companies is that apart from its DAC plants, it also has air-to-fuels plants that can deliver global-scale quantities of clean fuels using captured CO2. These facilities will be operational in 2026.

Carbon Sequestration Companies for Net Zero

Carbon capture or DAC plays an important role in meeting net zero emissions goals. In fact, the world needs the services of the carbon sequestration companies to bring the global energy system to net zero by 2050. Here’s the potential of these technologies in reaching net zero.

Estimations by the International Energy Agency showed that DAC can capture over 85 million tons of CO2 in 2030 and 980 million in 2050. But that needs a lot of work to do from those top carbon sequestration companies to help scale up the sector.

The good news is that the mega trend today indicates high regard for more investments in the space both from the public and private sectors. And through these carbon capture and removal technologies, businesses can meet and perhaps exceed their net zero targets.

The post Top 5 Carbon Sequestration Companies in 2023 appeared first on Carbon Credits.

Alaska to Earn Revenue from A New Source: Carbon Credits

Alaska is earning hundreds of millions of dollars every year through the sales of fossil fuels that contribute a lot to climate change, but it’s now looking to earn money by selling carbon credits.

Alaska only earned a few tens of millions of dollars in all the decades it has been selling timber. And the federal government has locked up the Tongass National Forest, drying up the timber industry in the state.

So, simply put, there were not enough forests to be commercially viable anymore.

Gov. Mike Dunleavy plans to raise money from a new source – carbon credits. For at least some of Alaska’s forested land that’s not harvestable. He said it will bring in hundreds of millions to a billion dollars of income each year.

A Bill on Carbon Sequestration

Carbon sequestration means capturing and storing carbon dioxide, preventing it from entering the atmosphere. It’s one of the commonly used methods in cutting down carbon emissions. It can be done using modern technologies or natural processes.
Gov. Dunleavy aims to introduce a bill to turn Alaska’s capacity to sequester carbon into a revenue stream. He said during a press briefing that:
“Alaska has a real opportunity to sequester carbon in many different ways in the state – through our forests, through our depleted oil and gas basins, as well as the potential for seaweed sequestration off our coasts.”
The governor also said that the state’s depleted basins are excellent carbon sinks. Cook Inlet, for instance, can store as much as 50 gigatons of carbon.
Can Alaska profit from this new business of carbon sequestration with carbon credits? The governor aims to know and he needs to pass a bill that will allow him to develop contracts.

He will propose to the Legislature a carbon credit program for forest lands, depleted oil basins, and even seaweed forests off of the Alaska coast.

The governor said this bill will be a starting point for how carbon sequestration would look in the state. It will also explore how the state can contract with potential credit buyers and what carbon sinks will be involved.

Alaska Forest and Blue Carbon Credits

Trees in forests sequester carbon from the air. This sequestration can generate income through carbon credits sold to entities wanting to offset their emissions.
Gov. Dunleavy disclosed that a firm has approached Alaska, saying that a carbon credit program can generate $30+ billion over 20 years. That’s if Alaska will leave some forests intact. It won’t prohibit other uses of the land like recreation, but the trees should not be cut in exchange for the billions.
Meredith Trainor, executive director for Southeast Alaska Conservation Council commented on this saying:
“From our perspective at SEACC, the easiest way to increase carbon sequestration in Alaska is to protect the Tongass National Forest. That’s not necessarily up to Gov. Dunleavy, but seeing the governor think more broadly about ways to protect forested areas over which the state does have influence would be critical...”
Some existing forest carbon projects were developed in the state several years ago. Developers such as Sealaska and Ahtna are a few of the Alaska Native organizations doing it.
But aside from forests, seaweeds can also be a carbon sequestration farm. Several initiatives were in place that used seaweeds to capture carbon and earn the so-called blue carbon credits.

Fast-growing seaweed like sargassum is an efficient carbon soaker, sequestering up to 20x more CO2 than a tree of the same volume.

Both of these carbon credits, from forests and seaweeds, will not “gore any ox”, according to Gov. Dunleavy. He said that Alaska now has a real possibility of earning revenue with carbon credits. With this, they don’t have to gore any ox (e.g., do an income or corporate taxes on the people).

Potential Carbon Credit Revenues

There was no revenue from carbon sequestration specified in the state’s proposed budget for 2023. But Dunleavy’s 10-year plan includes a target for potential revenue from carbon credits.
His plan projects the following carbon credit revenue generation:
$300 million in 2024
$500 million in 2025
$750 million in 2026
$900 million in subsequent years
Those figures, if they become a reality, will help balance out the finances the state needs to function. But some senators believe that such revenue will not come in that fast.
The bill will take careful analysis and discussion to become law. After all, if it turns into legislation, it can create an opportunity for ‘multigenerational contracts’ between the state of Alaska and the investors, as Senator Stedman said.

The post Alaska to Earn Revenue from A New Source: Carbon Credits appeared first on Carbon Credits.

Earthshot Prize 2022 Winners: Five Winners Announced

The Earthshot Prize awards ceremony for 2022 was recently held in the United States at the MGM Music Hall in Boston, naming five winners.

Each winner was awarded Earthshot prize funding of $1.2 million to develop their environmental solution. The winning participants were from Kenya, India, Oman, the UK, and Australia, with five categories available.

The five Earthshot Prize 2022 winners were selected for five categories, each representing a specific global environmental challenge. The five categories are:

Restoration and Protection of Nature,
Air Cleanliness,
Ocean Revival,
Waste-free Living, and
Climate Action.

These five categories were after the UN’s Sustainable Development Goals.

What is the Earthshot Prize?

The Moonshot challenge launched by President J.F. Kennedy in 1962 inspired the Earthshot Prize. The said challenge set out to reach the monumental goal of landing on the moon within 10 years.

Finding tangible solutions to looming environmental issues that will become critical in the next few years is the main objective of the Earthshot Prize.

Prince William and Sir David Attenborough launched the initiative in 2020 after two years of development, and the prize will run until 2030.

Five annual winners from 15 finalists, will each receive $1.2m in funding. The inaugural Earthshot prize awards ceremony was held in October 2021 at Alexandra Palace in the UK. 

The Earthshot Prize Council selected the winners, a thirteen-member council of global ambassadors in various fields of climate action and environmentalism. Some of the council members include Queen Rania of Jordan, Sir David Attenborough, Prince William, and Ngozi Okonjo-Iweala, the current Director-General of the World Trade Organization.

The Earthshot Prize 2022 Winners

The Earthshot prize winner for the ‘Protect and Restore Nature’ category was Kheyti. It’s an Indian startup that developed a ‘greenhouse-in-a-box’ solution to help smallholder farmers increase their yield. 

Mukuru Clean Stoves won the Clean Our Air prize award. They’re to develop clean and safe cooking stoves in Africa that do not emit harmful chemicals that cause respiratory issues.

The Revive Our Oceans category winner was the Indigenous Women of the Great Barrier Reef. It is an initiative led by the Indigenous women in Australia to protect critical ecosystems around the world.

The Build a Waste Free World Earthshot Prize winner 2022 was Notpla. The firm is a London-based startup that tackles the plastic waste issue by developing an eco-friendly seaweed-based alternative.

Finally, the Fix Our Climate part of the 2022 Earthshot Prize award went to 44.01, a novel carbon removal solution that permanently stores carbon dioxide by mineralizing it inside rocks. Permanent storage of carbon dioxide has been a critical issue in recent years as part of an effort to drastically reduce carbon dioxide from the atmosphere.

Some of the 2021 Earthshot Prize winners included the Indian-based Takachar, an agricultural waste recycling initiative, and Enapter’s green hydrogen solution, the AEM Electrolyser.

Meanwhile, the Earthshot Prize 2023 nominations are currently open. And the deadline for nominations is on the 31st of January 2023. Submissions can be made via the hundreds of global official nominators for the Earthshot Prize 2023.

The post Earthshot Prize 2022 Winners: Five Winners Announced appeared first on Carbon Credits.

Biodiversity Credits: A New Way of Funding Nature Protection

Biodiversity credits are the latest tool in the climate action arsenal and the United Nation says that these credits can succeed where carbon offsets fail or don’t apply. So, the organization is backing them up.

But as it’s quite a new concept within the mitigation hierarchy, many people are asking what is a biodiversity credit, why does it matter, and how to earn it.

Meanwhile, others are also wondering how biodiversity offsets work and how they differ from biodiversity credits. If you also have the same queries in mind, this guide will give you the answers and more.

What is a Biodiversity Credit?

First things first – let’s talk about what a biodiversity credit is.

From polar bears to plankton, the breadth and variety of life and ecosystems on earth, or what we call biodiversity, is declining faster than at any other time in human history. This poses a threat not only to the planet but also to humans, the financial systems, while hastening the pace of global warming.

The World Economic Forum estimates that about half of global GDP, or around $44 trillion in figures, depends on the natural world in major ways. That means its degradation also carries a great toll on the global economies.

The world’s 7.6 billion people represent only 0.01% of all living things by weight, but humans have caused the loss of 83% of all wild mammals and half of all plants.

What causes this huge loss?

Same with climate change, human activities are eroding biodiversity and here’s how bad it looks.

Source: IPBES, “Global Assessment Report on Biodiversity and Ecosystem Services”, 2020

So protecting biodiversity is not only good for natural ecosystems, but also for the people that inhabit them. But there’s a huge financing gap to preserve and protect nature – that’s worth $700 billion annually.

And one mechanism that individuals and firms created to plug in the gap and reverse the loss is the biodiversity credits. Through these credits, entities can invest in environmental projects that contribute to a richer biodiversity.

Concept defined: A biodiversity credit is a legal document that represents the environmental action made, where it took place, who developed it, under what methodologies, and that has been certified following a specific system.

Biodiversity credits, or the so-called biocredits, are measurable, traceable, and tradeable units of biodiversity. They are instruments that offer a solution to financing conservation and restoration of nature.

Interest in biodiversity credits is “at a high level” and asset managers have also shown high regard to them. There are good reasons why investors are willing to pour billions of dollars into biocredits.

Biodiversity brings great benefits.

What Benefits Does Biodiversity Offer?

Biodiversity is crucial for health and food security

Biodiversity underpins global nutrition and food security as millions of species work together to provide humans with various fruits, vegetables, and animal products. All these are essential to a healthy and balanced diet but are now under threat.

As a result, of the world suffers from micronutrient deficiencies.

Plus, there has been reduced resiliency in supply chains and what we put on our plates. For instance, the number of rice varieties cultivated in Asia has fallen from tens of thousands to only a few dozen. Likewise, in Thailand, 50% of land used for cultivating rice only produces two varieties.

Obviously, conservation of diverse species is critical for our health as well as feeding humanity.

Biodiversity helps combat disease

As humans encroach upon the natural ecosystems, we also reduce the size and number of species living in them. As such, animals live in close quarters with humans which create ideal conditions for the spread of diseases.

About 60% of infectious diseases are from animals. In other words, higher biodiversity rates are associated with better human health.

One obvious reason is that plants are essential ingredients for medicines; 75% of cancer drugs are natural or inspired by nature. So each time a species goes extinct, we’re also missing out on a chance for making new medicines.

Biodiversity benefits businesses

According to the WEF’s report, more than half of the world’s GDP is highly dependent on nature. Take for instance the case of pharmaceuticals – about $75 billion/year of its sales are based on materials of natural origin.

Companies in the food and tourism sectors are also dependent on nature. What this means is that businesses are at risk because of increasing biodiversity loss.

On the contrary, each dollar spent on restoring nature results in about $9 of economic benefits. It also helps avoid trillions of dollars’ cost of social and environmental damages.

Biodiversity brings more livelihoods

Estimates show that around $125 trillion of value comes from natural ecosystems each year. In fact, 3 out of 4 jobs involve water while agriculture employs ~60% of the working poor.

Plus, forests are the main source of livelihood for more than 1 billion people in the Global South.

We must, therefore, protect and restore biodiversity – not only for the good of nature but more so for the people whose livelihoods depend on it.

Why do Biodiversity Credits Matter?

Those four benefits of restoring ecology are good enough reasons to invest in biodiversity. But why do biodiversity credits matter, apart from the strong economic incentives involve?

The key driver behind market driven instruments for biodiversity restoration efforts is that their impacts can be measured and represented in credits. It simply means that they can be integrated into economic decision making.

In a business perspective, the owners can improve their reputation towards customers if they wish to voluntarily support projects that restore or conserve nature.

In the same way, landowners can gain profits from protecting or restoring a habitat. They can also provide more ecological protection than they would have done without the credits as compensation for their efforts.

An executive director’s statement may perhaps sum it all up – the importance of biodiversity credits. He said that “Biocredits offer a tangible solution to the challenge of how to finance the conservation and restoration of nature”.

That’s because the credits can meaningfully channel funds to communities that are the most effective stewards of biodiversity.

More importantly, biocredits can help bend the biodiversity loss curve as shown in the chart below.

Ambitious conservation efforts – in yellow line – are vital to bend the curve at the critical time requires (before 2050). But conservation actions plus sustainable production and consumption should go together for the world to succeed.

So where does the concept of biodiversity offset blends in? How does it work?

How Does Biodiversity Offset Work?

Biodiversity offsets work somehow similar to carbon offsets. They’re based on a premise that impacts from development can be compensated for if sufficient habitat can be protected, enhanced or established elsewhere. Project development can be in the form of land exploitation for building, mining, or any other activities that have negative impacts on nature.

Biodiversity offsets measurable conservation outcomes designed to compensate for material, residual biodiversity loss after reasonable prevention and mitigation steps have been done. And the need for equivalent ecosystems explains why biodiversity offsets are often entirely local.

The goal of biodiversity offset is to gain ‘no net loss’ of biodiversity.

An offset site is a place where vegetation and species habitat are protected and improved. Protection can be done in various means like fencing, weed and pest control, and planting native species.

The aim of biodiversity offsets is to let development happen in an ecologically sustainable manner, making sure it doesn’t have undesirable effects on ecosystems and species inhabiting them.

Biodiversity offsetting also provides an incentive to protect ecosystems on private land, provides an income for landholders, and achieves biodiversity conservation outcomes into the future.

Biodiversity offsets vs. credits

Offsets are economic instruments based on the “polluter pays approach”. They seek to factor in the external costs of biodiversity loss from development projects by quantifying the cost of activities that damage biodiversity.

Biodiversity offsets are often a legal requirement to get, for example, an exploitation permit by a state agency.

Biodiversity credits, on the other hand, are not a legal obligation owed by an entity. They are an instrument used to finance initiatives that result in measurable positive outcomes for biodiversity – be it the species or natural habitats – via the creation and sale of biodiversity units.

Biodiversity offsets and credits may seem to be similar in design. But what makes them different from each other is the intention of the purchase and the claims made around it.

Biodiversity credits are part of a company’s nature-positive journey. In other words, they are an investment in nature’s recovery, not an offset for any damage done.

Biodiversity Credits in Practice

There are some initiatives underway that design biodiversity credits to test the waters for them. New Zealand, Colombia, and Australia are popular examples.

1. New Zealand: “sustainable development units”

In July 2022, New Zealand launched its new biocredits product facilitated by Ekos with funding support from Trust Waikato, the Wel Energy Trust and the D.V. Bryant Trust.

These credits are called “sustainable development units” bought by a supply chain business (Profile Group Limited). They fund the conservation management of 83 hectares at Sanctuary Mountain Maungatautari. The biocredits are not offsets and were issued for short-term biodiversity outcomes.

2. Colombia: “voluntary biodiversity credits”

Colombia introduced its new biodiversity credits last May 2022 created by ClimateTrade and Terrasos. These biocredits are called “voluntary biodiversity credits” (VBCs) first issued by the Bosque de Niebla-El Globo Habitat Bank.

Each VBC, priced at $30, corresponds to 30 years of conservation and/or restoration of 10 square meters of the Bosque de Niebla forest. It’s a cloud forest home to a number of threatened species

3. Australia: “EcoAustralia credits”

In 2018, Australia introduced its unique EcoAustralia credits by developer South Pole. Unlike other biocredits, each EcoAustralia credit is a combination of one “Australian biodiversity unit” (ABU) and one carbon credit (issued by Gold Standard).

Each ABU represents 1.5 square meters of habitat protection.

An example of a project that issues ABUs is the Mount Sandy project. It protects a rare pocket of native vegetation in South Australia’s Coorong region under the care of the Ngarrindjeri people.

Buyers of EcoAustralia credits are Porsche Australia, the University of Melbourne, and CareSuper.

These examples show that biodiversity credits are very recent but they’re real. And you can expect that they will be the talk of the town soon just like how carbon credits became the craze.

So, if you’re interested to know how you earn biodiversity credits, let’s move into that.

How Do You Earn Biodiversity Credits?

A key concept you need to grasp if you want to learn how to get biocredits is biodiversity stewardship.

Concept defined: Biodiversity stewardship is an approach to enter into agreements with private and communal landowners to manage and protect land in biodiversity areas.

As a landholder, you must establish a biodiversity stewardship site on your land first then generate the credits to sell to those who need them.

Here are the four major steps to follow to earn and sell biodiversity credits. Australia is, by far, has the most experience in this space, being in the industry for four years now.

Step 1: Determine if you meet the eligibility criteria

The first thing you need is to establish that your land meets the eligibility criteria to be issued with biocredits. At this stage, you can solicit advice from an accredited assessor. They will identify the likely types of credits that will be generated on your site.

Before you formally apply, you may also want to advertise your site on the corresponding register to identify potential buyers of biocredits.

Step 2: An accredited assessor applies the Biodiversity Assessment Method

The accredited assessor will apply the Biodiversity Assessment Method (BAM) to your site and produce a Biodiversity Stewardship Site Assessment Report. It contains the type and number of biodiversity credits generated by having a Biodiversity Stewardship Agreement (BSA) on your site.

The BSA also outlines the proposed management plan for your site. These documents are then submitted to the responsible body.

Step 3: Enter into a Biodiversity Stewardship Agreement to sells the credits

After the relevant body assesses your application against the requirements and agrees on the terms of the BSA, the credits will be registered on the relevant registers, and on the title of your land.

You can then sell the biodiversity credits and the sale will be recorded in the public register of credit transactions.

Step 4: You receive payments and manage your biodiversity stewardship site

Once you receive your first annual management payment, your site turns into an ‘active management’. This means you must start actively managing the site as per the agreed management plan.

After the period of the BSA expires, you can re-apply to renew the active management plan or continue to receive payments to maintain the BSA site.

Biodiversity Credits: Role in Relation to Carbon Markets

Biodiversity protection and restoration is one of the key topics at COP27 in Egypt this year. Apart from the tragedy of flora and fauna species going extinct, this massive loss also hinders efforts to fight climate change.

That’s because natural ecosystems like forests, oceans, and peatlands are great carbon sinks. So losing them means the planet is also losing the chance to stop global warming.

In that sense, biocredits are closely related to carbon credits.

For instance, to make the REDD+ programs work, you need to show an imminent threat for the forest to generate carbon credits. And if no such threat exists, the projects can still offer other benefits to the communities such as livelihoods.

But that may lead to some difficulties in accessing the necessary carbon finance. This is where biodiversity credits come in to rescue and fill the gap. When it comes to where the demand for these credits come from, education and regulation will be the key drivers at this early stage.

But Verra itself has started to develop a framework around biodiversity credits to ensure that they can complement the carbon market.

As to when the biodiversity credits will hit the same maturity of the carbon market right now, others predict it will not be later than four years. Some say it depends. Depends on what?

Education. Regulation. Market dynamics. And having the right metrics and mechanisms that will allow investors to bet their money on protecting nature, with confidence.

The post Biodiversity Credits: A New Way of Funding Nature Protection appeared first on Carbon Credits.

Bezos Earth Fund Offers $110M Grants as Climate Commitment

The Bezos Earth Fund announced grants amounting to $110 million as part of its $10 billion commitment to drive climate and nature solutions while advancing environmental justice.

The Bezos Earth Fund, founded in 2020, is Jeff Bezos’ commitment to fund entities and individuals who can deliver solutions to fight climate change and help restore and conserve nature. The $10 billion funds will be zeroed out by 2030, the same deadline for achieving the UN SDGs.

Bezos has been criticized for the amount of carbon that Amazon emits. The retail giant has pumped millions of tons of carbon into the air each year, totaling to over 71 million metric tons as of 2021. Personally, Bezos is trying to reverse that through the Fund.

Last year, Bezos pledged $2 billion towards environmental conservation. The goal is to protect 30% of the Earth’s land and sea by 2030.

Bezos Earth Fund Climate Commitment

The current $110 million funding will be for restoration efforts in Africa and the United States as well as advance climate science, monitoring, and governance in carbon markets.

Restoration Efforts in the U.S.

Restoring deforested and degraded land is one of the most cost-effective climate change solutions.

Recognizing this, Bezos Earth Fund grants the National Fish and Wildlife Foundation with $30 million. The aim is to restore 1.25 million acres of land and forests in the Northern Great Plains and the longleaf pine ecosystem in the American South.

Restoration efforts at this scale can capture carbon and protect biodiversity, particularly in the most significant but damaged ecosystems in the U.S. Community leaders will be the one to design and execute restoration in those areas.

The African Forest Landscape Restoration Initiative

The Fund also awarded another $50 million to AFR100, a local restoration initiative in Africa. It seeks to restore 100 million hectares of deforested and degraded landscapes by 2030. $27.2 million of that funding is given to One Tree Planted, One Acre Fund, World Resources Institute and Realize Impact for restoring the Greater Rusizi Basin and Great Rift Valley.

The Greater Rusizi Basin is known as the ‘lungs of the world’ while the Greater Rift Valley provides habitat for critical forests in Kenya.

Kenya’s Great Rift Valley

The fund from Bezos will serve as grants and loans to projects that restore the land in the region. It will also support initiatives that provide training and monitoring to help scale up those projects. Commenting on this, Vice Chair of the Bezos Earth Fund Lauren Sánchez said:

“Locally-led initiatives can help us fight climate change and protect biodiversity globally, and we are proud to work with partners on the ground to advance these efforts.”

Meanwhile, the Fund’s CEO and President also remarked:

“Local groups are central to achieving global restoration goals. By supporting the African Forest Landscape Restoration Initiative, the Bezos Earth Fund is working to remove three critical barriers to locally led restoration…”

Those barriers include:

Building capacity and drawing on the existing expertise in the region to help restoration projects scale
Ensuring that finance reaches frontline groups
Ensuring that best-in-class monitoring systems are in place to track progress on the ground

Advancing Climate Science, Promoting Integrity in Carbon Markets, & Improving Governance

With a $10 million commitment, Bezos Earth Fund works with the experts in climate science to give real-time attribution of specific extreme weather events. Examples are fires, droughts, and hurricanes happening in the U.S., the UK, and India.

Carbon markets play a vital role in addressing climate change. They can drive hundreds of millions of dollars to climate solutions. But high standards and strict rules are key to success.

Without them, low-quality carbon credits and unfounded greenwash claims can undermine the market’s potential to deliver billions of tons of emission reductions and removals.

This is where the Fund comes in to help address market governance and credits quality. A $11 million funding goes to initiatives that provide a label for high-quality carbon credits. Example is that of The Integrity Council for the Voluntary Carbon Market that helps buyers find high-quality credits.

Grants for those kinds of initiatives will be to instill trust in carbon credits.

And since the public sector also has a big role to take on climate action, the Bezos Earth Fund is also giving a $2.3 million grant to train public officials. The Fund partners with the Government Climate Campus, an initiative looking to close the gap in climate skills and knowledge among key government officials.

Together they will train the first 5,000 officials in the U.S., Brazil, and India across government levels. By 2025, the number will go up to 50,000 public leaders trained to reduce emissions by 50% within the decade.

In summary, here’s the list of the grants awarded by the Bezos Earth Fund:

The post Bezos Earth Fund Offers $110M Grants as Climate Commitment appeared first on Carbon Credits.

U.S. DOE Invests $3.7 Billion in Carbon Removal Technologies

The U.S. Department of Energy (DOE) announced the launch of four programs funded with $3.7 billion to help build a commercially viable carbon dioxide removal industry in the country.

The funding comes from President Biden’s Bipartisan Infrastructure Law. The goals of the programs are to:

ramp up private-sector investment,
spur advancements in monitoring and reporting practices for carbon management technologies, and
provide grants to state and local governments to buy and use products made from captured carbon emissions.

DOE, the Bipartisan Infrastructure Law, & Carbon Removal

There are efforts currently done to reduce carbon emissions. But they’re not enough to bring the nation to its net zero target by 2050.

Thus, large-scale deployment of carbon removal technologies is crucial to tackle the climate crisis and meet decarbonization goals.

According to Secretary of Energy Jennifer M. Granholm:

“President Biden’s Bipartisan Infrastructure Law provides the transformative investments needed to scale up the commercial use of technologies that can remove or capture CO2… which will bring jobs to our regions across the country and deliver a healthier environment for all Americans.”

Carbon dioxide removal is a critical tool for cleaning up legacy carbon pollution that is already causing significant climate-related damages like intense floods, storms, and wildfires.

In addition, President Biden’s Inflation Reduction Act (IRA) also brings substantial improvements to Section 45Q tax credit for carbon capture and storage.

As per DOE’s estimates, actions both under the IRA and the Bipartisan Infrastructure Law will lead to 40% emissions reduction against 2005 levels across the economy.

The Department’s efforts will bring benefits to communities across the United States. Here are its new carbon removal programs under the Bipartisan Infrastructure Law worth $3.7 billion.

Direct Air Capture (DAC) Commercial and Pre-Commercial Prize

The Office of Fossil Energy and Carbon Management (FECM) is responsible for the $115 million Direct Air Capture Prize awards to bolster different approaches to DAC.

The DAC Pre-Commercial Prize provides up to $15 million in prizes to boost research and development of breakthrough DAC technologies. While the DAC Commercial Prize provides $100 million in prizes to qualified DAC facilities for capturing CO2 from the air.

Regional DAC Hubs

The Office of Clean Energy Demonstrations (OCED), in tandem with FECM, takes charge of the Regional DAC Hubs program. This is where the biggest investment from DOE goes – $3.5 billion.

The goal is to develop 4 domestic regional direct air capture hubs.

Each of them has to show a DAC technology or suite of technologies at commercial scale with the ability to capture at least 1 million metric tons of CO2 each year from the atmosphere. Then they have to show that they can store that CO2 permanently or convert it into products.

The first funding opportunity announced under this program is worth over $1.2 billion. It will be for conceptualizing, designing, planning, constructing, and operating DAC hubs. More opportunities are expected to follow in the coming years.

Carbon Utilization Procurement Grants

FECM will manage this program, which will provide grants to states, local governments, and public utilities to support the commercialization of technologies that reduce carbon emissions. The same goes for acquiring and using products made from captured carbon.

The first funding issuance will provide grants amounting to $100 million.

Bipartisan Infrastructure Law Technology Commercialization Fund (TCF)

This last program is under DOE’s Office of Technology Transitions (OTT), in tandem with FECM. It will issue a Lab Call to enhance commercialization of carbon dioxide removal technologies such as DAC. The office will do that by advancing measurement, reporting, and verification best practices and capabilities.

OTT will award $15 million to projects led by DOE and supported by industry partners from the emerging carbon dioxide removal sector.

Boosting Innovations in Carbon Removal

DOE launched an initiative called Carbon Negative Shot. The four programs above support the initiative’s goals, looking for innovation in carbon removal pathways that will capture CO2 and store it at gigaton scales for below $100/net metric ton of CO2-equivalent.

They also link with the Carbon Dioxide Removal Launchpad, a coalition of countries committed to leveraging collective resources and best practices to boost innovation and cost reductions across a portfolio of carbon removal technologies.

The coalition members, including the U.S., agree to achieve the following goals:

have at least one 1,000+ ton/year carbon removal project by 2025,
contribute to total investment of $100 million by 2025 to support demonstration projects, and
support efforts to advance robust measurement, reporting, and verification.

Since January this year, DOE has invested ~$250 million in R&D projects and front-end engineering design studies to advance carbon management approaches, including carbon dioxide removal and utilization projects.

The post U.S. DOE Invests $3.7 Billion in Carbon Removal Technologies appeared first on Carbon Credits.

COP15 Talks: Can Biodiversity Credit Gives Value on Nature?

The UN Biodiversity Conference (COP15) in Montreal seeks to reverse nature loss and restore biodiversity, but some groups suggested payments for this huge task with “biodiversity credit”.

According to a UN report, the world needs over $384 billion a year by 2025 to protect nature. That goes up to $674 billion by 2050. Biodiversity credits play a critical role to fill that money up.

The Concept of Biodiversity Credit

Biodiversity credits are patterned after the concept of carbon credits. Each carbon credit represents a 1 tonne reduction of carbon emissions.

However, things are more complicated with preserving or restoring biodiversity. There are plenty of metrics involved to track progress. So analysts can’t agree on many things.

For instance, what these credits must look like and how to use them. Some even say that the scheme may go wrong if it allows firms to buy credits as permits for degradation elsewhere.

As the debate continues during the summit, many questions remain on the table.

The hardest one to address is how to value biodiversity uniformly. There are simply millions of diverse species of flora and fauna. Plus, the biodiversity in each area is unique.

So, how should the market price the value of fungi living in a forest? Or the variety of plant species under the ocean?

No Unified Approach to Quantify Biodiversity Gains

Some organizations, including businesses and academics, believe that biodiversity credits can drive financing toward nature conservation. They have some proposals for different methodologies.

With nature’s complexity, various methodologies may exist, according to a founder of a biodiversity credit firm. For example, a well-preserved natural habitat may have to quantify only conservation costs. But an area that needs restoration may have to also measure increases in species richness.

Some don’t even propose to track the flora or fauna. They instead value efforts such as hiring rangers or implementing monitoring systems to avoid deforestation.

But there’s one approach that aims to measure and value biodiversity gains. Wallacea Trust, a UK non-profit, monitors at least 5 animal categories in an area. Each of them is valued based on how rare the species are in the country, and their abundance is estimated.

For every 1% increase in species abundance/richness or prevented loss per hectare, one biodiversity credit is generated.

Implementing Voluntary Market for Biodiversity Credits

The big question remains on why companies should buy biodiversity credits with a lot of queries around them.

In Australia, the government makes it compulsory for companies to buy biodiversity credits to offset damage caused in one area and fund preservation in another. This may be the case with EU firms with new rules forcing them to disclose impacts on nature.

But some industry groups oppose the idea of the credits letting businesses offset destruction elsewhere.

However, negotiators at the COP15 summit focus their talks on the potential voluntary markets in the private sector. They’re not after the compliance markets where biodiversity credits trading is mandatory.

The draft of the COP15 discussion also hinted at the promotion of a related scheme “biodiversity offsets”.

Outside the summit, the World Economic Forum (WEF) and the Biodiversity Credit Alliance are discussing how to set up a voluntary market. They plan to launch it next year with a system that ensures the credits deliver their conservation claims.

Having a high standard in place is critical as a policy officer from a carbon credit platform noted:

“When you can point to many examples in a market of low quality or low standards, it creates distrust and it impacts the integrity of the overall market…”

Other experts caution that biodiversity credits will allow companies to “greenwash,” or make false claims of conserving nature.

But it’s worth emphasizing that biodiversity credits do not replace governments with strict laws prohibiting nature’s degradation. According to Pollination’s CEO, Martijn Wilder, governments must compel companies to invest in biodiversity.

Verra, one of the world’s largest registry of carbon credits, said it will reveal its own standard for biodiversity credits in 2023.

The post COP15 Talks: Can Biodiversity Credit Gives Value on Nature? appeared first on Carbon Credits.