A direct air capture company, Heirloom, has entered into an agreement with a decarbonization tech developer, Leilac, where the latter’s kiln tech will be integrated in Heirloom’s DAC solution.  

The partnership between the two companies will combine the leading climate tech, providing an innovative, highly efficient and scalable solution to removing carbon through Direct Air Capture or DAC. The Memorandum of Understanding they signed is a collaboration agreement ready for execution in the coming weeks. 

Shashank Samala, CEO of Heirloom, remarked:

“We’re incredibly excited about incorporating Leilac’s world-leading electric kiln technology into our Direct Air Capture facilities because it will accelerate our efforts to capture 1 billion tons of CO2 from the atmosphere by 2035 owing to its highly modular and energy-efficient design.”

Also commenting on the partnership, Leilac CEO Daniel Rennie said:

“Heirloom and Leilac are well matched… Heirloom uses low-cost and abundant limestone, which Leilac’s technology is specifically designed for. Both technologies are modular, easily scalable and can be renewably powered.”

Heirloom’s Direct Air Capture Tech

Heirloom offers a direct air capture solution which is basically speeding up a process that already happens naturally. The company is using a powder made from crushed limestone, a rock that forms using carbon dioxide. 

In nature, this carbon mineralization process takes millions of years, but Heirloom’s DAC tech does it in only three days. They are mixing the powder with water, which then acts like a sponge that absorbs CO2 quickly.

The captured CO2 can then be safely and permanently stored for a long period of time. With such technology, Heirloom is developing the fastest path to low-cost, permanent CO2 removal with limestone. 

With a cost of about US$10-$50/tonne, limestone is inexpensive and easy to source. Combined with a highly-modular and easy-to-manufacture facility, Heirloom’s DAC solution won over the Musk-funded XPRIZE Carbon Removal competition last year. 

Heirloom, whose investors include Bill Gates-backed Breakthrough Energy Ventures, Microsoft, and current Leilac shareholder Carbon Direct Capital Management, aims to remove 1 billion tons of CO2 by 2035.

So, Why DAC?

Decarbonizing all sectors is critical to meeting global net zero goals by 2050. But to achieve that, decarbonization economy-wide won’t be enough. The world also has to address the CO2 already dumped in the air. 

Climate experts project that carbon removal of about 1 to 10 billion tonnes each year can help tackle residual emissions. More importantly, it can help reach net negative emissions and bring down global temperatures to 1.5°C.

Modular, scalable and low cost direct air capture tech that Heirloom provides, alongside geological carbon storage, offers a way to remove CO2 at the gigatonne scale.

So, where does Leilac’s decarbonization tech fit in? 

Leilac’s Industrial Decarbonization Tech

The reformed limestone courtesy of Heirloom’s DAC will be fed into a Leilac kiln. The kiln will separate the CO2 from limestone using exclusively renewable energy sources. 

All the CO2 captured from the air then mineralizes, either by binding it with rocks or other materials. Or it can also be stored away deep underground where it can’t escape back into the atmosphere.

This calcination tech by Leilac uses a unique indirect heating system that doesn’t need additional chemicals or processes. It keeps the process CO2 emissions pure, eliminating the need to separate gases from gases. 

As such, it makes a perfect match for limestone-based direct air capture of Heirloom.

Leilac’s decarbonization tech was developed for, and in partnership with, the cement and lime industries. It provides an efficient solution for abating and separating unavoidable process emissions in producing cement and lime.

This technology proves successful at pilot scale, such as through its pilot plant, Leilac-1, as well as its three smaller electric units. Leilac-1 began operating in 2019 with a capture capacity of 25,000 tonnes of CO2/year. It’s the biggest carbon capture installation for cement outside China. 

Leilac-2, shown above, is a demo plant capable of capturing 100,000 tonnes of CO2/year is due to open next year. 

Full-scale installations of Leilac’s tech at cement plants with CO2 capture capacities of ~1 million tpa of CO2 are under study. Right now, Leilac’s CO2 capture capacity is more than 2x the current combined capacity of all DAC facilities worldwide. 

Heirloom and Leilac’s Combined DAC Approach

The direct air capture tech of Heirloom uses lime through a novel carbonation process. The addition of Leilac’s kiln tech will further hasten the CO2 removal solutions for industrial emissions. 

The integrated Heirloom and Leilac DAC solution will run 100% using renewables and clean fuels to deliver the maximum net carbon reduction. Their partnership leverages eight years of significant investment to advance the DAC industry. 

As how Rennie puts it:

“The collaborative and cooperative approach outlined in this agreement [MOU] aims to accelerate the learning, synergies and steps to scaling that are needed to achieve our global climate ambitions and commitments.”

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MIT researchers developed a way of capturing carbon dioxide from seawater, not air, using less energy and at cheaper cost than direct air capture but with some more environmental benefits. 

The oceans are large carbon sinks, storing huge amounts of CO2. Sucking out that CO2 sounds odd but the MIT team says it’s a good alternative to DAC when it comes to energy use and costs.

The system can also work with ships that would process water as they travel to help mitigate the big contribution of ship traffic to global emissions.

Varanasi, a professor of mechanical engineering, remarked that:

“There are already international mandates to lower shipping’s emissions and this could help shipping companies offset some of their emissions, and turn ships into ocean scrubbers.”

The No.1 Carbon Sink

The most efficient DAC technologies need about 6.6 gigajoules (gJ) of energy, the International Energy Agency says. That’s around 1.83 megawatt-hours/ton of captured CO2. 

Unfortunately, most of that energy is not used to directly separate the CO2 from the air. It’s consumed by the heat energy to keep the absorbers at the right operating temperatures. Or it’s used for the energy needed to compress large amounts of air to the level required for an efficient carbon capture process.

Regardless of where the energy goes, the costs of getting a DAC facility to run remain high. Price estimates by the end of the decade per ton of CO2 is at around US$300-$1,000. 

Currently, there’s no country that is taxing polluters for even just $150. The highest, so far, is Uruguay with $137/ton of CO2. 

Without lowering the cost of operating DAC, it will be hard to commercialize it. 

Good thing there’s the oceans – the number one carbon sink. They store 50x more CO2 than the atmosphere and 20x more than land plants and soil combined. 

In a biological process as seen below, when atmospheric carbon concentration rises, CO2 starts to dissolve into seawater. Then marine ecosystems, especially the planktons, do their part in breaking down or changing CO2 into other forms they need to function.

The oceans are soaking up between 30% – 40% of all annual carbon emissions by humans. They do that by keeping a constant free exchange with the air. 

Get the carbon out of the seawater and it will suck more out of the air to re-balance the concentrations for marine life to continue thriving. And the best part, the CO2 concentration in seawater is more than 100x greater than in air.

How the MIT Tech will Capture Carbon from Seawater

There have been previous studies and attempts to suck carbon out of the oceans and capture it. But they require the use of chemicals and expensive membranes to do it. 

But the MIT researchers claim that they were able to develop and test a system that’s not using any of those requirements. Their seawater carbon capture tech also uses less energy than air capture methods. 

Left: schematic of the device. Middle: optimizing the current density and electrode gap. Right: cost breakdown of the highly efficient electrochemical cell. Source: MIT

As shown above, the seawater passes through two chambers in the MIT system (left image). 

The first chamber is using reactive electrodes to release protons into the oceans. These protons acidify seawater which turns dissolved inorganic bicarbonates into CO2. The gas then bubbles out and goes to a vacuum. 

The water moves to the second chamber which calls the protons back in, bringing back the acidic water to its previous alkaline state. Then the water goes back into the sea without the CO2 gas. 

In the event that the electrodes run out of protons, the polarity of the voltage is simply reversed. The same reaction happens only with water flowing in the opposite direction due to the reversal. 

The team’s peer-reviewed paper is open access in the journal Energy & Environmental Science. They said that their seawater carbon capture system calls for only 122 kJ/mol of energy. Or that’s equal to only about 0.77 mWh per ton. 

The MIT researchers think that their method can do better, stating:

“Though our base energy consumption of 122 kJ/mol-CO2 is a record-low… it may still be substantially decreased towards the thermodynamic limit of 32 kJ/mol-CO2.”

Speaking about costs, they estimate an optimal cost of only $56/ton of CO2 captured. But they noted that it should not be compared directly with the costs of running a fully operational DAC.

That figure doesn’t include other possible costs such as vacuum degassing, filtration, and other costs outside the electrochemical system. Still, some of those unaccounted costs can be covered by integrating the seawater carbon capture units with other facilities.

Desalination plants, for instance, are a good example as depicted in the picture. They’re processing high volumes of seawater already.

Other Benefits of the MIT System

Apart from enabling the oceans to draw down more carbon from the air, the MIT CO2 capture method brings other benefits, too. 

Increased carbon concentrations in oceans led to acidification of seawater. This, in turn, threatens the life of shellfish, coral reefs, and other marine beings. 

Plus, the alkaline seawater as the output of the process can help put back the balance in marine ecosystems. 

While this seawater carbon capture tech shows a great potential, there are many things yet to be perfected. The team plans to show a practical project demonstration within the next 2 years. 

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If you’re looking for new ways to make your farm profitable, generating carbon credits from farming has been the go-to solution that farmers opt for.

That’s not surprising given that carbon farming enhances the organic matter content in the soil, minimizes costs, and gives extra income through carbon credits. Not to mention that it may also give farmers access to better financial incentives from banks or institutional investors.

With growing demand from businesses to buy carbon credits from farmers, it is now clear why carbon farming will be the future of agriculture. But some farmers are still in the dark when it comes to agricultural carbon credits.

And so the purpose of this article is to help clarify things by explaining how carbon credits in farming works, why it matters, and what are the key considerations you should make.

How Does Carbon Credits in Farming Work?

But first things first, let’s define what a carbon credit is.

The idea behind carbon credits is that entities responsible for emitting CO2 have to reduce their emissions or pay for the efforts of farmers or others who are doing the work of removing CO2 from the air. The payment is in the form of a carbon credit, with each credit representing one metric ton of carbon reduced or removed.

Crops, grasses and other plants sequester CO2 from the air but they also release it when they decompose. Still, with proper soil carbon capture and farming practices, they can draw down CO2 very well.

Here is how soil captures CO2 in a natural carbon sequestration cycle.

The length of time carbon stays in the soil before going back to the air varies. It depends on several factors such as climate and soil composition.

For example, disrupting the soil structure like converting forestland or grassland to farmland, can speed up the release of the captured carbon.

On the other hand, carbon farming methods like no-till farming and planting cover crops can slow down carbon loss. They can even help increase carbon levels in soil.

Studies show that the past 200 years of agriculture emitted ~100 billion metric tons of CO2 (GtCO2). That’s far way over 3x as much carbon as all human activities released in 2019 – 43.1 GtCO2.

So, where do carbon credits come in?

Carbon credits in farming operate like crops in some ways.

For instance, if you produce soy to sell, the buyer will want to know its quality first. They will weigh your soy and test it for quality before buying it. And only by providing the buyers with important information can you convince them to buy your product.

In the same manner, carbon credits measure and monitor the quantity of carbon sequestered in the farm’s soil and the amount of carbon emissions reduced.

Some farming practices such as regenerative farming give farmers the potential to turn their farms’ ability to sequester carbon into cash with carbon credits.

Specifically, carbon credits are created based on the amount of carbon sequestered by the soil and so represents the emissions reduced above the soil.

Why Do Farming Carbon Credits Matter?

Farmers and ranchers have many opportunities to reduce their own carbon footprint. But in order to meet the global net zero target, 22% of land needs to shift from traditional agricultural production to long-term carbon sequestration or carbon farming.

A range of market mechanisms are necessary to achieve anything near that level of land use change.

Schemes like carbon credits that allow landowners to generate new revenue streams through carbon farming are emerging. There’s also high expectation that private investments in environmental measures that help mitigate climate change will be a significant market.

Farming practices that yield carbon credits offer financial incentives not just to reduce emissions but also create environmental and social co-benefits. They help extend benefits to farmers and society at large.

Financial benefits:

With unpredictable yields caused by climate change, farmers welcome the extra income from carbon credits. More remarkably, the growing demand for credits from carbon farming spurred creation of programs and pledges by giant food retailers and agribusiness.

But it’s crucial that they price carbon higher than implementation costs to attract farmers’ attention. Current carbon prices vary widely, depending on the specific type of farming activity.

Data from S&P Global 2022 below shows carbon sequestration rates for different activities.

Carbon Sequestration Rates – Mt CO2e/ac

Companies, governments, and other entities buy carbon credits for around $15/ton to $20/ton of carbon to offset their emissions.

Over time, we can expect to see carbon prices increase significantly to at least $70/tCO2e. That seems to be a lot of work given the current average of income farmers earn with carbon credits – $15/tCO2e.

But that should be the case if we are to prevent the planet from getting warmer, scientists say so.

Environmental and social co-benefits:

A study shows that farmers had increased attention towards programs that highlighted economic incentives from environmental and social co-benefits.

Carbon credit programs that consider co-benefits help ensure higher adoption rates by farmers. Examples of co-benefits include reduced use of fertilizers and increase in crop yields. Apparently, they’re measurable and quantifiable.

Carbon farming also results in social co-benefits. For instance, there are more seasonal jobs for farmers to do conservation practices.

In other words, farming carbon credits create a new revenue stream for farmers that weren’t there before. This even incentivizes them to transition to sustainable farming practices and adopt regenerative agriculture.

So the biggest winner at the end is the planet as the agriculture sector cut down its GHG emitting activities.

Carbon Credits And Farming: What You Need to Consider

As farmers embrace regenerative farming, their land goes from being a carbon emitter to sequestering carbon. In other words, their farms become a carbon sink which produces carbon credits.

Project developers then bring those credits to carbon markets where they sell them to emitters. They can be a business firm, an organization, or an individual wanting to offset their footprint and support farmers at the same time.

In return, farmers get additional income for each ton of CO2 sequestered by their lands. There’s a catch, though. Some may falsely claim to achieve certain carbon reductions without proper verification.

This is why it’s important that farmers know what to consider to earn carbon credits and what farming practices can give them that. Speaking of, here are the top ways to generate credits from carbon farming.

How do farmers get carbon credits?

Farmers can get carbon credits from any of these five sources:

Agroforestry
Peatland restoration and management
Enhancement of organic carbon content on soils
Nutrient management on cropland and grasslands
Livestock and manure management

For crop growers, in particular, credits are generated by shifting to carbon farming practices that enhance soil health and mitigate climate change by storing carbon in the soils.

On the buyers’ side, companies like Cargill, Shopify, and Microsoft have committed to promoting carbon farming methods that regenerate the soil by buying carbon credits from farmers.

But adopting carbon farming practices is just one step in the process to generate carbon credits. So in the next section, we’re outlining the general steps for you to get started if you want to earn carbon credits on top of your farming income.

Farming And Carbon Credits: How to Get Started

The first thing you should do, of course, is to find the right carbon program.

Finding the right carbon credit farming program

Carbon farming takes full commitment to be successful right from the very beginning. A good place to start is to connect with the right carbon credit program provider with the expertise, tools, and support you need.

The right program helps you to implement farming practices that improve soil health, enhance its carbon sequestration, and reduce carbon emissions. This step often starts with consultations to know expectations.

After you agree to the terms, the provider oversees the next steps to guide you accordingly. There are providers that offer payments right at the start of the program.

Gathering initial farm data

What makes carbon farming different from traditional agriculture is that it’s a science-based approach. It deals with measuring initial data on the farm to know how change can be implemented best with verifiable results.

In the same way, carbon credits must also be based on robust measurement and assessment.

While measurements are done at various stages of farming and carbon credits programs, it usually starts by gathering baseline farm data. These include 3-5 years data on crops, yields, fertilizer rate application, farm practices, and so on. Getting all this data is crucial to know the best carbon farming practices to adopt as well as keep track of the progress to account for carbon credits generated.

Devising a plan

After assessment, together with your provider, you should develop a carbon farming plan. It outlines the practices that will eventually lead to creating carbon credits. Each farm is unique and so must have a custom plan based on baseline data gathered.

Common examples of carbon farming methods that produce carbon credits include any of the following:

Reduced tillage or no-till farming
Growing or increasing cover crops
Reduced fertilizer application
Efficient fuel use
Improved residue management
Prescribed (rotational) grazing
Nitrogen management

Here’s how various carbon farming techniques can slash agriculture’s carbon emissions.

Carbon Farming Practices Projection in Cutting Carbon Emissions by 2050

Implementing practices and verifying results

Each carbon farming practice has different requirements, depending on actual conditions. The baseline data is vital during implementation to review the practices that need improvement or changes.

This is where MRV – measurement, reporting, and verification – are vital in generating carbon credits through farming practices. Without proper MRV, it will be hard to say if there’s real carbon reduction that happens. As such, no verification can take place.

Verifying results can be tricky. The carbon credit program provider or an independent 3rd-party body can perform the verification process. Calculations may include the amount of carbon reductions or removals generated by carbon farming.

Earning carbon credits with farming

After verification comes the generation of carbon credits. Once they’re issued, you can now trade the credits in a carbon market where buyers seek to offset their own emission reduction goals.

Successfully trading carbon credits results in a new revenue stream for you.

Again, it’s worth noting that the prices of carbon credits vary and change. Currently, they trade at as low as $5 to as high as $75. And as companies and their stakeholders opt to invest in sustainable practices, carbon farming gets more attention.

Plus, the carbon credit market is estimated to grow to reach a value of $100 billion a year by 2050.

Carbon Farming Credits

The fact that carbon farming doesn’t only help mitigate the climate crisis but also provides farmers another way to earn via carbon credits makes it an attractive undertaking. Let alone the environmental and social benefits it brings. 

Moreover, some aspects of carbon farming are measurable and adoptable. This makes it possible to monetize the practices through carbon markets. Only via the carbon market mechanisms will major investments be driven into regenerative agricultural practices on a global scale.

But same with carbon credits in other sectors, there must be rigorous standards in place for quantifying, monitoring, and verifying the emissions reductions they promise. That’s the only way that they can be real and impactful in the fight against climate change. 

But the good news is that international carbon certifiers exist to ensure highest standards when it comes to carbon credit measurement and accounting. Verra, Gold Standard, and Climate Action Reserve are some popular names in this space. They’re from the private sector but public programs are also available when dealing with carbon farming credits. 

As long as you know who to partner with, what baseline data to gather, how to plan for the changes your farm needs, and how to implement them properly, you’re good to go. You can turn your farm into a more profitable and climate-friendly endeavor.

The post Carbon Credits Farming (Everything You Need To Know) appeared first on Carbon Credits.

 After the success of its Rhino bond, the World Bank revamped it with a $50 million Emission Reduction-Linked Bond that will channel up-front financing to low-carbon development projects generating carbon credits like the water purification project in Vietnam. 

As with any other sustainable development bond issued by the International Bank for Reconstruction and Development (IBRD), proceeds from the deal will be diverted to World Bank projects.

But the coupon payments that would have been paid to investors will be used to fund the manufacture of water purification devices in Vietnam. Then bond investors will earn a return linked to the issuance of carbon credits from Vietnam’s water purifier projects. 

World Bank’s Sustainable Development Bonds

IBRD, the world’s largest development bank, is the original member of the World Bank Group. It supports the mission and strategy of the WBG by issuing bonds to finance sustainable development projects.

The sustainable development bonds finance green and social projects aimed at having positive social and environmental outcomes. 

Social projects include health care, education, employment creation, and food security. Green projects, on the other hand, involve pollution and climate change as well as sustainable resource use. 

The end goal is to align the projects’ results with the UN Sustainable Development Goals (SDGs). The World Bank then works closely with governments to assess progress toward the SDGs and identify areas where it can provide support. And in the case of Vietnam, it’s in improving access to clean water for 2 million children. 

The $50M Bond Deal 

The World Bank priced a 5-year $50 million bond that will support a water purification project in Vietnam. The project aims to make and distribute 300,000 water purifiers to schools and other institutions. 

The water purifiers will bring several benefits:

help cut carbon emissions,
improve air quality, and
lower fuel costs.

The bond is an outcome-based financial instrument attracting private capital to drive positive climate and development results. It’s 100% principal protected, and with investors willing to finance the project up-front. They will receive semi-annual coupon payments linked to the issuance of carbon credits that the water purification project generates. 

WBG’s CFO and Managing Director, Anshula Kant remarked:

“This outcomes based bond builds on our experience from the Wildlife Conservation Bond, channeling private capital to support the financing of development outcomes, with investors benefiting when projects achieve positive results. In the Emission Reduction-Linked Bond, outcomes are measured by the issuance of carbon credits while in the Wildlife Conservation Bond [a.k.a Rhino bond] it is the growth in rhino populations.”

This deal is the bank’s second outing, with the previous Rhino bond seen as a success giving investors good returns. It’s only a third of the size of the Rhino bond deal which raised $150 million. 

However, the current deal in Vietnam would see rising interest rates. That means there’s a chance to earn a higher return than conventional IBRD bonds. The Bank says the potential uplift would be at around 100 basis points. 

The Water Purifier Project and Carbon Credits

The purifiers will make access to clean water possible while also addressing emissions by preventing the burning of wood to purify water. Project beneficiaries will receive the purification devices for free. 

All because the Emission Reduction-Linked Bond structure is enough to cover the local manufacturing and distribution costs. 

The project can potentially reduce about 6 million tonnes of CO2. In context, that’s like shutting down 2 coal-fired power plants for a year. 

It will further bring about a lot of development benefits as the following:

The World Bank didn’t develop nor will it implement the Vietnamese project. The Sustainability Investment Promotion and Development Joint Stock Company (SIPCO) will implement it. 

SIPCO is a private company in Vietnam specializing in developing climate-friendly projects and it manufactures water purifiers. Its Chairman, Hoang Anh Dung said:

“SIPCO is proud to be associated with this innovative structure. It gives project developers like us access to finance in anticipation of future carbon revenues. That helps us move faster and expand programs that will positively impact thousands of kids across Vietnam.”

The reduced emissions from using purifiers will become carbon credits issued by Verra. These credits, also called Verified Carbon Units (VCUs), will then be sold to fund a coupon payment for investors. 

Coupon payments to bond investors will be based on carbon credits sales revenue from the proceeds. Proceeds from the first 1.8 million tonnes of carbon credits sold are earmarked for bondholders.

What Investors Have to Say?

The three major investors on the $50 million bond deal are Impax Asset Management, Velliv Pension, and Nuveen. 

Impax portfolio manager commented that the return opportunity in this new bond is more attractive than normal World Bank bonds. They’re satisfied with what they’ve examined in the carbon credit side of the deal.

Meanwhile, Velliv’s CIO said that the new deal is exceptional for its strong social profile and “significant green carbon credit”. While the head of ESG at Nuveen remarked that the bond provides additionality and has an attractive valuation.

What they’re all trying to say is that investors are willing to bet in these kinds of projects. More importantly, this carbon credits-linked bond and other initiatives of the World Bank can help buildup carbon credit markets.  

In October last year, the World Bank launched a new trust fund designed to pool public funds to provide grants for carbon emissions reduction projects. This facility, known as “Scaling Climate Action by Lowering Emissions” or SCALE, is atrust fund for the WB’s climate finance projects.

As the World Bank President David Malpass said, the bond structure linked with carbon credits “can be replicated and scaled to channel more private capital to development and climate activities”.

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