hi everybody can someone hear me
please answer in the chat
i think kate has some problems
Okay, so I think Kate has some problems.
So I'll kick it and Kate can join later on to like do the moderation and so on.
So thanks a lot to all of you for being here today, looking forward to exchanging some
cool information about high integrity carbon credits with our speakers.
I'll let all our speakers introduce ourselves and I'll introduce myself at the very end.
So yeah, the thoughts from neutral and flow carbon, feel free to introduce yourself and
I'll go first, if that's all right.
Well, first of all, thanks for having me.
I'm the head of carbon markets at flow carbon.
My background is in both crypto and environmental commodities trading.
So very much so a markets background at flow carbon.
We are exclusively focused on the voluntary carbon market.
So we're a vertically integrated climate tech and carbon financial services company.
So what that means is we're active across carbon project finance, origination, sales
So we essentially cover the entire life cycle of a carbon credit.
And on the climate tech side, we're building structured finance and distribution products
on decentralized blockchains with the goal to funnel all of this capital that's already
in the web through ecosystem on chain, as we call it, towards high impact carbon projects.
So we do all this with the mission to scale the voluntary carbon market.
I'm the co-founder and CEO of neutral and we're in exchange for environmental assets,
particularly tokenized environmental assets.
And that includes both renewable energy credits and carbon credits.
And we essentially build out trading infrastructure on top of partners that tokenize and curate
or create liquid instruments for these different assets.
And so on my side, so I'm already co-founder and chief climate officer at open forest protocol.
And at open forest protocol, we've basically built some infrastructure to issue fully data
backed transparent and digital digitally native carbon credits.
So for the moment, we're focusing on after station reforestation, but soon all the infrastructure
that we've built will also be opened to be able to build other verticals like mangroves,
biodiversity credits, you name it.
And so on our side, we focus on like extreme transparency on inclusivity and scalability
to enable the scale of like the VCM as flow carbon and neutral are working on also.
So for today, we'll be first digging into how we define a high integrity carbon credit
and also what parameters are involved.
So yeah, maybe Isaac, I'll let you start with this, like give you insights on high integrity
carbon and we can take it from here.
So the answer to that question, what is a high quality carbon credit is I would say
it's not black and white.
We view quality as a spectrum, it's really a combination of a variety of factors and
those factors are different depending on the type of project we're evaluating.
So they're different for like an industrial process project and nature based solution
and engineered solution, etc.
There are a number of things that we look at regardless of the project type or the activity
So I can talk through those at a really high level to get started.
So those include things like financial additionality, permanence, the risk of reversal, leakage,
monitoring and reporting and verification practices in place, environmental safeguards,
social safeguards, policy risk, regulatory risk, the presence of co-benefits like benefits
to communities and biodiversity and very importantly the backgrounds of the project
proponents, the ownership structure of the project and the flow of money.
So that's a lot of stuff.
I think if we want to maybe just boil that down into like what we look at first when
it comes to quality, one is additionality.
So that means the project wouldn't otherwise be economically viable without the presence
of carbon revenues and that's important because we want to direct carbon revenues to the projects
that need it otherwise like what's the point of the market and two is accurate MRV in carbon
So we need to know how much carbon was actually removed as a result of the project activities
over the project lifetime.
So if and I focus on those two things because if a project is an additional or it's inflating
their numbers, the project and the carbon credits are inherently flawed and even before
like moving on to all of the other criteria that kind of equate to a high quality credit.
Without additionality and MRV and carbon accounting in place, like the project doesn't really
have a chance of being deemed high quality.
That being said, I just really want to emphasize how quality is a spectrum.
It's not black and white and while a lot of the analysis we do when evaluating a project
is fairly objective, there's also a lot of subjective analysis as well and different
market participants have different views on it.
So I'll pause there and happy to dive into any specific points.
Yeah, thanks a lot Isaac.
Farag, do you have any insights on your side that you'd like to deep dive in?
No, I mean, I think Isaac covered it pretty well.
Really the framework for determining quality is looking across those categories that Isaac
mentioned like additionality, permanence, carbon accounting, then people look at co-benefits
as sort of like an added quality characteristic.
But yeah, I think diving into those and how we can improve assessments across that framework
I think is really the interesting part.
So maybe we could link this to why we're using on our side also blockchain to increase
the integrity of carbon credits.
I can maybe give a few insights here on our side and you can also deep dive further.
So I think the blockchain infrastructure that we have right now is super important and is
super useful because basically the immutability of blockchain, the transparency, the fact
that everything is publicly accessible definitely increases the quality of the credits.
So right now we're able to typically store all the data that's collected on the ground
with the MRV solutions on the blockchain.
All this data is visible to the public.
People that are interested in the projects can check out where the credits come from,
what's the project information behind and really deep dive at a level that was really
not possible previously because you had to deep dives in PDF reports instead.
And I think also to increase the quality blockchain is essential with the fact that there's no
double counting that's possible.
Typically when a carbon credit is issued on chain, you cannot issue two carbon credits
or you cannot retire the same two carbon credits.
So once it's retired, it's retired forever, it's stored on chain, you can see it.
And that's also definitely increasing the quality of the credits in the markets.
Yeah, and I think like, so when we do quality assessments, we don't do that internally.
We rely on third party primarily ratings agencies.
And something that we struggle with is if we want a project reviewed, it often takes
a very long time to get the required data to review a given project.
And I think in like the context of quality assessments, having that data on chain allows
you to conduct those reviews a lot faster.
It's not that they're impossible off chain, because you can still access that data.
It's just how readily accessible is that data and how transparent is it?
I think that to me in the context of quality assessment is the big value add.
Yeah, I'll add on to that really quickly.
I would agree it is possible to diligence a project today, but it's really, really
difficult and like really inconvenient.
And it's not conducive to a market that's scalable.
So a lot of like corporate buyers and users of the products, they have these really robust
diligence processes, like fruit set, it's a lot of it's done by third parties, which
we also leverage at flow carbon.
But with that data on chain, on the blockchain, more easily digestible, more trustworthy,
that allows for a smoother diligence process, a more transparent diligence process.
And it ultimately gets buyers and investors in carbon offsets, just more comfortable with
a purchase or investment or retirement.
And that's just critical to the growth of the market.
And I think also like by incentivizing people to being transparent, more transparent to
showing that all the data is available, you also definitely increase the quality.
So right now we've seen like some issues with the voluntary carbon markets of over issuance
With more transparency, more incentivized quality, this will definitely lead to higher
quality also carbon credits in the future.
So maybe we can go down to another type of information from you all.
So how do you really work with high integrity carbon credits in your organization?
And also like what's really the ultimate vision for a world of high integrity carbon credits
or markets at flow and at neutral also?
Yeah, that's a great question.
I can start, so yeah, again, flow carbon is vertically integrated.
So what that means is we're working with high integrity carbon credits from even before
their inception to their end use, sometimes even after their end use, if there's MRV after
So we help project developers get their projects to market.
We help them get their offsets to issuance and ultimately to sale and again, retirement.
I think our vision is to form a proper financial market for high integrity offsets.
So we envision institutional capital getting involved in the financing of these projects.
We envision every Fortune 500 company entering into long-term off takes to meet their sustainability
goals, not just the Microsofts of the world.
And we even envision a world where like every offset is high integrity.
I think that is the ultimate vision and that's where the market is, that's the direction
the market is trending right now.
And the tricky thing is, is that all of those things kind of have to happen in tandem without
high integrity credits and projects.
It's really hard to get robust long-term off takes.
Without off takes, it's really hard to get project financing and vice versa.
So it's kind of a definition of like a chicken and egg problem.
So our view is we have to do everything in tandem, but it's safe to say that nothing
is going to scale, which is again, our goal as a company without that underlying asset
being robust, high quality, reputable, etcetera.
Yeah, those are great points.
I mean, in the context of neutral, what we think about a lot is how do you embed quality
assurance into trading instruments that can be efficiently and easily accessed?
And I think that's something that is definitely has been a drag on the market.
Because if you think of like, what is the time required today to acquire a high quality
project, it's a really long timeline.
We're talking weeks to months of due diligence and then after that OTC acquisition.
So when we think about like what is required and that process and those timelines just are
not going to lead to scalable market.
So when we think about quality assurance and efficiency of trade, we always think about
how do you embed quality assurance into trading instruments such that someone can interact
with one very quickly and know that the underlying assets that they're interacting with are
And then it becomes a question of what party is determining that quality and how like who
are you relying on for that assessment and that quality assurance within a trading
instrument or like what data points are you relying on.
And I think that that's really the tough problem to crack if you want a scalable market that
has that that is of integrity.
And yeah, maybe I can give you some insights from our vision, like long term vision at
OFP and what we envision also.
And it's pretty linked and pretty similar to flow and neutrals vision.
For us, we definitely need a more liquid and efficient market.
The existing market is really siloed and not really efficient.
So streamlining the processes, as you were saying, from the refinancing, financing, creation,
registration of the project and even like the management of the project also until the
So there are a lot of things where we can also reduce the huge amount of costs that arise in
these projects for the moment.
We can definitely remove a few barriers to entry.
And I think we'll also get to high quality, high integrity projects by including smaller
scale project developers, because right now most of the carbon projects are massive projects
requiring a huge investment, upfront investment.
And if we include smaller scale projects, they're faster to develop.
Of course, the diligence remains the same in terms of quality, but the amount of investment
And I think this will also lead to more scalability, more quality, more diversity in the
And if we improve our system with transparency, blockchain will increase truth that comes up
from the project, trust and we'll get more engagement from the VCM.
And so all this leads to more purchases, more support, more funding towards climate
And yeah, we have a lot to do in the future to make this market a very successful market
that can support climate change solutions basically in general.
Yeah, I think the one difficult part with small projects is that like the you see some
reluctance for like third parties to pay for quality assessments on small projects because
the credits that that assessment is covering is fairly small.
And I mean, we so it seems like the smaller you make a project, the more accessible you
want that information to be and the more readily like interpretable you want it to be so that
you can conduct quality assessments easily.
Something we run into is I mean, every quality assessment we conduct costs money.
We have to we have to pay for that.
And we often will choose medium to large projects because it allows us to access more
credits for that payment.
So for small projects, I generally agree with the direction of like the direction that they
are required for a scalable market and their value.
But the smaller you make them, the more easily interpretable and accessible the information
required to conduct quality assurance has to be.
Yeah, that's a good point.
I think it relates to what I was saying earlier about how we look at like especially for a
nature based project, we'll look at the land holding structure and the money flows.
And there's definitely a stronger and stronger preference towards community owned projects or
small landholders versus like a large corporate landholder who's running the project.
And there definitely are economies to scale for those larger projects because audits are
expensive, at least in the kind of traditional registries.
Third party ratings are expensive as well.
But I would agree with you on that.
We should and we need to approach it from more of a decentralized scope where we can
bring these community owned projects and smallholder projects to market and not just rely
on these large corporate landholders who can do these massive one off projects.
Yeah, I mean, the irony of that is like the cost for quality assurance relative to the
number of credits that they cover may be lower for large projects.
But in most instances and more instances and relative to smaller projects, they're not
additional. So you actually end up like I think it's unclear whether the cost of quality
assurance to credits covered even makes sense because a lot of times when we're doing we
definitely see that like there's a relationship between the scale of a project and how
And oftentimes the larger the less additional.
Yeah, I think it's a right good point now and we can definitely like deep dive into how high
integrity carbon credits can recreate valuable real world assets.
And like you've kind of introduced the fact that local communities or can access also in the
future, potentially the carbon markets.
So if we deep dive a little more into how we can really create real valuable world assets
basically with these high integrity carbon credits, then we can give some insights on what
are these tangible or intangible real world assets that we're creating with these high
integrity carbon credits.
And I can start if you want with a with a few ideas.
So and then you can pick it pick from from from my points.
So I think first of all, like and if I'll focus mostly on like nature based solutions,
because this is OFPs core for the moment, part of projects.
And there's definitely first the land and ecosystems.
So when you when you build a carbon project, you're built, you're basically restoring land or
growing a forest or conserving a forest, growing a biodiverse natural habitat.
And this is typically like a really valuable real world asset that is directly linked to
these high integrity carbon credits.
There's also all the physical infrastructure that is linked to the projects.
You have, for instance, tree nurseries that you need to to build up.
Some projects also have schools or like other infrastructure training centers, for instance,
that they built that are really like physical assets that you see in the real world.
And then you have all these like kind of intangible assets that come with high
integrity carbon projects, like such as social, yeah, social, social assets with
Typically, if you if you have some kind of income and you're able to also taking into
account like local communities, grow a carbon project on, I don't know, 10 hectare, 100
hectare, because you have community land, or even more hectares, potentially, you're
increasing your income by 30 percent or more.
And this is like crucial in some of the countries in the world, especially in the global
You're definitely creating new jobs.
Like if you take an example, I don't know, 300 hectare projects, you would be creating
about 30 jobs or even more between the people that are planting the trees, the people that
are maintaining the forest, the people that are monitoring the forest and managing the
entire project as a whole.
So it's also cool to to really see what's the impact of these carbon credits on our
real world and how they're definitely linked.
And then you have also assets on the, I would say, the buyer side and the brand side.
So the the corporates that are buying the offsets.
So you have more and more like customers that want corporates and companies to have some
kind of environmental or social action.
And so by purchasing these high integrity carbon credits, you're basically showing your
support towards environmental social action.
And you have measurable assets and you can potentially also increase your customer loyalty.
And this will over time evolve.
We have so many like 500 companies that are doing climates and net zero pledges.
So yeah, these are examples of like real world assets that are typically linked with
I don't know, Isaac or Farok, if you have any additional insights.
Yeah, I can definitely speak to that because we work with projects similar to you kind
of like at their inception.
And a lot of these project owners are small businesses.
And coming back to the point on additionality, these small businesses are dependent on carbon
So they without carbon offset revenues or maybe the financing upfront in exchange for
carbon offset revenues in the future, these small businesses will go out of business.
That's that's not just specific for nature based projects.
My experience on that level is more actually on the engineered side, for example, biochar
In the case of biochar projects, they're often similar to nature based located in like rural
communities, again, small companies employing folks in a small town.
And without the presence of the carbon market, that company is shutting down and people are
getting laid off and carbon isn't being removed.
So that's kind of the definition of additionality that these companies need carbon offset revenues
to exist, not only to remove carbon, but also to employ the people that are doing the work
And then, like you said, in the case of nature based projects, there's all these additional
factors such as like biodiversity, which isn't really the case for the kind of more technical
projects that we work on, but yeah, there's there's huge importance beyond just the carbon
removal or avoidance that's that's taking place.
Yeah, I definitely agree with that.
I think one of the problems or one of the things I think about a lot is how do you balance
those two things or how much do you want to prioritize like non carbon aspects of a project?
And I think that that question is still an open one and something that I think through
actively because I mean, sometimes you see projects that are really strong on the co-benefits,
but maybe not strong on the carbon component.
And then it's always a question of, well, they may be helping the community a lot, but
they're not doing their primary purpose, which is to remove carbon from the atmosphere.
And then how do you value those kinds of credits?
Generally, it seems to me that like the more non carbon aspects you wrap into a carbon
credit, the more difficult it becomes to assess quality just because you have more metrics
I mean, that assessment becomes a little more convoluted, but that's something I think
I think it's a really tough question of like, what should be in carbon markets?
What should and what should we prioritize?
And how do we prioritize it relative to the core function of carbon markets, which is
I think that that's really a difficult question.
It's that that kind of speaks to the standardization of the market, right?
The carbon aspect of a project is very objective.
Everything else is super subjective and very qualitative, and it's hard to put that into
And that's why we see like different carbon projects, maybe one carbon projects, removing
100,000 tons, and they're employing five people, another projects, removing 100,000 tons,
and they're employing 50 people, just as a random example.
How do you convert those kinds of metrics into like a price per carbon offset?
I don't think we've figured it out, but it's something that if we did figure it out, it
would help standardize the market, help liquidity, and help scale.
And also probably increase also the price for these projects that have more co-benefits.
So, I think we can deep dive now into how crypto and blockchain can have some impact
It's a more broader question, but basically why we're all here, OFP, neutral, and flow
are all based on blockchain infrastructure.
And I think it's quite cool to explain why we did this choice and what we see, like what
are the advantages, what can blockchain provide to the climate community?
Farag, do you want to start?
I mean, I can talk about this in the context of carbon markets.
So, I mean, generally carbon markets are markets that are built on trust.
So when you're issuing a credit in the case of like OFP, it's like trust that are the
trees that you planted within this given area surviving?
Are they growing at the rate that makes sense for the carbon accounting that you're conducting?
And is this an additional project?
So there's trust that the issuance, at the level of trade post issuance, you're trusting
that if you're interacting with an instrument or with a broker, that the assets that are
being sold to you or that you're interacting with are of high quality.
And then finally, when you have an offsetting entity that wants to retire a credit, it's
trust that they're retiring credits that actually remove carbon from the atmosphere.
So across the entire value chain before issuance of a credit all the way to the retirement,
you have a market and a system that is based on and requires trust.
So then it becomes a question of what kind of infrastructure should you build a market
on that requires that kind of trust across the entire value chain?
And when you frame the question in that way, it becomes quite clear that we should be building
this infrastructure on blockchains that are transparent and traceable and allows us to
like trace the data that was used to issue a credit all the way to the entity that retired
And being able to do that is going to be essential for introducing integrity into
So that's why we chose primarily in carbon markets to work on blockchains.
I mean, we also have a broader thesis that like financial markets and trade are going
to move on to blockchains.
But there's a more specific thesis on why it makes so much sense for environmental
Cool, yeah, I totally agree.
The whole aspects are on trust, transparency, ease of transaction, liquidity, et cetera
I think maybe an overlooked or underrated aspect of building these markets on chain.
In my view is that it taps into all of this capital that's already there.
Like I don't know how much capital is off.
I don't know the number off the top of my head, but it's hundreds of billions of dollars.
The market cap of the voluntary carbon market is like a few billion dollars.
So what's really exciting to me is that building these markets on chain democratizes access
to the voluntary carbon market.
It allows retail to get involved and buy and retire carbon offsets.
It allows investors to get involved and maybe they have a mandate in their fund already
to deploy their on-chain capital towards real world assets.
And we can help allocate that capital towards impactful carbon projects.
So I just think it's really cool that there's this massive amount of money that is kind
And if we can just attract a small fraction of it to the voluntary carbon market, we're
like 100Xing the market cap of the market in today's terms at least.
One more thing I'll add, which is a little more specific to improving the efficiency
of trade is that one of the unsolved problems in carbon markets is creating a liquid instrument
that the markets actually want to use.
So that's like there have been a few attempts to do this.
There was the geo and geo contracts with Expansiv, there was the on-chain attempts to do this.
And most of them had initial success and then kind of tampered out due to just some incentive
mechanisms and arbitrage opportunities that led to the degradation of the underlying assets.
I think a really interesting opportunity is experimenting and trying out new approaches
to the creation of liquid instruments that make sense and are tailored for carbon markets.
And if you look at just general on-chain activity, you see these cycles of creative instruction
where you get robust financial markets through experimentation.
And I think applying that approach to carbon markets and the unsolved problem of liquidity
could be really interesting.
Yeah, definitely, Farik. Totally agree.
Maybe also from my side, I think we're super lucky to be able to have some new technology
that is available for us to innovate because we've got remote sensing, we've got blockchain.
And this is also a way to have like a blank sheet and just be able to kind of reinvent
how capital can flow to climate projects and how we can more transparently and more openly
And so this will also help scale the supply of carbon credits in the future.
And honestly, right now, like the market is expected to reach like 10 billion to 40 billion
by 2030, and we don't have enough supply with the existing systems.
So we need to increase the capital flows to climate projects if we want to face the demand
and be able to answer to this demand.
And so I think like blockchain has this capacity with its transparency, with its immutability
and so on, and with all the other advantages of having native digital assets on-chain of
being able to scale the supply and match the demand for future offsetting or trading
of these assets in the future.
Yeah, I would agree. I'll comment on the demand aspects. I think it's critical to increase
high quality supply. It's also critical to increase demand and make sure there's actual
And I think in order to do that, we need end users and big corporate emitters to get
on board. We need policy and legislation to get on board. And I think it's safe to say
in order to do that, we need to eliminate the perceived risks of using carbon offsets
as part of a company's broader sustainability diet.
Regardless of a company's intentions and how good they might be, their use of carbon offsets
as part of their sustainability goals cannot put them at risk of greenwashing accusations.
They can't result in bad press and potentially damage their reputations. And I think how
we solve for that is an area where blockchain plays a huge role in that it's addressing
the transparency, quality, and integrity question.
Yeah, totally. And I think maybe also a little teaser, talking about blockchain and the adoption
of blockchain for carbon credits. I don't know if you know it, but Bhutan has already
integrated its carbon registry on a blockchain, so using a well-banked backed system. So people
and countries are even moving fast towards issuing credits or registering credits on
blockchain. So this adoption is just going, it's just starting, and it will just grow
Okay, cool. So I think we have 15 minutes left. Maybe we can open to any questions that
the audience may have. Feel free to raise your hand, and I can activate you as a speaker.
Do you have any questions for Farik or Isaac?
For Isaac and Farik, you can also add any comments that you may have or any insights
that you would still want to share with everybody.
If there are no questions, I have maybe a parting message I'd definitely like to share.
Yeah, I guess a lot of folks on this Twitter spaces are curious in the carbon markets and
maybe active in the crypto markets already. I would just highly advocate for getting involved
in the space. If you're a company, start to understand your environmental impact and start
to do something about it. If you've got some investment capital laying around, explore
how you can maybe deploy that in the ecosystem and earn a return while supporting a carbon
project. If you're not sure what to do with your career, like go work at a climate company,
apply your crypto knowledge to the space. It's a really fun, exciting industry to be a part
of. And I strongly believe that we need more top talent in the space. So my message would
just be to get busy, learn work, get involved in the space. And there's a lot of ways you
Yeah, same thing. Again, this space is also very collaborative, which is super cool, because
we're all working towards a common goal. And the crypto space or the blockchain space is very
open and collaborative. So it's, it's a really good space to be in climate and blockchain.
So I think we have a few questions. Maybe human, you can go first, if you want.
Alright, yeah, perfect. Thanks so much. First of all, thanks so much for doing this space. It's
really, really good to have a space with flow carbon and open first, as you said, it's honestly,
sometimes it's astonishing how collaborative it can be. But obviously, it's a potential of
what I wanted to ask, not really knowing that much about the carbon market is about making it
more making carbon credits more accessible, essentially, because I don't know how much of
this is like true is current. But what I've heard, at least is to go anywhere near a carbon credit
sense, verified with a standard, or the gold standard, or maybe those are the same, I don't
know, it's like at least $100,000. And so my question would be, what do you think or maybe have
there been more web to native MRV things that lead to the same verification standards? It's also
compliant with regulation when when people want to buy concrete, I guess that may apply more to the
not to the voluntary carbon market. But yeah, how accessible can it be to get to the same
standards for people to issue carbon credits on the on the same level of smaller projects? Have
you seen any like what is actually the case? Because I know that there are many ideas, but yeah.
Yeah, so maybe I can take this one for the issuance of credits for for the smaller size
projects. So this is definitely something that's open for historical OSP is enabling in the future.
So we work with smaller scale, but also larger scale projects. So it can be 110,000 hectares.
And these like below 1000 hectare projects are normally not able to access the carbon markets,
the voluntary carbon markets, just because of all the the huge upfront costs that you have to have
to develop a project. So there will definitely be more opportunities for individuals and corporates
to buy carbon credits or retire carbon crop credits on chain with typically open forest
protocol, but also probably with neutral, how we can maybe talk for neutral here.
Yeah, I mean, the the assets that we list and that we work with are coming from partner
organizations, but we like coming from flow carbon or others. But we generally I think you're
you're touching on accessibility. I mean, we're in exchange. So we're primarily institutional
focus. There are certainly avenues for accessing carbon markets at smaller scales than like 100k
order sizes. I mean, that's one of the value propositions of tokenization is increased
accessibility. It's just not one of the value props that we as neutral focus on.
Certainly something that's, that's useful for the market.
Yeah, definitely. And there are other also organizations are doing like where you have
marketplaces, whereas an individual you could purchase carbon offsets, on chain carbon offsets
also. What would you say is currently a price that someone who's doing on the groundwork with
a smaller scale project needs to pay to get to the same carbon credit verification that otherwise
might take 100k minimum to get it verified and to sell it as a common credit. What would you say is
currently a price to to get there maybe using other MRV solutions? It's a good question. It
really depends on the standard and the MRV solutions that you're using. If I just speak for
open forest protocol, we have no upfront costs for the MRV. So we truly believe that we need to
remove these huge upfront costs for projects to enable more scale. And so typically, like smaller
scale projects wouldn't have a lot to pay upfront would have nothing basically to use our system,
we would only take a percentage of the carbon credits at the very end. And this is also what
blockchain enables. Because typically, the projects don't pay for validation with cash and huge
amounts. But they pay the validation once they issue credits, once they receive value, a portion
of this value is sent back also to the validators. So I think in the existing system, where only
large projects can access carbon financing, it's not viable as a small project to register its
project, what you would have to do is basically combine multiple land plots to have a project
that reaches at least like 1000 hectares. But without a system such as ours, and maybe even
others in the future, a small project would become viable by using like systems like us that remove
a lot of the upfront costs. And would that result in a carbon credit to the same standard that's
attractive to the same buyer as a verified verified carbon credit?
Well, this will have to see with the with the buyers. But for the moment, what we've seen on
our side is that we have because of the transparency that blockchain brings and so on.
And the eligibility criteria that we've set for our projects, we're onboarding more high quality
carbon projects than just typical like monoculture projects typically, if I talk about forests.
So the prices that we are expecting are higher than the ones that are sold on Vera. And we've
had we've onboarded also projects that have been using various standards that have been using
Acorn, which is a standard by Rabobank, which is more transparent than Vera. And these projects
were getting higher prices three times the price than they were selling on Vera. So Vera is a good
standard. It's a good standard for especially full volume, but you do have other standards that are
more transparent, that are a little different that have different eligibility criteria, different
methodologies, but very similar methodologies, where you where you are able to sell at a higher
price. So it really depends on like, I think, honestly, the transparency of your project
is a big part also of the price that you will be able to get for your credits. And of course,
also all the other that we were mentioning co-benefits that are harder to evaluate in the
price, but that people who will evaluate the projects or who read the descriptions are able
also to evaluate in and in SS. I'll chime in here and plug flow carbon for a second.
If anyone is going to Denver during East Denver, definitely apply for our summit. We're going to
be talking a lot about this exact conversation. Accessibility to the market, tokenization of
offsets, structured finance projects, products on chain that anyone can access. So it's on
February 28th, I believe at the Denver Art Museum. Yeah, don't miss this one.
Perfect. Maybe we can just go to also Ryan who had a question.
Ryan Kristofferson. Yeah, my question was actually very much similar to maybe human,
and I can maybe add a follow up question to that. But yeah, first off, very grateful for hosting
the space and having you guys talk through these updates. And yeah, my interest is viability and
accessibility for small scale projects. But having that already been kind of talked about, I guess,
one of the things that came up for me was the use of machine learning and satellite imagery.
Because as far as I'm aware, open forest protocol is still requiring on the ground efforts to measure
the trees, take photos, and track them in that sense. And I'm kind of wondering, too, is there
tools that are available and accessible to people that want to understand the baseline measurement
for their project to determine whether they're viable before they start adding additional costs
to the actual MRV process? And are you guys looking into the use of machine learning or
satellite imagery in any sense that would help with the accessibility for smaller scale projects?
Yeah, definitely. So on point question, regarding the ground data collection. So we have some
experience and expertise in working with reforestation projects all over the world.
And it's a common conception that you really need people on the ground to make a project successful.
So we do require this ground data to be able to have people that are surrounding the project,
being employed by the project, and so on. And this will ensure the successful outcome of the project
over the long term. If you just rely on remote sensing, it's very difficult to keep communities
involved and to make sure that the project or the project area is not cut down, for example,
in the future. So ground data is essential. It's the first part of our MRV. But of course,
we're integrating remote sensing images. We have a long term partnership, strategic partnership,
also it cannot, to be able to integrate our ground data with their AI ML remote sensing
estimates of carbon stocks. But for this, it's super also important to calibrate the remote sensing
models. And oftentimes, like at the smaller scale, the models can be off. So you need this ground
data to be able to calibrate the models. And so this is how we will be also able to provide all
the ground data that is collected by the project to improve the remote sensing models. And so what
we envision is the future is that probably we'll remove a little bit the sample plots or lower the
work that needs to be done on the ground. But we will always keep some kind of ground data collection
to make sure that people are involved in the project area. And then remote sensing will be
here to lower the amount of work. But we will only do this when we're sure that the remote sensing
models are well calibrated because otherwise you get results that are completely off.
So that's yeah, that's for your first question. And then for the baseline measurements,
and not involving a lot of cost upfront if you're not eligible. So the way we work with this is that
you can register your project on OFP. So it's basically just your project area and answering
some questions. So it's not a lot of work. It's some work, of course, but it's not tremendous.
And then you get an assessment and a result from us saying, yes, you can be onboarded or no,
you cannot. And so we have some evaluations that are done risk assessment and so on based on your
responses. And we can give you basically a yes or no. And so you wouldn't be going into the
monitoring specifically, you wouldn't be spending money into hiring people, because you would have
to be basically whitelisted before. I want to jump in here. I have to hop to another call,
but I just wanted to say thanks a lot for hosting the space. Had a great time and hope everyone has
a good day. Thanks a lot, Farag, for everything and for being here with us. Bye, everyone.
Bye. So we just had maybe a last question from Ed Boljua or Misha.
Oh, Misha, we went through. No, Misha, Misha, yeah, Misha first if you want.
Sure. Can you guys hear me? Yes, all good. Great. Greetings from Kenya. I'm the co-founder of
Eroko Analytics and I have a great use case for you guys. We have developed or in the process of
developing an ARR project in southeast Cameroon, 5,000 hectares of severely degraded tropical land.
And we've kind of scoped everything out. We've got a basket of 15 native species that we're going
to be planting. We've done FPIC with the 65 communities within the communal forest. We've
got all the ducks are kind of lined up in a row. And what would be the concrete steps that I would
need to take to survive the valley of death? So we kind of finished the conceptualization of the
project. We've got the people on the ground. We're basically ready to plant. We just need project
finance. So, you know, I've been following a lot of the kind of discussion around,
you know, blockchain and stuff like that. But what are the concrete steps that I can take now
to move towards project financing? Yeah, it's a very good question. Just maybe, I don't know,
Isaac, if you have another meeting, I can take Misha's question if you want. And I just want to
thank you a lot for being here. You can, of course, stay. But I just wanted to thank you if you have
to go. Yeah, I do have to go. But thank you so much for having me. Great questions, everyone.
And yeah, have a good day. Thanks a lot, Isaac. See you soon. Bye-bye.
Cool. Yeah. So, Misha, it's a really good question. And it's a question that we get a lot
because we have a lot of projects that are ready to be developed, but they lack the financing.
So, on our side, we try to do our very best and match you with any, like,
funders that we know about. We're starting to kind of have this database of projects that are
looking for funding and funders that are looking for projects. But it's not, like, our main
job, but we've seen that there's really some gap here, as you say. So, we can help in a way,
but we're not, like, 100% focused on bridging this gap for the moment. What we have in plan,
and that will solve your problem here, is what we call the pre-financing mechanism.
It's not yet developed, but it's something that we would want to put in place because we've
definitely identified that financing mechanism and pre-financing for projects is essential.
So, basically, this could be something that you would be using in the future,
and you could get some pre-financing for your project, and the financing would unlock
progressively with the successful reach of milestones that you've set and so on.
So, yeah, it's not available yet. It's something that needs to be developed.
There are also other pre-financing initiatives or financing initiatives.
We can put you in touch with what we know. But, yeah, there's still definitely a gap for the
financing parts. Great, thanks. I'll pick it up offline with you. Okay, yeah, perfect.
And I think we can maybe wrap up after Ed's question.
Yeah, thank you. I come from the regenerative ag movement, and we've been working on a regenerative
verified and certified. I put down in the purple pill a link to a group that's working on this
because regenerative agriculture is really catching on around the world. I'm in the U.S.,
we're expecting to have 100 million acres by the end of the year in transition.
The carbon credit market hasn't really worked for farmers anywhere, so the adaptation has been
pretty limited. But this is a real simple using a soil test that's been custom designed to really
understand the functioning of the soil, both in squashing carbon and all the other benefits. So,
as I said, there's a link down in the purple hip pill about it, and it's starting to gain some
interest. I think if we can really work with farmland, we're finding that once we stop
killing and use cover crops and all these sort of things that we're really benefiting in the
carbon, what we're benefiting in many other ways too. So, it has a lot of flexibility to the data
that we're collecting, and it also really benefits the farmer too because they get really valuable
information on how they're doing and what they could do to even make things better. So, I'll
land it there. Thanks. Yeah, thanks a lot for the info Ed. So, I think we're arriving at the end.
Thank you very much everybody for being here today with us. Don't hesitate to put any question
that you may have on our Twitter, we'll answer, and looking forward to the next Twitter spaces.
We will keep you posted on our Twitter, and have a very good day everybody.