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COP27 is now in full swing, and ClimateTrade is actively participating in discussions about carbon markets and the sustainable future of our planet. At an Innovation Zone panel on the integrity of carbon markets, organized by Climate Action within the scope of the Sustainable Innovation Forum, our CEO Francisco Benedito shared the stage with other key actors in the ecosystem. There, he explained the role of blockchain technology in supporting the transparency of the market. “The carbon market isn’t about carbon: it’s about generating impact. And blockchain is just technology: it needs quality impact data to perform efficiently. Data from the Internet of Things, sensors, or even drones can help monitor the climate impact of carbon credit generation. But the great thing about blockchain is that it allows connectivity to all these data sources, and stores this information on an immutable ledger, allowing real-time communication and transparency,” Benedito noted. More on this topic: Building integrity and transparency in carbon markets Obstacles to carbon market adoption The carbon credit market began two decades ago with the implementation of the Kyoto Protocol, but voluntary offsetting took a long time to reach some momentum: its value is estimated at around US$2B in 2022. Asked what has caused this delay, panelists at the COP27 Sustainable Innovation Forum event shared a variety of opinions. Dr Suzi Kerr, Senior Vice President and Chief Economist at the Environmental Defense Fund, believes it’s a matter of institutions: Carbon is not a palpable thing, it’s something people must believe in, in the same way money is also an imaginary thing we all believe in. We haven’t yet created the institutions to make carbon as credible as money is,” she said. Meanwhile, several other speakers agreed that the market’s lack of standardization was its biggest obstacle. “Carbon offset quality and pricing are currently not clear, but blockchain can bring this transparency and trust to help develop the market faster and cheaper,” noted Angelene Huang, CEO and Founder of the Alliance for Impact, Carbon credit quality and accountability While he admitted that the ability to track credits once they are generated is key for broader adoption Dr Spencer Meyer, Head of Science at NCX, emphasized the need to ensure the quality of carbon credits at the source. “We need to leverage technology available today that wasn’t available when carbon credits were just being developed. The certification system has to evolve along with the technology.” Panelists also insisted on the importance of accountability, of knowing exactly who is responsible for what along the carbon credit supply chain. “The person who cares about the quality of the credit is not the buyer, ultimately it’s all of us. Civil society and governments as our representatives have to determine the quality of those credits. We need to think about the system as a whole and define radical new models,” said Dr Kerr. Carbon offset pricing and equity The panel’s moderator, Satya S. Tripathi, Secretary General of the Global Alliance for a Sustainable Planet, went on to discuss the broad variety of prices for carbon credits on the voluntary market, and the question of equity within this pricing model. Some speakers noted that all supply chains have several layers of value, meaning that the producer of any item gets only a percentage of its final price due to distribution, shipping or even marketing costs – and that carbon credits are no exception. But others called for systematic rules and regulations to improve and standardize pricing and ensure those generating carbon credits get fair compensation. “Price has not reflected quality in the past, it needs to be significantly higher to create meaningful change. The last thing we want is for the carbon market to become the next extractive industry,” stressed Dr Meyer. Benedito noted that ClimateTrade’s blockchain marketplace allows project developers to set their price on the carbon credits they are selling, to avoid too much speculation and brokers increasing prices. “Price is about the quality of the project but also a lot of intangible aspects that have to be taken into account,” he added. In the end, all speakers agreed about the importance of the interplay between equity and price in order for the carbon market to match its ambition of actually mitigating climate change.
This week, ClimateTrade turns four years old. It’s hard to believe that it was only four short years ago that we attended our first Sustainable Innovation Forum at COP23 in Bonn, with a nascent business and a head full of dreams. Blockchain for the decentralisation of climate finance We started out in 2017 by presenting ClimateCoin, the world’s first carbon crypto asset. Our idea was to leverage blockchain technology to make the accounting of reductions and offsetting more transparent, therefore powering its expansion on the global scene. It was exactly what the market needed: in 2018, the United Nations recognised ClimateCoin as “a basis for creating a global market for carbon emissions, allowing peer-to-peer exchange of carbon credits and a direct connection with the Internet of Things”. In 2018, we rebranded as ClimateTrade and launched the world’s first blockchain-enabled carbon offset marketplace, with a clear purpose: decentralising climate financing to ensure no organisation or country, no matter how small, is left behind in the transition. Now that we had proven the value of representing real-life carbon credits as digital assets for transparency and traceability, we were able to remove intermediaries between companies looking to offset emissions and the nature-based projects that needed financial backing. A key moment in the development of this project was the partnership signed at the beginning of 2020 between ClimateTrade and Acciona, a market-leading renewable energy developer with hundreds of sustainable projects around the world. Through the agreement, Acciona began offering the carbon offsets generated through its mitigation projects to companies looking to compensate their carbon footprint on the ClimateTrade platform. Today, we are proud to support pioneers like Santander Bank, Suez, Cabify, BME-SIX, Norauto, IAG, Danone, Lluch Essence, Beauty Cluster, Sacyr, ITeC and others in mitigating their impact and achieving their decarbonisation targets. Towards gigaton decarbonisation And we didn’t stop there: in 2019, we launched the ClimateTrade API, the first Application Programming Interface for carbon compensation, allowing the integration of the marketplace’s offering into any commercial transaction. Through the API, industry leaders such as Telefónica (telecoms), Iberia (airlines) or Melia Hotels (hospitality) were able to give customers the option to compensate the carbon footprint of any of their products and services at check-out, receiving in return an official certificate with information about the corresponding mitigation project. Today, the ClimateTrade marketplace has enabled the offsetting of more than 1.5 million tons of carbon. More than 500 companies are registered on the platform, purchasing carbon credits from projects in 20 countries. And through our API, we have reached over 2000 end users. Our work involves helping businesses compensate their environmental impact. But if we are to be a credible partner in this journey, we also need to walk the walk ourselves. Blockchain provides the transparency and traceability the market needs, but it is a notoriously energy-intensive process that comes with a significant carbon footprint. So earlier this year, we migrated all our blockchain activities to Algorand, the first carbon-neutral blockchain infrastructure, compensating all its emissions via ClimateTrade. Commitment to international cooperation We didn’t get here overnight. ClimateTrade is the result of all the hard work and dedication of a multidisciplinary team that has grown from just three to more than 20 people in the last few years. We won’t stop until ClimateTrade is the number one climate marketplace in the world. And to achieve that, we strive to continuously integrate new and innovative solutions for climate change mitigation and adaptation. ClimateTrade is also fully aligned with international agreements and negotiations to combat the climate crisis.This month, our CEO Francisco Benedito was at COP26 in Glasgow, representing ClimateTrade at various meetings and sessions. He made the case for investing in nature-based solutions at the Sustainable Innovation Forum panel ‘How do we make nature bankable’. There, he announced the addition of Spain and Colombia onto the ClimateTrade marketplace. This is the first time a carbon trading platform has connected directly with national registries, allowing for real-time offset cancellations and transfers. It marks yet another step in the creation of a reliable and transparent international carbon market that prevents double-accounting, one of the hardest targets in the Paris Agreement and the topic of the much disputed Article 6. With this move, as with everything else we do, ClimateTrade also facilitates the flow of financing from wealthy countries to those most vulnerable to climate change: this has been one of the main topics of discussion at COP26, where almost 500 financial services companies committed to align US$130 trillion with climate goals. Our marketplace makes it easier for companies in the developed world to make direct investments in certified projects abroad, and with a traceable impact. Continuous innovation A lot has changed in the past four years, but this is just the beginning. ClimateTrade has a lot of innovation still in store: before the end of the year, we will be announcing new products, new capabilities and new partnerships, all making it easier than ever for businesses to compensate their carbon footprint and achieve their sustainability goals. Stay tuned! Since Day 1, we have only had one motto: The Time is Now. Join us in the movement: Register for free on the ClimateTrade marketplace to browse dozens of environmental projects and begin compensating your carbon footprint now. Contact us if you would like more information before you begin your journey to carbon neutrality. Join us on social media to keep up with all our updates: Linkedin – Twitter – Instagram.
The journey towards a Net Zero world is long and arduous – and it probably shouldn’t be done by plane. Aviation is considered one of the hardest sectors to decarbonize: read this article to find out why. Aviation’s contribution to climate change Global aviation, which includes passenger and freight planes, is responsible for almost 2% of greenhouse gas emissions, and 2.5% of CO2 emissions (around 1 billion tons in 2018). That’s much less than road transportation (11.9% of GHG) or even livestock (5.8%). But the effect of these emissions is made worse by the collateral impacts of flying. According to Our World in Data, “as well as emitting CO2 from burning fuel, planes affect the concentration of other gases and pollutants in the atmosphere. They result in a short-term increase, but long-term decrease in ozone (O3); a decrease in methane (CH4); emissions of water vapour; soot; sulfur aerosols; and water contrails. While some of these impacts result in warming, others induce a cooling effect. Overall, the warming effect is stronger.” In the end, the aviation sector is considered responsible for 3.5% of global warming. Alternative fuels to decarbonize aviation Fuel is the biggest contributor to the carbon footprint of air travel. Removing emissions from aviation fuel would contribute to a 65% reduction in carbon emissions from the sector, according to the International Air Transport Association (IATA). Sustainable Aviation Fuel Currently, the only alternative to kerosene, the preferred fuel for planes, is Sustainable Aviation Fuel (SAF), essentially a bioful that can be made from almost any type of waste (plants, cooking oil, used clothes, etc). While burning these products results in CO2 emissions, SAF presents a reduction in lifecycle emissions of up to 80% compared to traditional fuel. This is because it is partly made from plants, which absorb CO2 to grow, and partly because it avoids greenhouse gas emissions from landfill or waste treatment. Additionally, SAF cannot be made from materials that would divert land use from food production, or from the products of deforestation. One of the advantages of SAF is that it can be mixed with regular fuels to lower the carbon footprint of flights without having to modify planes’ engines. However, SAF can be up to eight times more expensive than kerosene, which makes it cost-prohibitive in many cases. Green hydrogen The other alternative to kerosene is green hydrogen, a technology that is still under development but would remove 100% of fuel-based emissions from air travel. Hydrogen is a zero-emissions fuel that can be produced from different sources: brown hydrogen is made by burning coal, defeating its zero-emissions purpose; and blue hydrogen is made from fossil fuel, with CO2 sequestration integrated into the process (this is currently considered the best option for reducing emissions at a reasonable cost). Green hydrogen is the real game-changer, as it is made through the electrolysis water using renewable energy. Its production has almost no impact on the environment, making it the most sustainable option for aviation. Green hydrogen is still very expensive to produce, but its cost is reducing as renewable energy is becoming cheaper and demand for eletrolyzers is increasing. Hydrogen engines are different from fossil fuel engines, but airlines are already piloting hydrogen planes: Airbus’ ZEROe aims to be the first zero-emission commercial aircraft. It is estimated that hydrogen will enter aviation’s fuel mix in the 2030s. Carbon offsetting for aviation The aviation sector needs to support the development of zero-emission fuels through investment and demand signals, in order to make them more affordable. But in the meantime, the best option for the industry is to offset the carbon footprint associated with air travel. ClimateTrade offers an API that can be integrated into flight reservation platforms to give travelers the option to offset the carbon emissions of their flights. The API is connected to the ClimateTrade marketplace, where more than 60 certified carbon mitigation projects are available. All transactions are conducted through blockchain technology, giving customers end-to-end visibility of where and how their money is used. This traceability greatly improves both the positive impact of carbon offsetting, and the transparency of communication with travelers. Check out the pilot project we conducted with Iberia. For more information, visit our marketplace or contact us.