Filecoin Sustainable Blockchain Summit - LATAM - October 2022, 31 Oct 2022

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From YouTube: How to Start a New Carbon Project that has an Impact - Stenver Jerkku - Montaña (Main Stage)

Description

There are a lot of new players entering the space, and many of them are quickly disappointed by un-transparent markets and the chaos of the overall information. Many arrive to the conclusion that they should create their own registry while doing a carbon project. After all their friends have bought their credits, they quickly discover that they are struggling to find buyers to their credits.
We want to tell everybody why it's a bad idea to start your own registry and how can we improve the space at scale. We want to help to kickstart as many projects as possible, make it easy for them to set it up, focus on the important and find funding for their project.

- Sustainable Blockchain Summit LATAM 2022 - https://sbs.tech/

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Developers throughout my travels and one of the things I've noticed, is that they have incredibly hard time starting new projects. For example, I met a UK farmer who proudly told me he got like 80 cents per tree.

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I ran the numbers for him, and this was like around five dollars per seal or two ton that he got. This was UK agroforestry project. I was like brother. You got ripped off uh because, like those credits were sold off for like 20 to 30 in a few months later- and we see this is like endemic in carbon industry- it's very predatory towards new players. There's people out there who want to start carbon biologics, they have the drive, they have the uh skills, but they do not know how the carbon markets work.

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In fact, carbon markets, in my opinion, are one of the most unclear and untransparent markets out there. It's incredible how untransparent they are. Most people do not understand them.

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So with that I'll give you guys a talk and simply try to educate a bit and give my perspective how the carbon markets actually look like, and maybe this will help some people navigate. The space a bit better so yeah, we all know how carbon projects is, one of the solutions, one of the many solutions for climate change, uh It's Not, the Only Solution.

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We need to do a lot more than just carbon projects, but it is an import important part of the huge puzzle that we're trying to put together and one of the key things about carbon markets.

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That we see is that there's a real hard time like finding high quality, Supply Supply, that's you know either sequestering carbon out of the atmosphere or completely removing it with high-tech technology and I wanted to just give you some examples: how much in demand actually nature-based projects are or high-tech removals, in contrast to emission avoidance, there's so much I hear about people saying that we should need to another emission avoidance technology for this and that, but the reality is that the mission avoidance is in supply surplus right now.

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Last year, for example, the total carbon Supply was increased by five percent globally, while.

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Nature-Based removal was reduced by 24 and high-tech removals were reduced by 38 percent, so this really shows that it's actually, these projects that are in Supply, Crunch and high demand, while emission avoidances in supply surplus right now and I think that a lot of people undervalue how much we just need to replant more trees and mangroves and stuff like that, and we should funnel more help towards projects like that.

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And uh oh yeah, I sort of all spoiled the slide, didn't I, but yeah. uh This has been basically the reality right now and it's also the same things are reflected in the prices, so we can see that mangroves and ARR prices are going up.

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Well, all the prices have gone up, but mangroves and arrs are definitely have gone up way faster than the other projects have and if there's anything, that's going to hit 100 bucks by the end of uh 2030., which is what all the mckinseys and stuff think that that's what we should do, then it's probably going to be nature-based sequestration projects. Well, high-tech removal is already there, but everybody expects high-tech removal prices to come down, not up emission avoidance, it's hard to say that they will reach this price range by 2030.

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Something very catalystic should happen that will basically Drive massive amounts of demand into this Market.

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So yeah uh another thing I wanted to talk about is the participants in the carbon markets like what are their? Who are the different participants? What are their motivations?

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A lot of people think that the carbon markets is essentially hey. We have some suppliers, we have Vera or gold standard or well. We just had a fireside chat with some other alternatives and they're basically putting their stamp on it, and then we have companies who buy them, but that's not. It there's actually a whole Eco system in between right.

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So when you start the carbon project, a lot of people find out that it's actually incredible difficult to start a carbon project and there's a lot of companies out there who help you do it. There's Consultants like South, Pole and a lot of other Consulting companies.

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In fact, my last next slide will give you a curated list by us of different carbon Consultants who can help you set up a project they're all very legit and for like, for example, soil, carbon e-agnum, Indigo, agrina, they're, they're, helping you set up soil carbon projects, but they don't solve the funding issue, because if you didn't know, then, when you start the project, you have to buy the seeds and stuff put them in the land. Take care of the trees.

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For example, if you do a reforestation- and it can take you up to five years before you can invite the vvb a third party validated verifier on your land, who essentially measures the impact you had and 10 issues your carbon credits, which you can sell five years so like when I was my previous company I found the DC agronome.

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It manages around a million hectares, central eastern Europe for those who are from us. That's like 2.4 million Acres, and we had to go to Farmers and tell them that hey. Why don't you become environmentally friendly? Just like uh you know, use cover crops and stuff like that and work for five years, and then you can get paid.

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It's like terrible. Nobody wants to work five years before they get paid.

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So there is a serious funding cup here and there's private funds trading houses, hedge funds, family offices, who fill that funding Gap.

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They do something called forward purchase, so they give an advanced payment for the project and the project uh delivers the credits down the line right now, I'm working on solid world and we're building infrastructure for these players after the project gets certified, which can happen years later, there's a lot of players who want to make this process more efficient.

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So, right now, when we talk about third party verifiers, it's for example, under Vera, it's literally people vbps who come on your land. They use measuring tapes to measure how much biomass they have on multiple plots, and then they extrapolate it over all your land. It's very manual process.

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It's not scalable, but there's a lot of mrv players out there who want to make this more scalable and reduce costs over there.

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And then you get into the spot credits, you finally have a credit that can be sold. It's probably been sold few times actually already by this point, but you know uh now: there's a spot market and there's a lot of great innovators on the spot.

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Market who want to make the spot trading more efficient, more liquid and more transparent, toucan flow, carbon uh Tyler Moss, a lot of different players and they're all in one form or another uh I've kind of put them in the same box there, but actually they're all doing a bit different things so always go to the details right and then. Finally, there's registries, you know corporates eventually buy the credits and then they retire them in where our gold standard or some turret registry return protocol is trying to do it for on-chain offset dating.

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So they basically do it for you. Climadower is uh doing chain retiring.

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So this is the in our view how the carbon Market looks like on a high level, and each of these players has actually very different interests and ideas. How the government Market should work right now. The markets are so untransparent because it's beneficial for the status quo and we in the blockchain industry we're trying to break that. We're trying to change that right, make it more transparent, and this will be good for the entire space.

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So if any of you want to start the project, here's a list and feel free to reach out to me later I'm happy to send it to you in an Excel file form. But these are all very legit players. They know how to set up a project they've done it a lot, their Consultants who specialize on that and yeah.

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We usually just recommend people going to them and that'll help you do it all.

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So I wanted to talk a little bit about solid World Tower as well. What do we do in the market when we talk about the funding? Gap I already mentioned how there's a massive wait time. You have to wait for like up to five years before you get paid, but on top of that, the forward credits have a delivery risk, in fact, vast majority of projects over promise to their investors and under deliver what they promise I'm speaking like 90 plus percent, so yeah.

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These investors are taking on incredible Risk by buying these forwards and then they're buying on to illiquid assets, because it's purely OTC market.

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So you can see how this is scary for actual investors as well. It's not all Rosy for them for the new players who come on the market, the people who literally plant the trees, let's a Spanish guy who does reforestation in Spain like for him. The market is like very confusing, because it's so untransparent, it's very predatory if you're a new player, but for investors it's risky and deliquid, so the market has a lot of room to Improvement.

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We are solving these issues. That's why solid World exists.

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First of all, we theorist Investments for investors, so we essentially give them a due diligence and risk analysis about the carbon projects for free as a public good, because we believe this promotes transparency in the space and it also will start bringing more Capital into space and the team we have doing. That is absolutely another level.

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I've seen I think all the other risk analysis variants out there and it's just my opinion and I'm heavily biased, but I think we have the world's leading method over here, and the second part we do is that you can once you tokenized these folders on our platform.

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We guarantee you 24 7 price transparency, guaranteed, buyer and seller, or you can become the person who actually enables all of this Market and start turning rent for providing this service, and we believe by doing this Theory risking this for investors and making the markets liquid, guaranteeing buyers and sellers will fastly vastly accelerate the entire funding cycle.

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Carbon projects can suddenly very easily right now they have to go to you know these conferences, shake hands with investors, go to cocktail parties Mingle, but not all carbon project developers are sales people. A lot of them just want to. You know, help the planet by having a fair and transparent and liquid Market.

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They can start focusing on their business and they have a guarantee buyer and on the investor side, since it's dearest liquid, we believe it will unlock vastly a lot more Capital into the space.

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So the expansion Cycles start going faster and we have more Capital to go around. So that's it. I hope this was educational to you and if you have any questions, please feel to reach out. My mission is to educate everybody about carbon markets and do everything again to help to stop the climate change.

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