Carbon removal credits need to be much more trustworthy than carbon offsets are today in order to scale-up CDR.
On last week’s show, we covered the news that the voluntary carbon markets have shrunk this year. After many carbon offset projects have come under scrutiny, corporate buyers have grown more hesitant.
To prove that carbon removal is worth investing in and better than the status quo, project developers and sellers of credits will need to be able to prove that a credit sold actually means CO2 was removed from the air.
It’s one thing to do that in a lab when the technique is being developed in a lab. It’s another to do it at scale, in the field, in real-world conditions.
The tools available today won’t be enough to create market-wide trust. What software, MRV, and accounting technologies are being built today, that will manage the carbon markets of the future?
Dr. Anna Lehner at Carbonfuture is one of the people trying to answer this question. Today, we’re talking to Anna about how a wide range of CDR methodologies can be measured, quantified, certified, and sold to make it easy for buyers, all while creating more trust in the market.
On This Episode
Radhika Moolgavkar
Resources
Carbonfuture’s Trust Framework
Robert Höglund’s post on which companies are buying carbon removal
Subscribe to Climate Workers Anonymous
My other show, Reversing Climate Change
Books referenced in the podcasts, at Bookshop
Full Transcript
Announcer: You’re listening to Carbon Removal Newsroom, a weekly show about current events in the world of carbon removal, from technology and innovation to policymaking and job growth. Brought to you by Nori, the carbon removal marketplace.
Radhika Moolgavkar: Hello, everybody, and welcome to this week’s episode of Carbon Removal Newsroom. As any of our listeners who might have listened last week know, we covered the news that the voluntary carbon markets have shrunk this year. After many carbon offset projects have come under scrutiny, corporate buyers are more hesitant than they once were to invest in them. To prove that carbon removal is worth investing in and better than the status quo, project developers and sellers of credits will need to be able to prove that a credit sold Actually means carbon dioxide was removed from the air.
It’s one thing to do that in a lab when the techniques are being developed. It’s another to do it at scale in the field in real world conditions. So today we have Dr. Anna Liener, one of the people trying to solve this challenge. Today we’re going to talk to Anna about how a wide range of CDR methodologies can be measured, quantified, certified, and sold to make it easy for buyers, all while creating more trust in the voluntary carbon markets. So Anna, thank you so much for joining us today.
Anna Lehner: Well, thank you for having me.
Radhika Moolgavkar: I’m really looking forward to jumping into these questions we have for you. So let’s just start sort of at a high level and remind our listeners what Carbon Future is and tell us a little bit about your background.
Anna Lehner: Great. Yeah, happy to. So we call Carbon Future the trust infrastructure for durable carbon removals. That’s what we want to build here. And we offer software based products to help scale carbon removal activities to a climate relevant level. And we do this by building trust across the ecosystem and we work together with carbon removal suppliers and buyers and certifiers. And try to combine this all in a digitally enabled approach. So our products are called on one side, it’s an MRV plus system, we call it. So that’s a system for monitoring and reporting and verification of garden removals.
And we focus on durable ones, but for a variety of pathways that are ready. And we are also a market maker for durable carbon removal. So our product marketplace is facilitating the delivery of credits certified under third party standards. And we have done that so far since we started in 2019. We have delivered 32,000 tonnes of CO2 removals that have been fixed from the atmosphere, transformed and durably sequestered in carbon pools that Don’t equilibrate frequently with the atmosphere. That’s what we do. My background is in chemistry and materials science. And at Carbon Future, I’m focusing on standards and methodologies.
So really on how to implement those quality and process requirements for proving that carbon removal has happened into our software and our services.
Radhika Moolgavkar: So obviously software is broad, but have you had a certain geographic focus in any way, or are you looking worldwide? How do you, how do you think about that right now?
Anna Lehner: So we’re starting from, from the core of Europe, our headquarters in Schreiberg in Germany, and we also have an office in Zurich. Where there is quite a hotspot for a durable CDR right now. And we have another entity in the US at the West Coast. We work globally and we have suppliers all over the world. We also have buyers all over the world, but we do. Yeah, we definitely see software as a tool to empower global climate action and not just develop Those more industrialized projects that we have that are typically associated with the industrial carbon removals more, which typically are located in the global north or started from there.
So yeah, we see digital tools definitely as a bridge into having a more inclusive and global effort to really, yeah, avoid hitting more tipping points on those planetary boundaries for our earth system.
Radhika Moolgavkar: Great. Well, let’s dive in a little bit into some details. So as I mentioned on our last show, we talked about how carbon markets have actually shrunk in the last year. And there’s, you know, a bit of supposition that’s partially due to the loss of trust in most carbon offsets. So you were talking about generating trust through software and transparency. And can you dive that into a little bit more detail and the type of evidence that you guys rely on for your MRV platform?
Anna Lehner: What we see in the market, so seeing the carbon offset market as a whole shrinking is something that we interpret as really making room for something else to really grow and evolve, which is still nascent and smaller. And by that, I mean, it’s definitely, we see a growing uptake of volumes for those durable carbon removals where we really have permanent or very robust carbon pools that CO2 is eventually being put in. And we also are making a good progress, I think, on the MRV, on proving and gathering more data to really document for the buyer in an end-to-end look through of what has been happened, what has been done, what kind of activities really, yeah, resulted in this removal that’s promised.
There has been a lot of difficulties with proving that and offset has been have been sold, but that really shouldn’t have been sold and projects have been poorly monitored and poorly controlled for their actual outcome. And this is a problem and we definitely don’t have time anymore for bad carbon offset credits whatsoever. So I think we see a shrinking of that part and that’s a good thing. And we really need to now focus on two Large families maybe of projects going further and one I see those projects where we really have a very clear model of how we can monitor, report and verify and how we can translate what’s happened in the real world into a specific amount of certificates or of CO2 equivalent tonnes to issue.
And the other part of projects that is also super important Are those who are a bit less easily measured? It could be, yeah, projects to foster biodiversity or regenerate natural ecosystem, have more perspective on environmental justice or inclusion. And now we might not be there to have a very clear model of how to translate those real world activities into data models and then valorize them In terms of something, it doesn’t have to be carved, right? But just something that is really, that we have an agreement for. And I think where we definitely need to funnel investments to those kinds of projects as well.
And I see that happening, for example, in the SPTI Beyond Value Chain Initiative, where really corporates are encouraged to put part of their budget aside to not just Reduce all the emissions that they can and offset the rest by really balancing them with carbon removals, but also using money to drive R&D innovations and advocacy of policy development, for example. It was a long answer.
Radhika Moolgavkar: It was a great, great answer. And I appreciated you giving an example of sort of the second family. But is there also an example maybe of the first family of projects that are more or further along in the MRV that you are thinking about and that Carbon Future is supporting?
Anna Lehner: No, of course. I mean, that’s what we do. That’s our core focus. We started basically with biochar carbon removal, BCR, as really a sweet spot that has a good mix of how we think a durable carbon removal that is really permanent in the right matrix applications, either in soil or also in construction materials, but it has a range of co-benefits. For those applications, it’s relatively easily available at both A high industrialized and low tech scale. So it can be decentralized, employed and scaled all across the world. And it is ready for delivery right now already.
So we see, just if you look at the CDR. FYI mid-year report, biochar carbon removal was at 92%, I think of the delivered credits. And that is really what we see happening. That’s our go-to. But we’re very open to expanding our portfolio to have more projects for BEX, for example, or so bioenergy carbon capture and storage and also direct air capture where an MRV service by a separate provider is really helpful. So those would be probably rather useful. Decentralized projects that really need the chain of custody monitoring and tracking of the ownership and of all the attributes necessary to calculate the removal, the net removal value.
And enhanced weathering is interesting to us as well. All of those where there are methodologies around, they’re being evolved and defined more clearly, but we’re getting ready to really Yeah, so I think when you talk about that span of methodologies, right, they are broad.
Radhika Moolgavkar: We talk about this a lot on the show, how there are challenges in all of them. But when you look at the MRV space very specifically, are there MRV platforms or techniques that are coming online right now that are you’re most excited about or most interested in pursuing?
Anna Lehner: I’ll go back. You asked about trust and I didn’t really explain how we see that and how we apply it to MRV. So what Carbon Future likes to do as we rebuild our trust infrastructure is to have five different dimensions of looking at what fosters trust. And one is quality. The next one is transparency. Then we have innovation, impact and collaboration. And basically those are just viewpoints and perspectives that we can look at Different elements of what we build and how we interact with other stakeholders in the ecosystem and then define proof points to improve, to really make it very tangible that we’re creating a product that’s more trustworthy.
And of course, trust always requires two parties or more. So it’s kind of a transmission quality and it is a combination of the ability and the integrity and the benevolence between those parties. So if you’re asking things that I’m excited about, it’s not that I’m thinking about a very, very specific type of sensor or an IoT system or blockchain or so. So it’s not about the tools that I get most excited about, but really about the fact how... In new projects, we can work together to really drive the understanding of who does what, who has which role, how can we collaborate in a way that works best for each one building this little piece and how can we implement incentive structures that really work against Lowering the bar of quality for removals.
And of course, a lot of those entities along the value creation of a car removal, they feel an incentive to, well, they would get more money if they issue more credits. So it would be easier to maybe not measure that exactly or that in depth. And I think what excites me is really Putting this machine together that works for a full consortium of everyone who’s needed to do this together and incentivize all of them through smart governance and smart data interfaces to really work together.
Radhika Moolgavkar: So you mentioned SBTI and CDR. FYI, and I don’t know if you saw today, but Robert Hoagland released a new blog post talking about only like 5. 5% of companies with SBTI targets have purchased carbon removal. So how do you envision this work that Carbon Future is doing in helping drive standards and bodies like SBTI to include carbon removal, foster the growth of carbon removal, You know, help it become a more vibrant industry.
Anna Lehner: Yeah, that’s a great question. And of course, as a young company, it’s always the interesting bit is to find a blue ocean, right? To build a product that is not really Where the market is not existent yet. And we’re kind of, of course, always on this wave of trying to build something for a scale of a market that is not really here yet. That’s what’s exciting, but also Of course, very difficult in a way, because as you say that the demand on the buyer side is not created yet. And that’s something we think we can help build really by clarifying with all the entities that are involved, how the mechanics of successful products work here.
Maybe just to step back once again, when we talk about models and we talk about this product of a removal, Certificate, which is inherently intangible, right? No one, someone could buy it, but no one can really touch it or see it and it’s happening somewhere else in the world and it’s just very difficult to grasp. So I think establishing the transparency about what we actually deliver is key. And my understanding is that to do this and to package this product that we can sell as removable credits, we have to go in three layers, basically.
I learned this from Jens Strucke. There’s a great sidewalk CDR community as well. And he says that basically you starting at the level of the primary data of just Understanding how can we model this process that we’re looking at and it will be very different if you’re looking at enhanced weathering or at soil carbon or at biochar carbon removal. What is the data that we can actually get from the world and then That has a different availability and also you need different ways of retrieving the data. And then the next layer above it is how to translate it into, in our case, carbon.
So everything that’s happening needs to be translated in either a positive emission or a negative emission. And then we have to really make the balance to calculate the net ring bubble at the end. And the next layer on top, and then I’ll come around to your question, is really how to valorize and how to monetize those things. And this is something that is up to us as a community, as a global society in a way. It’s not just, we cannot just put it on the shoulders of a small company to decide what they want to do to offset their footprint or to balance any historic emissions their company has cost or not.
I think we need to decide as a society, as a whole, that those activities, if they do no harm and we can prove that they lower the content of greenhouse gases and this blanket covering our earth, then this is a good thing and that we need to really, yeah, remove all hurdles for this to happen and build frameworks and policy and regulation to drive, to incentivize and building more of that. So yeah, I think the way to go is really to try to get agreements about what is behind the quantification models and get drives of multi-stakeholder processes to really establish some commonly accepted quantification of what we think is high integrity and high performance MRV.
And once that’s done, we can base our efforts to incentivize actions and funnel investments into those. And that’s what we do mostly on the policy level. I know you had Sebastian Mannhardt on the show who does a lot of that, making sure that the messages that we think we know about or that we learned about get really disseminated to a lot of people who can make decisions that impact the lives of many people.
Radhika Moolgavkar: So Anna, do you see that as the way to help also... Mm-hmm. Mm-hmm.
Anna Lehner: Yeah, that’s also a great topic. I think about that often. And I think we’ve seen some progress already just by having three or four or five methodologies under different standards for basically the same type of removal project. That’s in itself, in the beginning, it’s a good thing because I think that’s where we learn if the next version is written, then of course it doesn’t make sense to completely, yeah, to do something different, but things will harmonize and Eventually, hopefully we will also not just copy and paste and grab work that someone else has done, but we can maybe find a scheme to license those things out.
I genuinely believe that protocols of monitoring and reporting should be open. It should be something that we agree about and not just the scientific expert circles, but in the larger community. And they should be transparent. Of course, for startups driving this, it’s tricky because that’s been their work for years. And they need to monetize it in some way and they need to profit from the fact that they’ve been the first to define it. So definitely there’s a phase of having a spread out in the number of methodologies, but I think we’re also seeing how it comes back a bit.
I admire the CCS Plus initiative where they are setting up their methodologies to be a common good and to be open. And in principle, another standard can come and adopt them and build them into their guidance framework or governance framework. And the same thing for the European CRCF, the Carbon Removal Certification Framework that’s also built as a general quantification system for carbon removals that then can be adopted by national or supranational standard holders and implemented. I definitely see that coming. We see it in other industrial sectors as well.
Radhika Moolgavkar: So we’re on the way.
Anna Lehner: I’m sure.
Radhika Moolgavkar: Yeah, we’re still a young industry and a young market. And I think it’s sometimes easy to lose sight of how much progress we’ve even made in the three years that I’ve been around. More chaos, but also a lot of progress. And I think that’s just the natural evolution. So I want to pivot a little bit away from standards now to maybe about the data and the modeling that You know, underpin a lot of these methodologies and techniques. So could, you know, you were talking about startups and their need to protect their IP is how I think about it.
But how do you make data open to allow for good MRV? And how do you think about modeling being made more public and accessible and shareable?
Anna Lehner: Yeah, great questions. And again, I think it really depends on where we place this project that we’ll be talking about, or this type of project or this pathway in this whole spectrum of where we started out of. Is it something that we have relatively cleanly established MRV? Do we know how to do that? Do we have proxies to measure, or is it something that is so difficult to grasp that we will have to do modeling? For example, oceans, they’re so complex and huge, so we cannot measure everything, but once we have established That there is a link between, say, the pH of the water and the capacity to bind CO2 from the air, then we can use that, of course.
So I think the modeling, everything is a model, of course, in a way. The question for the biochar carbon removal case, a typical job to do is to determine how much carbon is in a packaging unit of biochar. And you could do this either on a mass based way. So you weigh the biotrape and then you have also to make sure that it’s not too wet, or you could do it volume based. And both is possible. We have the relation of density to mass and volume, right? That’s the model. That’s the truth behind it, that we agree and it’s true.
So there is still the need, even if the model is there and people believe that it’s true, We need to go in and get some reality check of if that is actually what’s happened. And I think that’s the part where we will always need direct measurements. And ideally we have good models and people trust them and they have enough data points. And cross-checks to really establish them as a model that the general expert domain believes is true. But I don’t think there is any way to establish this common model. Ground of acceptance without making room public.
And that’s why we probably need to funnel more money into research and development to really encourage scientists first to tackle these problems and focus on this kind of big humanity challenges. And secondly, to really incentivize people to put bread into their hands for doing the work that is not just For their individual economic benefits, but for a greater cause in a way.
Radhika Moolgavkar: Yeah, it’s almost like modeling needs to be held within the public domain. And then the use model or the creation of the carbon removal credit can be where you compete as an industry or as a whatever.
Anna Lehner: Yes, I think that’s great. And we’re just at different evolution steps of these models. In the beginning, it will be harder to do that and force people to open them, but eventually it will happen. Yeah, that’s the...
Radhika Moolgavkar: Certainly I think the EU has political and policy ability to do that in a way that’s probably very different from the US and the IP laws that we’re under. So it’ll be really, I think, fascinating to watch how the different regimes approach this. So I want to move a little bit now to talk about carbon future very like kind of directly. So know what you talked about is your one of the goals is to really automate the purchasing process to make it both easier and for buyers and sellers. So when you think about that, how do you think automation relates to MRV, especially particularly the carbon futures work?
And how are you specifically working towards that goal? Yeah.
Anna Lehner: So to address this, I think it would be easiest to look at the point where we still have pain and bureaucracy and work piling up. So I’m focusing on the bottlenecks and then we can talk about how we think we can solve. And definitely, I mean, the inherent problem is that we have a couple of standards, even if there are 10 or 15 or however many in the voluntary car market or beyond, it is a very, very small number of standards. And it must be a tremendously larger group of project developers.
We need hundreds of thousands of people doing that in order to scale carbon removals 5,000 times by mid-century. So there is definitely this one-to-many relation. And to aid there, I think we need to try... Generally speaking, allow decision-making where the information and the capacity to make decisions is. So if someone knows about their projects intimately because they’re building a factory and they know how much energy it consumes and they know how big it is, those are the parameters they can easily provide. However, they might not be familiar with the scheme of carbon accounting that’s behind some methodology up there.
Ideally, we would have an automated way of combining the input that people know about and they can easily provide it with some sort of abstraction of complexity and an optimization of those calculations or of reports. So I don’t think we will need hundreds of pages of project Design documents in future. If we have good forms that take in just the data and the bones of the data, just what we really need, and then bring it into a form that can be transported along this data trail until the certificate is issued.
So the intake of data, looking at who can provide data, What kind of data is that? And then automizing, of course, the calculations to predict the sync potential is something that can be useful, but you can already estimate how much you will get. And then you can use that for your business modeling as well. And then we can also automate the way that validation and verification is happening. We’re not quite there yet, but I have great hopes in the future. Again, I think if we put... A big map of hundreds of pages of a written PDF or so in front of an auditor, it’s hard for them to actually say that is good if it adheres to the, like if, yeah, if the data collected complies with a model that we have agreed upon, because it’s just not how a decision for a human brain works well, but we could allow machines to help with that by Yeah, doing some complete list checks or doing image or text recognition on data and really providing some of the decision-making preparation for people to speed that up.
That’s another part. Of course, linking all those different data systems and IT systems of the entities connected can be automated. We can use application program interfaces, APIs, we can link into software Systems that suppliers use to manage their business ERP systems. And that’s what we’ve been doing at Carbon Future as well. So in general, yeah, digitizing and optimizing is something that we can use all over to create a faster and more robust and efficient and enjoyable process for everyone. And hopefully eventually auditors Yeah, we’ll have some kind of a data fingerprints and maybe some kind of a hash that’s based on an open and shared model.
And they just can check if that is correct and if the data has not been compromised and they don’t have to look at each word in a PDF anymore.
Radhika Moolgavkar: Yeah, the PDFs are daunting, aren’t they? So one thing we talked about sort of harmonizing standards, and I’m also kind of curious when you How do you think about equating different types of CDR that offer different time scales with varying levels of sort of MRB sophistication in your current system? I mean, hopefully some of these problems get worked out over time because MRB becomes more, you know, better for all CDR. But right now, how do you think about that when you’re developing these end-to-end solutions? Mm-hmm.
Anna Lehner: Yeah, also a great topic to think about. I really appreciated Carby Plans’ blog post about comparing carbon removal approaches regarding their different timescales. So that’s something that comes to mind from your question is, of course, CDR happens in such different distributions over time and space. And we have, for example, planting trees or ruby, Establishing wetlands and peatlands is something that will either avoid emissions in the latter case or build up removals over decades. And the effect will finally then come into play. And the same is for enhanced rock weathering. Of course, if you spread out ultramatric rock dust that has the capacity of pulling CO2 from the air, it will just gradually build up.
And in comparison to that, if you do a biomass Pyrolysis, if you make biochar, you establish the amount of carbon that can go into a durable sink immediately. And that’s quite different. So, of course, we need to look at that and even more, as you say, The durability of the sink itself is something that we haven’t really been paying attention a lot to. And in a way, I think everything that helps us not hit tipping points mid-century is great and we should do it. And of course we should, yeah, reduce emissions where we can before all of this, just to get it out there.
But this is something that we’re just starting to work with also. In the way, if I buy a carbon sink that is good for a thousand years or 10,000 or a hundred thousand years, it doesn’t really matter too much in the economic system that we operate with because there is no way of really providing solid agreements. Or any sort of legal accountability for this kind of differentiation. So I think it’s more about the buildup time of the sink. And the second very important aspect is how does the carbon reservoir that I’m putting my greenhouse gas into, carbon reservoir in this case, CO2, how is it equilibrating with the atmosphere again?
And of course, we also have the problems of reef fluxes. So taking out carbon from the atmosphere doesn’t mean that it’s just gone. There will be refluxes from other things. And this is, again, where our models are not there yet. And in the grand scheme of things, I don’t think it matters much. We should still do that. We should establish what doesn’t cause harm and then keep doing it quickly and scaling it. And then we can work while we go to... Refine and optimize or allow our models to fit what we think is reality or is relevant there better and better.
Radhika Moolgavkar: All right, Anna, final question for you. I am curious as such a deep thinker within the carbon removal space, you know, what you think is, Five years and 10 years from now, the industry will look like. And what is your hope in helping build trust and grow this industry?
Anna Lehner: Oh, that’s a good one. So I think my biggest hope for in five years is that we figure out the buyer side standardization of claims. Right now, I think from my perspective, we’re doing a decent job of establishing what good MRV looks like for the production of credits. But then what happens with them afterwards after they’re bought is kind of, we don’t know, we could go into a marketing report, it can go into a sustainability report, but we just haven’t defined what exactly can do You can do with the claim for what, especially regarding the timescales or the time of removal from the atmosphere, matching that with the time of emission that you cause, matching it with the type of emission.
So if you have methane emissions that will not last in the atmosphere for a long time, you don’t have to compensate them with long-term costs. Sinks, but you could use something else. So having a better matchmaking between the supply side and the demand side regarding what claims can be made. And I think that definitely needs, maybe that will be the 10 year prospect. Right now we have a couple of good tools and ideas. For example, we develop frameworks of how to quantify, but we might not have all the other elements in place that really Empower or require that people use these frameworks.
Right now, a lot is still based in these voluntary carbon market schemes and we can prove that it’s working. It’s a great sandbox. We can see what people need. We can build products. We can, yeah, build how we would always to alleviate pain and build gains. We won’t really reach that scale at all if we don’t get ourselves into a compliance scheme and really have regulation either through a market system or a tax system or other kinds of instruments where I’m not an expert, but I think we need that part to really come in.
And it’s been difficult just managing the change and getting all the parties on board to make those decisions, especially in the political side. Background of the world where we live, it’s super challenging, but I have hope that we have something that is more of a coherent carbon removal policy landscape in 10 years.
Radhika Moolgavkar: Well, Anna, thank you so much for joining us today. As always, whenever we have anyone on Carbon Future, it’s an interesting and stimulating conversation. So I so appreciate it. And, you know, if you ever want to come on in the future, just let us know. Thank you so much.
Anna Lehner: It was a pleasure. Thank you for having me.
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