Carbonfuture is among the youngest, yet fastest growing carbon removal marketplaces with a promising future ahead. Althouhg predominantly focused on biochar, Carbonfuture also offers a variety of other carbon removal methods.
In addition to its function as a marketplace, the platform is a carbon removal tracing platform with comprehensive Measurement, Reporting, and Verification (MRV) and transparent crediting, among other things .
To better understand Carbonfuture’s impact and role in the carbon removal space, we spoke to CEO and co-founder Hannes Junginger.
What is your background and what brought you to the carbon removal space?
My whole life I’ve been motivated by environmental topics. But I’m a mathematician, I did my PhD in pure mathematics, and then worked in the financial industry. And in 2018, I learned from my friend Hansjörg Lerchenmüller, who is a co-founder of Carbonfuture and a cleantech entrepreneurr, that emission reductions are not enough, and we need carbon removal.
He identified biochar as a promising technology and invested in a company to try and improve the business case and realized that it’s impossible without subsidizing the climate service provided by these activities. He then approached me, as I’m a financial mathematician, to help create a framework that represents long-term carbon removal and makes it auditable.
I immediately saw the potential and pulled in our third co-founder and friend Matthias Ansorge, who is also a brilliant mathematician, brilliant modeler and IT architect. So, we just started to form the framework in a way that we felt makes more sense and initially, not at all from a commercial perspective. We then presented the biochar framework to the science and biotech communities and got positive feedback, which pushed Carbonfuture to bring it into the industry and help the sector grow and thrive.
On the platform, there are many other carbon removal methods available like direct air capture (DAC), enhanced rock weathering, and others. Does Carbonfuture see any of them coming close to biochar in the future?
It’s clear that we will need quite a variety of removal technologies to be able to mitigate the climate crisis to a degree that is tolerable for us and future generations. And biochar alone will not do it, even though in the coming decade or so, biochar and technologies based on biomass will dominate the carbon removal sector in terms of volume, as well as from a technological maturity standpoint. I also see bioenergy with carbon capture and storage (BECCS), in particular, as very promising.
Enhanced rock weathering is also, I think, very scalable technology from an activity perspective, so you can grind the silicate rocks and distribute them on suitable land. And then I think from a technological perspective, ocean-based solutions are also very important, but extremely difficult to implement, because of all the uncertainties and regulatory difficulties.
And DAC, of course, is super important technology, but it must be seen in the context of a surplus of available renewable energy. And that’s a big the question of whether that’s so easily achievable in a reasonable timeframe, because it’s important that we never allocate fossil energy to power DAC.
How do you go about vetting projects and choosing the exact carbon removals that you make available on Carbonfuture?
We follow a very broad approach. One is the identification of types of projects. If we look at biochar as an example because we have the most experience with this solution, we always require that these projects are certifiable under a third-party standard, and having a third-party standard with the respective methodology in place sets a certain boundary.
And typically, one methodology is not applicable to all types of biochar projects: you must calculate it differently, you have different monitoring solutions, and so on. So, the first criteria is having the right third-party standard methodology in place.
Then, of course, from a business ethics or trust perspective, it’s important to support the best projects, but it’s also important do so for economic reasons. If you can bring the projects to market with good arguments as to why these are good projects, then that makes a lot of sense.
And then we have just the usual due diligence process where we go with all the questions like additionality and co-benefits. And all these hard facts like permits and questions are answered.
Can you disclose who your third-party certifier is?
Carbonfuture does two things: we have this monitoring, reporting, verification (MRV) platform and the trading system. The two are linked by the translation of the carbon removal activity into a credit, which is what we rely on a certifier for.
From the very beginning, we said we will not issue our own carbon credits or self-certify, but we will always submit ourselves under the rules and governance set by someone else to avoid adverse incentives, because we claim to be the good guys. But you need to have some structure in place that enforces that.
And we did that back in 2019, when the only proper certification scheme that existed came out of the biochar certification for the physical product, European Biochar Certificate (EBC). They amended this physical biomass certificate through a carbon removal accounting methodology, which transitioned now to a newly formed standard. It’s around one year old and is called Carbon Standards International, which is the main standard under which we operate. However, we are not exclusively bound to them.
How does Carbonfuture determine whose methodology to use?
There are some criteria and most of them are common sense. But, for example, in biochar not everybody agrees on them. But let me stick to the example of biochar. So, everybody agrees that this activity must remove carbon and you cannot emit CO2 and claim a carbon removal credit. But there are two things I believe are really important.
One is ensuring that in the case of biochar, the certification follows through to the place where the biochar will be used in the end and where the carbon will be put to rest, so to say. There are many ways to use biochar that do not promote carbon preserving like, for example, in steel production. And if you look at the prices for coal for example, you can tell at which price point it will go to steel production and at which price point it will go to biochar. So, it’s an economic rule that determines the use of biochar in a carbon-preserving way or whether it will release the CO2 into the atmosphere again, like with barbecue charcoal, for instance.
The second thing, which is even more important is that along the value chain, there are several actors who all feel entitled to claim a climate benefit. So, you really have to make sure that everybody along this value chain is obliged to not do that, because otherwise you immediately have double claiming.
Speaking of transparency and efficiency, you’ve probably come across the latest investigations, like for example, by The Guardian, that revealed an immense number of issued credits to be of low quality. What are your thoughts on that?
It doesn’t surprise me, and neither does the reaction of the people. When project owners are confronted with a criticism, they admit that the systems are not perfect. And I, to a certain extent, understand it, and I don’t want to blame these people, because I’m convinced that many of them have really good intentions, right. But there are some elements, which I really find wrong.
Especially when it comes to forestry protection, or other emission avoidance credits, I find it super important to support emission avoidance. It’s the first thing we need to do; we have to reduce emissions and avoid emissions and protect forests. But what doesn’t work is neutralizing fossil fuel emissions with an emission avoidance credit through avoided deforestation, for example, I mean, both is important not to emit fossil fuel carbon, and to protect forests, but it’s not okay to destroy the fossil carbon pool and say it’s neutralized by not cutting a tree. It’s not like for like, because it would be a lie to say that this emission avoidance credit is suitable to substantiate any climate neutrality claims. It’s just wrong.
This is something I think should be really criticized because it’s also wrong towards the buyer. And project owners say, with very good reason, that protecting forests needs financing, right? Every environmental NGO would agree that you have to protect forests, which requires money. And they welcome carbon credit money to protect forests, while on the other hand, you’re making a wrongful claim associated with the credit. And I think that is the fundamental flaw, that we are not honest with what we are actually doing, even if it’s for a good cause. This is what I criticize.
So, do you believe that reforestation/afforestation and soil carbon projects should not be viewed as carbon removal methods?
They are certainly not a suitable means to counterbalance fossil emissions. I think it’s super important to do have these projects and to subsidize them, but they’re doing much more than just sequestering carbon. Furthermore, the sequestered carbon is not stable. However, they do many more things, such as helping improve soil quality, improving food security, biodiversity, and are therefore extremely valuable. But with all of that in mind, the only value that is assigned to such projects is within a, often, low-quality carbon credit.