A new platform prepares carbon removal companies to tackle the overwhelming task of managing carbon credits. Mangrove is an inventory management software that helps companies handle a variety of workflows related to carbon credits, building trust in the nascent carbon market space.
The platform was launched recently in 2022 by CEO and co-founder Brandon Vlaar, an entrepreneur that stumbled upon the issue of managing inventory and sales of carbon credits while working in the financial sector.
Brandon Vlaar answered some questions about Mangrove in an interview for Carbon Herald that gave us more insights about the platform’s purpose, functionalities, and problems it addresses.
Hi Brandon, would you tell us more about yourself?
I was previously within the tech space and imported a bank for small businesses. Part of that actually, was doing emissions modeling within our own business. I started getting to know folks in the carbon removal market, and the traditional voluntary market through that process. I got connected to some carbon removal companies last year and I basically just asked them, what are some problems that you have in your business today?
The response was that inventory management, sales, and order management was a challenge. I asked if I build this business, will you be interested in using the software. And that’s basically what we have today.
We have pilot customers using the software. Companies can use it to forecast their future deliveries, manage deliveries, and track the emissions that are associated with the specific plant and the pathway of removal.
For example, for direct air capture companies, Mangrove allows them to forecast their captured CO2 per facility, track the future removal deliveries per facility, manage their sequestration partners (removal or utilization) all while maintaining a robust audit log and history behind each credit.
What is Mangrove?
In summary, Mangrove is an inventory management tool for the carbon market. It allows companies to track their inventory from forecast to delivery.
Why did you decide to create it?
There is a need in the market for purpose-built tools to support the growth of the carbon removal market. This industry is selling trust and to do so, inventory, orders, and emissions tracking need to move from spreadsheets to robust tools that track each step of the process with detailed history and audit trails.
And who are the founders?
It’s just myself.
How does Mangrove work exactly?
It’s a software where carbon credits suppliers can sign up. They can import their projects from a variety of registries, or even non-registered projects. And then they can forecast their deliveries or credits that they’re going to be generating over different periods of time.
Afterwards, they can track their orders against those deliveries to make sure they’re not overselling a project and to ensure projects or proposals that are out to different potential buyers aren’t double-proposed.
And we do that through a holding mechanism to make sure that sales team members can only propose one set of inventory at a time.
We also support multiple types of carbon credits like voluntary credits and our clients have the ability to create their own type of credit. They can create a bespoke offering through an off-take contract. In this context an off-take contract involves users creating orders that support purchases over multiple years with different quantities and prices.
Mangrove users can bundle different types of credits into a single order with multiple projects, vintages, prices and quantities to structure unique off-take contracts.
What is the technology behind it?
Mangrove is built on modern cloud technologies and frameworks. Basically, it is a technology that will allow our users to have a really fast and simple user experience. And because this is a mission critical tool, we make sure that our infrastructure is as sound as possible.
What are the main functionalities?
Firstly, users have the ability to import projects from all of the major registries which allows them to understand all the details about those projects. Then, they have the ability to forecast the credits capacity for each project.
Users also have the ability to invite multiple team members with different permissions. So they can have sales team members, people in settlement, people in origination.
Users with different permissions can create orders, which can be proposed to different customers, adjust buffer pools, forecasts, and ensure the credits being originated are within the forecast boundaries. The software allows them to have a really detailed tracking of credits from forecast to delivery.
Beyond that, for certain types of credits, they have the ability to track what their gross carbon removal amount to the net carbon removal amount is. And that’s through a process of lifecycle emissions tracking.
The functionality allows companies to have the history of each credit. In many aspects of carbon removal, to sell 1 ton of carbon removal, the carbon removal company will need to remove more than 1 ton of carbon to account for the energy they’re using, embodied carbon of the plant/facility and any transportation-related emissions.
Mangrove allows companies to track their embodied energy and transport emissions per ton so they can correctly forecast and deliver credits that factor in their emissions to remove 1 ton of CO2.
The last piece of functionality is sales channel management. In the industry, there are a lot of different sales channels popping up. So they could be marketplaces, they could be actual, like API companies and things like that.
Right now, it’s a big challenge for these companies to manage their relationships with all of these sales channels. So we’re actually allowing sales channels to plug into Mangrove so that our customers who are the carbon credit suppliers have the ability to manage their relationship with the sales channel via Mangrove.
Credit suppliers can find new sales channels via Mangrove, establish a relationship with them and then use Mangrove’s inventory and order management technology to interface with their sales channels in an efficient way.
This is really helpful because it allows them to move their inventory to the sales channel that gives them the best terms like the best pricing, or the marketplace that’s moving the most inventory and so on.
Right now we highlight new partners and sales channels that they can sell their carbon removal through. This makes it easy for carbon removal companies to find new channels that fit their needs and ideal partner persona.
In the future, we’ll do deeper integrations with companies selling carbon removal to retrieve specific suppliers’ inventory in real-time, and share project details and MRV data to these sales channels. This will make it easy for carbon removal companies to manage the complexity, time and burden of selling on many channels.
Who are the target users?
Companies that supply or originate carbon credits. Within that, we have two broad sets of kind of ideal customer profiles. The first are companies that are dealing with carbon removal like direct air capture or biochar companies.
And then we have firms that are originating credits such as VCUs (Verra) or VERs (Gold Standard).
We’re also bringing on more partners such as credit marketplaces and carbon accounting software providers as they can connect to Mangrove’s customers.
How does Mangrove help carbon removal businesses scale?
The big thing is it gives them a structured data format for all of their inventory. Users have a rich audit and logging around all the activity happening in the forecasting, origination and sales part of the business.
This can help a lot, because if there’s ever an audit, if they’re ever doing a large investment or a large contract, they can make sure that they have right tools in place to support those contracts.
The final point is that with more government programs coming online, like the expanded 45Q program within the IRA, companies have the ability to easily report on all the data and all the credits that are eligible for those types of programs with a simple report that we offer.
Is there any planned development timeline for Mangrove? At what stage are you at the moment?
So we’re live today with a group of clients. It’s a small group but we are live. The immediate priorities for us are to do continued feature development to support our credit suppliers, to partner with more marketplaces so that our credit suppliers can sell their inventory on those marketplaces faster.
Also, invest heavily in making it easier for them to support different tax regimes and government programs such as the 45Q.
Are you looking for an investment at the moment?
Right now, the business is bootstrapped but we will be raising a round of financing in the future.
What is the long-term vision for Mangrove?
We’re building a platform that makes it easy for carbon credit suppliers to interface with compliance and tax regimes, while also making it easy for them to sell their inventory at the best price and with the best commercial terms possible.
Long term, we want to build an operating system for carbon credit suppliers.