Nori is one of the leading carbon removal platforms. By working together with farmers, the Seattle-based company provides individuals and organizations with a means to purchase meaningful carbon removals and mitigate their own CO2 emissions.
We sat down with Jada Dormaier, Supply Account Manager at Nori, to discuss exactly how these carbon removals are generated, verified and sold on the platform.
We dove deeper in to also see what the entire process looks like from a farmer’s perspective and find out what the future of the carbon marketplace may hold.
Nori has its own carbon removal unit called Nori Carbon Removal Tons or NRTs. How did this unit come about? How is it measured?
The Nori Carbon Removal Ton represents a ton of CO2 that can be removed from the atmosphere for at least 10 years. NRTs are generated by farmers, who remove carbon from the air through regenerative farming practices, and once they are registered on the Nori marketplace, they can be purchased by individuals and organizations seeking to offset their emissions.
The ten-year mark made the most sense for soil carbon, as it doesn’t make sense to have a farmer signing a contract for 100 years. So, we’ve made a balance between what farmers are actually able to do and what buyers want, which is some sort of permanence. Then once credits are purchased, they are retired to avoid duplication – that is what sets Nori apart from other markets.
How is the NRT different from the Nori Token that is yet to be released?
Yes, so it should be released in 2023, but it is important to keep them separate. A lot of times when we talk about it, people start to think that they’re the same thing, but the Nori token will be payment for an NRT. The NRT is the carbon credit that will be sold and then the token, if you want to offset your emissions, you will have a token, you could come to Nori, purchase a token and pay for one NRT with one token, so one token will pay for one ton of carbon.
And the cool thing about it is that right now, in the voluntary markets, we’re paying cash. Our NRT right now is $20, but when the token launches, it’s going to have its own price discovery. So, it’ll be a freer market.
Thus, what a farmer can do is take that token and convert it to cash right away, if they’re happy with what the price is, or they can hold on to it for a year or five years, or however long they’d like, and sell it when you’re happy with what the price. Because the demand for carbon is likely to go up, the price may also follow.
How would a regular person go about buying Nori carbon removals?
You can just go to our website. We have a neat system that lets you see, for example, how much carbon would be emitted from traveling, or how much you would emit monthly or yearly. So that kind of helps you decide how much to purchase. On that same page, you can also see exactly what field your carbon is coming from.
And what does the process look like from the farmer’s perspective once they decide to partner with Nori?
First, to qualify for the marketplace, you must be in the United States, and you also must have made a farming practice change in the last 10 years. We can model a few regenerative farming practices like adding cover crops, reducing tillage, diversifying your crop rotations, adding organic matter and a few other things.
But if you do qualify, we do a feasibility study to see what the projections are, which takes a little bit of time, but the enrollment process is gathering information and giving it to a supply account manager who works with you to input all that data into the Nori carbon removals app. And once we have that information, we project your carbon credits.
At that point, a farmer can decide whether they want to go through verification.
What does the verification process involve?
If the farmer decides to go through verification, we send documents to a third-party verifier, and they’ll send a bid to the farmer. That typically costs between $3,000 and $5,000 and is paid by the farmer. The verifier then looks for evidence that there has been a switch in practice and that something else was happening before you made that switch. Then they verify that all the information you’ve given us is correct and verify land ownerships.
Once you successfully go through verification, you sign and NRT agreement, which is our contract, and it says that you’ll keep the carbon sequestered in the ground for 10 years, and that you’ll update us with data every year. So, to make sure that the carbon is being sequestered, we will continue to run the model every year to make sure that there hasn’t been a release.
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Every three years, a farmer will have to re-verify their project, again, just to make sure that there’s no release of the carbon, and that they’re continuing regenerative practices. After that, they are issued the credits that go on to our marketplace. And right now, we have what we call a FIFO market – a “first in, first out” market, which means once a farmer signs this contract, their credits sell out before the next farmers start selling.
That’ll change a little bit after the token launches. But for the most part, once the token launches, it’ll be more of a round robin. But right now, in a cash market, that’s how it works.
To clarify, you said the farmers need to send in their measurements every year. What measurements are these?
Farmers update us with what crops were planted and their practices they’ve been doing. We don’t use soil sampling, we use modeling. And the modeling tool that we use works with the data set model that is backed by soil sampling research across the United States. But what the farmers have to do is just enter what crop was planted, what tillage they’ve done on it, nitrogen applications, if there was any organic matter put on it, the tillage they used there. And from that, we can just push a button to run the model, and the soil metrics model will project the carbon credit for us.
So, to summarize, the verifier needs to establish whether there has been a change in practices. In that case, what if the farmer had been practicing regenerative agriculture all along?
A lot of the conversation that you’ll hear is about additionality. Nori is a look-back program, which is different than a lot of other marketplaces that want a change right now. And because we’re looking back, we do note if you’ve had a change of practice over the last 10 years, but nothing further than that.
We know that if somebody has been no till for 20 years, they’ve obviously been sequestering carbon, but we can’t measure that right now. Furthermore, buyers are really interested in buying newer carbon credits, which is another balance that we found between what buyers want and what farmers are able to do.
We do give up to four years of vintage credits, for instance, in 2023, we’ll be able to pay for 2019, 2020, 2021 and 2022, which is different than a few other marketplaces. So, we like to say that we are rewarding people that have early adoption, but there is a point beyond which we can’t measure those things.
The application, I assume, must be very complex, with multiple factors that must be assessed, to determine whether a farmer is qualified or not to apply for carbon credits?
Yes, it does take a lot of information, such as what was planted, what tillage you’ve been doing, all of the practices that have happened on the farm in the last years. We look back to 2000 and project all the way to 2030, because we build a baseline of 10 years prior to the switch in practice, and then compare that to whatever the switch is and find the difference between if you had made a practice change, and if you hadn’t.
So, we do have a couple of things to make it a little easier, like a bulk entering system that will allow us to use NRCS satellite imagery to see what was planted since 2000. And we do need pretty good record keeping to get all that information in.
And if a farmer gets rejected, do you offer recommendations as to what they can do to perhaps reapply again later?
Right now, as the market is, because you must pay for verification costs, that can be more costly than the money that you’re going to get for your carbon credits. So, if you have smaller farms right now, this approach might not work as well. And in these cases we would either talk about what’s coming, so that we can stay in touch and they can come back. Or if there isn’t a high enough sequestration rate, we can wait for another year and run the model again, because over time the carbon sequestration could go up. And if we have people that come to us that are maybe growing trees or something different, we’ll direct them to other marketplaces that might work better, because Nori is specific to crop lands right now.
Who is the carbon credits verifier that Nori works with?
We work mostly with Astra Global Environmental Solutions. They are an environmental auditor that has handled all of our credits so far. And moving forward, we’ll be working with a couple others too.
How scalable do you believe Nori’s approach is to carbon removals? And where do you see the carbon removal business going in the future?
Right now, we’ve had 18 farmers come through our program and Nori has paid over $1.85 million to farmers for carbon removals. That’s been in the last three years, which was great. Recently, we just signed a partnership with Bayer, and that is going to allow us to scale even faster. They’re bringing in several hundreds of thousands of acres. And so, we’re going to be able to scale in the next year quickly. We’re also making our tools more efficient.
The other thing is that Nori is carbon agnostic and we’re looking at different methodologies all the time. So, the next methodology might not be in soil. It could be any of the other methodologies that are coming forward. There’s DAC, there’s oceans, there are all these things coming forward.
We need more science and research for some of them, but Nori is looking into what the next best carbon removals methodology would be. Our marketplace will not just be soil, instead it will combine all these different methodologies at some point. And you’ll be able to buy a carbon removal from any number of different methodologies, which we think is scalable.
Since you mentioned Bayer, are there any other partnerships of similar scale that you can speak to?
We have created a partnership with Bushel before the Bayer partnership came, and that is still ongoing. We’ve made it a little bit easier for farmers who use farm logs powered by Bushel to upload their boundaries to Nori and make the process easier. Over time, we’ll be making that even more efficient so that it becomes even simpler, and we can transfer information quicker. We’re interested in those kinds of partnerships to make things easier for the farmers.
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We have created a partnership with Bushel before the Bayer partnership came, and that is still ongoing. We’ve made it a little bit easier for farmers who use farm logs powered by Bushel to upload their boundaries to Nori and make the process easier. Over time, we’ll be making that even more efficient so that it becomes even simpler, and we can transfer information quicker. We’re interested in those kinds of partnerships to make things easier for the farmers.
Thanks