NH Investment & Securities Co., a leader in South Korea’s financial sector, will seek to generate new agricultural carbon credit opportunities using spent coffee grounds or cow manure from local farmers. With the move, the securities firm is looking to tap into this new segment, which is becoming increasingly popular among corporate polluters, Bloomberg reported.
The goal is to secure financing for projects that turn spent coffee grounds or cow manure into so-called biochar, a charcoal-like substance that has the capacity to absorb and store carbon when buried underground, or even electricity.
“By doing so, we are not only pushing for more sustainable farming, but also creating carbon credits,” NH executive Park Kun Hoo, who oversees the firm’s newly formed carbon finance team, said in an interview.
The investment firm can utilize the 2-million-strong network of farmers who own its parent company, Nonghyup Financial Group Inc., to provide the agricultural residues, Park was quoted as saying.
Demand in the carbon offset market is expected to grow, despite the decline in purchases registered last year, due the increasing pressure on industrial players in sectors with hard-to-abate emissions to boost efforts towards reaching their decarbonization targets.
However, some types of credits, for example those created by financing renewable energy assets, have drawn criticism, shifting the focus to alternatives such as land-based projects.
NH has already signed a deal to invest in 4EN, a Seoul-based biochar producer, aimed at generating 167,000 tons of carbon credits by 2030.