13 Dec 2023 | Harris Cohn
Trust matters deeply when a finished product isn’t delivered to a customer’s loading dock.
And the current system of verification for carbon credits has not earned trust. We outlined our approach to transparency in August, 2022, and since then the challenges with the prior system have become even more stark. The traditional registry and verification models improperly incentivize over-crediting and in some cases have led to outright fraud.
The Berkeley Carbon Trading Project at UC Berkeley’s School of Public Policy explained the over-crediting challenge in a September, 2023 quality assessment which found that a popular type of carbon credit “vastly exaggerated carbon savings”.
“The methodologies used to estimate project benefits and credits awarded are developed by companies and organizations that go on to use them to develop projects and sell credits. Developers benefit from selling more credits for doing less, credit buyers seek inexpensive credits, and the auditors tasked with ensuring quality have conflicts of interest because they are hired directly by the project developers.” - Quality Assessment of REDD+ Carbon Credit Projects, Executive Summary
So, how do we build something better? Fix the incentives, and raise the bar. We’re really excited to be participating in just that.
Today, Isometric released a protocol for Bio-Oil Geological Storage which they developed without any funding from Charm. Their in-house scientists brought the relevant expertise on biomass feedstocks, underground injections and life cycle analysis. We contributed our learnings from sequestering 6,420 net tonnes of CO₂e in addition to comprehensive lab data on the behavior of bio-oil in the subsurface. And the prototype protocol developed by Carbon Direct and EcoEngineers certainly laid a nice foundation.
Importantly, Isometric charges a flat fee for its services, based on tons to be inspected, not tons verified and registered. This should dramatically reduce over-crediting. Their business model aligns incentives to ensure they only issue credits for high quality, durable carbon dioxide removal.
We are also invigorated by the bio-oil geological storage protocol’s scientific rigor, which includes many operational requirements and protections to ensure the net carbon removal is secure without unintended side effects or emissions. Three examples:
These kinds of nuances in the protocol introduce a level of rigor that forces operational maturity from day one to ensure we’re delivering extremely high quality removals.
Although Isometric will become Charm’s registry of record for deliveries with customers, Charm will still track every previous and future delivery on our “Carbon Ledger”. We’re excited to use our ledger to keep setting the standard for transparency in carbon removal.
We hope the decision to use a registry and verification structure that increases trust paves the way to a more robust market. The industry needs hundreds of more buyers to enter the market, because permanent carbon removals must grow exponentially for humanity to have a shot at a liveable planet.
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By injecting bio-oil into deep geological formations, Charm permanently puts CO₂ back underground.