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  • RFC: Aither - Limenet Mineral Ocean Alkalinity Enhancement

Very exciting opportunity for KlimaDAO to move into the removals space!

I'm still learning about the details of Limenet's process, but I have some general questions so far:

  • Has the methodology actually been deployed in production yet?
  • If so, how many tonnes have been delivered so far?
  • Where is the first production plant located? I see there was a pilot site in Italy but also noted that energy grid carbon intensity isn't favorable for large scale production in Italy
  • Glad to see the methodology involves a third party verification process - have any specific third party verifiers been identified yet? Didn't see any listed on the website

Great to see this proposal.

Lots of opportunities for all involved imho.

Getting ahead of the DAC surge with these CCUS - hopefully we can start the next surge along with Limenet đź’Ş

A very interesting proposal that seems to spark a lot of positive reactions so far. However, I also see quite a substantial amount of risk for KlimaDAO in it.

Direct carbon removal methods are currently seeing a surge of business start-ups. Naturally, this means that many projects/technologies will fail and only few will achieve mass-adoption. For KlimaDAO, this means that this proposal represents a high-risk investment.

Some questions I have:

  • I strongly support @MarcusAurelius ' question regarding the scalability of the project. As for now, it seems as if only a pilot site is operational. What is the potential for scalability regarding each related processing step?

  • Additionally to the question of scalability, what is the expectation of price development in the long term? A rule-of-thumb estimate for the price difference between pilot and scaled phase can be 90%. In other words, I would expect the price to go down from the current $750-1000 towards $75-100, if the technology scales.

  • $600 000 is a steep investment for KlimaDAO at the moment and compared to the totally allocated $1.5M for forward fundings. Assuming that scalability is going to be achieved, how could the proposed offer be improved to make it viable? In simpler words, what can be done if the average price drops towards or below $600/t during the delivery period? (Here it must also be considered that these credits will have to be traded on carbonmark, so there will have to be demand at this price.)

  • The risk mitigation section mentions the possible delivery of "like tons". What exactly are these? It is important to receive an amount and type of certificates that do not represent a significant loss.

  • According to the comparison table in the proposal, the Limenet technology has the lowest amount of funding so far. What is the reason?

  • KlimaDAO should perform a demand assessment for such high-quality/high-price carbon removals. In a scenario where carbon emitting companies largely invest into renewable energies or carbon-neutral aviation fuels, it may be possible that lower-tech projects like forestry regain traction and trust. They may become a widely used basis for carbon offsetting, making the high-tech projects less relevant in the future in such a scenario.

Personally, I am hesitant with this proposal. As mentioned above, this seems to be a high-risk investment. It should not be forgotten that KlimaDAO itself is currently a high-risk endeavour. The vision is to create a scaled, frictionless carbon market with deep liquidity and efficient price discovery, where basically anyone can participate with ease. At the moment it is of utmost importance for KlimaDAO to be able to provide a supply-side of carbon certificates on its platform to achieve the goal. With the currently available limited funding, I believe that careful and rather conservative steps are a better strategy to achieve this. Unless, of course, proposals like this one help to create a strong positive marketing traction and visibility for KlimaDAO! In total, the proposed amount of $600k is a lot for KlimaDAO. A decision should be well-based and carefully thought through.

    Looking through some of the documents that Limenet links on their site, I came across this quote from https://link.springer.com/article/10.1007/s11027-023-10052-x: "The total cost to capture and store 1 t of CO2 from SMR is estimated in the range 142–189 €". How does this compare to the 600$/ton that we are being offered?

    In general I think for such a decision we need independent external advice. This view is also nicely captured by the following comment posted on LinkedIn: "I think it is worth getting some prominent scientific and legal advice about this - it's an exciting field, but there are some really important questions / unknowns / potential unintended consequences that need to be evaluated carefully. In general, I believe KlimaDAO would benefit greatly from having a multidisciplinary committee of experts across scientific, legal and ethical domains that you can engage with as you are evaluating where to play in the carbon removal space - especially when it comes to approaches as important and potentially impactful as this kind of geoengineering."

      rrrmmmmm Additionally to the question of scalability, what is the expectation of price development in the long term? A rule-of-thumb estimate for the price difference between pilot and scaled phase can be 90%. In other words, I would expect the price to go down from the current $750-1000 towards $75-100, if the technology scales

      sodiumstar Looking through some of the documents that Limenet links on their site, I came across this quote from https://link.springer.com/article/10.1007/s11027-023-10052-x: "The total cost to capture and store 1 t of CO2 from SMR is estimated in the range 142–189 €". How does this compare to the 600$/ton that we are being offered?

      I don't think this post is pertinent at all
      It's true that the data you're posting, but it refers to mass scale, not small scale
      That price will maybe be reached in decades

      I admit it might seem expensive, but this tons are sold for a much higher price as written in the proposal, and they are our way to counter the fud that we always had even from newspapers regarding low quality.
      About the third party, every proposal that was passed was scrutinized by the community and the experts of the DAO. It's how it should be. We are a DAO and we have many experts. Also the companies that are helping us are not unknown but they are well known in the space.
      I was skeptical in other deals, but there is much more documents for carrying out a due diligence here.

      I think for sure that an office hours or so, will help everyone and that it for sure should be done asap

      The budget is there, we have experts, what's keeping anyone?
      I'm all in for credits of this type from now on!

      I support this proposal.

      I am very interested in this new technology that will also help to protect marine life.

      Also, this is the first forward delivery credits for KlimaDAO and should be implemented in the future as we should support projects in this way from the beginning and increase the creation of carbon credits.

        f_taro

        Projects that have multiple co-benefits, particularly those relevant to certain sectors, are especially interesting, for sure. In this case, I would imagine companies that have supply chains linked to the ocean in some way would be highly interested in these credits.

        Regarding forward carbon, this proposal represents the 3rd opportunity KlimaDAO has been presented. Note that we have already engaged in two forward carbon deals, one with Aither for an afforestation project in Ghana, and one with StarCB for a cookstoves project in Bangladesh.

        Forward deals are generally advantageous for the DAO for two primary reasons:
        -We lock in advantageous pricing
        -We connect directly with project developers and therefore help disintermediate the flow of capital to carbon projects.

        Looking forward to further discussions here. Thank you @Aither_Carbon for submitting this comprehensive proposal!

        ⏩️ Forwarding this comment from the KlimaDAO LinkedIn page for further discussion. Thank you Christine for your contribution.

          rrrmmmmm Thank you for sharing your thoughtful analysis of the Limenet proposal. Your insights are valuable, and I want you to know that we are giving them the attention they deserve:

          Scalability: The scalability of Limenet's technology is a critical aspect, and we are closely examining it to ensure alignment with our standards. The funding we provide at this early stage is intended to help scale this technology into further production and greater environmental impact.

          Price Development: Your observation regarding potential price reduction with scaling is insightful. We are mindful of this dynamic and are considering it in our strategy - we would expect and hope that with scale comes price reduction, and our contribution will help move Limenet towards economies of scale while allowing KlimaDAO to take in high-quality inventory and own the first-ever tokenized removals once C3 brings these on-chain.

          Investment Concerns: The investment figure is significant, and we are approaching it with a well-considered strategy, taking into account various scenarios.

          "Like Tons" Clarification: We have noted the ambiguity in the term "like tons" and are seeking clarification to ensure alignment with our expectations. This clause is included in standard VERPA agreements to hedge against non-delivery risk.

          Funding Comparison: The comparison of funding between Limenet and other technologies is under review. Climeworks is has many pricing comparables, as well as the table in the proposal above.

          Demand Assessment: Assessing the demand for high-quality/high-price carbon removals is a complex task, and we are conducting a comprehensive market analysis.

          Risk Considerations: Recognizing the risks, we are conducting a thorough assessment to approach the investment with care and consideration. For every risk that is inherent in funding impact investments, there should be a commensurate reward. The tokenization via C3, the first-mover advantage, and the long window to economies of scale balance out the risks here in my opinion.

          Marketing Traction: We are evaluating the potential marketing benefits, understanding the balance between financial commitment and visibility for KlimaDAO. Aligning with big-tech will be extremely important in climbing up the market and gaining market share with impact initiatives like this.

          In conclusion, your concerns are being carefully considered as part of our evaluation process. We are approaching the decision to invest in Limenet with a clear and thoughtful strategy, keeping in mind KlimaDAO's vision and long-term goals. Your insights are an essential part of this process, and we value your contribution.

          These are answers from my perspective at KlimaDAO. More insight should also be provided as I am aware Aither plans to post a comprehensive report and analysis to questions that are being asked.

          rittaaka

          Thanks for bringing this up. It's a perspective worth considering, and to be honest, it's something we've already thought about in the past.
          While we're dedicated to the principles of a DAO and its decentralized nature, we recognize the value of structured decision-making in certain contexts. We'll keep the community updated as we delve deeper into this topic.
          However, I'd like to point out that our current approach leans heavily towards decentralization, in line with the principles of a being a Decentralized Autonomous Organization. The ethos of a DAO promotes distributed decision-making and collaboration without centralized control, and that's precisely what we're aiming for, and what we always achieved.
          That said, we're absolutely in favor of enriching our collective with expertise. We'll be looking to collaborate with more professionals and experts as we progress. But, as we do that, the goal is to integrate them into our decentralized model, ensuring that we maintain the balance between expertise and our core philosophy.
          Once again, thanks for your insights. This kind of discussion only strengthens our community!

          At Aither, we firmly believe that all decisions should be informed decisions. In our pursuit of transparency and clarity, we have actively gathered feedback from our community and contributors. The following list of Frequently Asked Questions (FAQs) is a testament to our commitment to provide comprehensive insights into our collaboration with C3/QC3 and KlimaDAO. We hope this information will empower you with the knowledge you need to understand our vision, technology, and the path we are forging together.

          What is the date of generation of the forward removals proposed in the RFC?
          Within 12 months.

          If we have a buyer tomorrow can we sell the credits to them? How do we do this?
          If there is a need, it is possible.

          If no end buyers are found before the generation and retirement is the environmental benefit exhausted?
          No, like any carbon credit the benefit is exhausted once the credit is retired. The difference lays in the aspect that in the case of this technology you only get the credit issued once the tonne is effectively captures and stored and this is certified

          There is a new verification protocol being developed compliant to ISO 14064-2, what are the timelines on the completion of evaluation by RINA of this verification protocol?
          ~ 12 - 18 months. If review & revision is needed - longer.

          Who is performing the verification?
          Limenet has decided to go with RINA because of its long-term history on Naval and Marine auditing. It is also the oldest verification Body worldwide and the most widely accredited verifier of carbon standards and methodologies globally

          How is the data collected and verified by RINA being recorded on chain? Can you clarify the dMRV aspects of this project and the role of C3/QC3 in facilitating that? Will KlimaDAO have an opportunity to stream in some of this project integrity data to a project page set up on Carbonmark for these Limenet credits?
          “To give maximum transparency to our action, we decided to develop, using the blockchain, a method of tracking negative emissions through all the steps of the process. In other words, we have created a virtual mirror of Limenet technology by making the computers (PLCs) of the plant communicate with decentralized databases tracing every operation on Polygon (Ethereum second layer). Our negative emission certificates are realized through a minting of NFT certified by a third party via MRV (monitoring reporting and verification).”
          This is an ongoing discussion - we can collaborate and have this data available on-chain.

          What information is available to trace the impact of the Limenet project?
          See scientific document & https://limenet.tech/en/patents/

          We are promoting the Limenet project in webinars and via sales appointments. What happens if a client we prospect then calls Limenet direct for pricing/ purchase information as part of their buying process?
          MOQ for direct Limenet sales is 2000+ tCO2
          We do not sell to firms practicing circumvention.

          How had price discovery occurred to price the Limenet removals at $600 USD per tonne? What data points are being used to determine the ask price in the RFC?

          Has the methodology actually been deployed in production yet?
          Limenet is in production:
          Methodology speaking, Limenet is developing its MRV (monitoring reporting and verification https://limenet.tech/en/mrv/) protocol according to ISO 14064-2. This protocol will be verified by a third-party firm (https://www.rina.org/en) as soon the production plant will be “on-line”.
          The methodology Limenet is following to make accounting for its carbon credit is CCS+ Verra https://verra.org/methodologies/methodology-for-carbon-capture-and-storage/.

          Where is the first production plant located? I see there was a pilot site in Italy but also noted that energy grid carbon intensity isn't favorable for large scale production in Italy
          The first pilot plant is located at La Spezia Italy. The first of a kind pilot, will be located in Taranto (south Italy).
          Limenet will buy only 100% renewable electricity from the grid and will do an LCA to understand its impact and be able to know the net CO2 that could be issued as a carbon credit.
          Right now, Limenet has developed its LCA done by Politecnico di Miano (https://limenet.tech/en/lca/) and, according to 100% renewable in Italy, the inefficiency is around 10%-15%. (for instance, in Norway this value is less than 10%).
          To deploy nth of a kind plant, Limenet will go where the LCOE, and its carbon footprint will be cheap and low (See https://limenet.tech/en/industrial-scalability/).

          How many tonnes have been delivered so far?
          Limenet captured and stored CO2 gross at its facility plant at La Spezia (Italy) in 2022 https://limenet.tech/en/trl-6/. This pilot plant was used to scientific purposes.
          Limenet is now building a first of a kind pilot plant able to store from 4k (4 modules) up to 16k (16 modules) tons per year of biogenic CO2 coming from Olive crops in Taranto (south Italy).
          This is the first production plant that will be ready to deliver tons by Q2-3 2024. In parallel Limenet will work with third party evaluator RINA to be compliant to ISO 14064-2.

          Given the buyer may be using reporting frameworks such as CDP, how do the Limenet removals and associated tokens fit into these frameworks?
          CCS+ methodology for removals is being used
          These credits can only be used for the residual emissions.
          For scope 3 you have a mandate to use removals. These would be perfect for these.

          What is the potential for scalability regarding each related processing step?
          The technology that Limenet proposes to KlimaDAO is BOAE (Buffered Ocean Alkalinity Enhancement); this is a novel approach of the well-known OAE (Ocean Alkalinity Enhancement). Those methods require Limestone and seawater as main raw materials to produce calcium bicarbonates.
          According to different studies: https://agupubs.onlinelibrary.wiley.com/doi/10.1029/2021GB007246 ; https://agupubs.onlinelibrary.wiley.com/doi/full/10.1002/2016RG000533 and more, alkalinity enhancements have the potential of different Gtons of CO2 stored per year. This is because the ocean has a potential of thousands of Gtons of carbonates and bicarbonates. This is way more than any other CO2 storage solution, such as geological storage.
          For more information, you can see: https://limenet.tech/en/industrial-scalability/
          Additionally to the question of scalability, what is the expectation of price development in the long term? A rule-of-thumb estimate for the price difference between pilot and scaled phase can be 90%. In other words, I would expect the price to go down from the current $750-1000 towards $75-100, if the technology scales.
          Limenet is assessing a TEA (Techno Economic Assessment) with Politecnico di Milano and Heriot-Watt University to evaluate the cost of TRL9 advanced plant of CO2 stored. This work was done previously with BAWL (Buffered Accelerated Weathering of Limestone) and was published in this article: https://link.springer.com/article/10.1007/s11027-023-10052-x. BAWL is a previous technology of Limenet and not as effective. The cost for Limenet will be way cheaper in the future like Any other technology existing today. But at present the average cost for this type of tech is way above 600 USD and more in the range of 1000 USD. Price will decrease but this will take years.

          $600 000 is a steep investment for KlimaDAO at the moment and compared to the totally allocated $1.5M for forward fundings. Assuming that scalability is going to be achieved, how could the proposed offer be improved to make it viable? In simpler words, what can be done if the average price drops towards or below $600/t during the delivery period? (Here it must also be considered that these credits will have to be traded on carbonmark, so there will have to be demand at this price.)
          Limenet’ analysis sees that for the first-of-a-kind pilot plant, the price will not decrease (low economy of scale). This decrease will be for the next nth-of-a-kind that will be developed after (2026-2028). The price will be cheaper for carbon credits because of the higher economy of scale.
          The risk mitigation section mentions the possible delivery of "like tons". What exactly are these? It is important to receive an amount and type of certificates that do not represent a significant loss.
          Limenet will provide third-party evaluator analysis and certification (RINA https://www.rina.org/en) to buyers for the correct delivery of carbon certificates.

          According to the comparison table in the proposal, the Limenet technology has the lowest amount of funding so far. What is the reason?
          The reason is that this is a new approach of Mineral Ocean Alkalinity Enhancement that is not yet known by the public.
          KlimaDAO should perform a demand assessment for such high-quality/high-price carbon removals. In a scenario where carbon emitting companies largely invest into renewable energies or carbon-neutral aviation fuels, it may be possible that lower-tech projects like forestry regain traction and trust. They may become a widely used basis for carbon offsetting, making the high-tech projects less relevant in the future in such a scenario.
          According to the 6th IPCC report, we must rely on long-term CO2 storage techniques (Limenet is between 10k- 100k years) that are unaffected by climate change.
          Unfortunately, forestry is not permanent forever and cannot be considered a permanent storage solution for CO2. The Latter is highly subjected to climate change such as fires, drought.

          Can we perform additional technical assessment and gather more expert academic opinion(s)?
          It is possible to ask universities, research centers and experts to evaluate BOAE technology developed by Limenet.

          Here are the references:

          Politecnico di Milano

          With them, Limenet founder (Giovanni Cappello) has also published and reviewed different scientific papers: https://limenet.tech/en/scientific-papers/

          With the following research group (5,6,7), Limenet has brainstormed ideas and thoughts about the BOAE approach for future research together. They know Limenet and Italian research groups and the BOAE approach; hence, you can ask them for opinions or references.

          Geomar

          Limenet also has institutional stakeholders. In particular, EuLA (European Lime Association). With them, Limenet wants to make recognition by the EU ETS directive, calcium bicarbonate as permanent storage.
          Eula

          Aither would like emphasize again the importance of transparency and to address all the questions from the community regarding our proposal for new technology. All the community and experts must be convinced before making any decisions.
          Aither had a long call with many KlimaDAO contributors and members, and here we can summarize further questions and answers that we’ve received.

          How can you justify the purchase of these newer, less adopted, and therefore riskier credits?
          Some people expressed uncertainty and concerns about moving forward with the RFC due to lack of experience in a new market. There are worries about unknowns, questions from potential buyers, downward price pressure as the tech scales, and the success of the venture. Liam emphasizes that while he is not negative about it, he wants to address his anxiety.
          Aither highlights the importance of addressing buyer questions as they arise and being prepared to provide answers and continuous support. He also shares an example of another carbon removal company and their high costs.(EBB Carbon)
          Aither discusses the price decrease and financing options for ocean alkalinity units. He mentions that while the process is energy-intensive and costly, it can be scalable through modular approaches.
          He also compares LimeNet's position, which has already gone through the pilot phase, to other carbon capture technologies. Jacopo emphasizes that steep decreases in prices do not guarantee delivery of tons and highlights the need for a reputable registry or blockchain technology to certify removed tons. He suggests partnering with Klima and C3 to create a tradable market for carbon capture credits. This is a tremendous opportunity for all parties involved.

          How will these credits be traded in the market?
          They will be tokenized via QC3.
          From an end-user perspective, we emphasize the importance of including various types of carbon credits in a portfolio for carbon neutrality strategies.
          Buyers are requesting mixed portfolios with different types of carbon credits, and we stress the value of a diversified approach.
          Blockchain is, in fact, an instrument that can enable transparency and you know, certifying removed tons. C3 and Klima can help with that. And I also think that ecosystem was at the forefront tokenizing tons and it also enables the first tradable instrument
          Up until now there are no DAC, tradable instruments.
          There is a removal of tradable instruments, which we can include in forestation projects or buy a chart projects which do release I'm thinking, Pre-orders of the corks and so on, but there's no direct air carbon capture credits, which are being traded around right. In this case, Ocean alkalinity or ccus or CCs plus credits being traded to traded around.

          How will this trading be tracked?
          There is potential for collaboration between Klima, C3, and other companies to establish standards for tracking data on-chain in order to ensure transparency in carbon offset projects.

          What do KlimaDAO and C3 bring to the partnership?
          QC3 is perfectly positioned as a blockchain technology provider. KlimaDAO as liquidity provider. Limenet as scientific specialists and plant operators.

          How will these be verified?
          Drew raises questions about the verification process for carbon removal credits, which leads to a discussion of token issuance and retirement benefits. The polygon blockchain will be the de-facto registry. QC3 will be the tokenizer.

          Are there technological concerns when this project increases its scale?
          Potential pushback regarding geoengineering is mentioned, particularly in relation to coastal marine areas and transportation logistics. The co-benefits of enhancing ocean capabilities for capturing CO2 are highlighted compared to other technologies like direct carbon capture or biochar.
          Considerations about potential negative effects on shellfish growth due to partial CO2 release are brought up as well as solutions involving equatorial aqua systems and municipal waste water purifiers. Marcus Aurelius mentions reviewing scientific research on the potential impact and complexity that may limit scaling initially.

          What similar projects exist on the market?
          So there's also very little pure comparison that can be done. I have one that I can share with you now but Of course, it's, you know, we're at a stage where it's a new technology. (EBB Carbon)

          How long is the environmental benefit? Is it like biochar? Is it a hundred years, 500 years, or something?
          Yes, it's more than 10,000 years but it's uncertain if it can go up to a hundred thousand years. The truth is that there's no studies as you can imagine. So regarding that time frame, we can certainly say it’s greater than 10,000 years but the scientific articles that I shared by the way can not certainly guarantee that the 98,000 year benchmark is absolutely accurate. Over 10,000 years, under 100,000 years, around 98,000 but can only confirm
          So there's a number of studies where they try to accelerate the composition of the effects into salt water. And this of course, and again, we're talking about simulations. They go from a minimum of 10,000 years up to close with a hundred thousand. We're closer to 98 if you read the articles 98,000 years but again, these are simulations. What we're sure of is that it's north of 10,000 years. That's that, yes, because it's a normal geological cycle that you're basically recreating. So, we're safe for 10,000 years. We wouldn't feel comfortable saying more than 10,000 years to be extremely honest.

          Is this a one-off purchase between a buyer and a broker, or the start of a long-term partnership?
          This is the beginning of a long-term partnership.
          Aither will provide continuous support through the process, including education on scientific and carbon-market aspects, client outreach to ensure a seamless experience, and strategies for continuous growth. Support from Limenet will also be ongoing, along with continuous assistance from C3 and KlimaDAO through the blockchain tokenization process.

          How does Limenet’s solution compare to other options like DAC?
          What we liked at Aither about this technology, compared to others that I've seen, is the fact that we're hitting on the largest carbon sink that we have on our planet.
          So, basically storing carbon there and all that, while enhancing the ocean capability to capture more CO2, to us, is literally two birds with one stone. And that was why we were attracted to this type of technology more than I was to others. These types of technology have a plus compared to others.
          It enhances a natural process while the others are pure tech-based technologies.

          Being a first mover has advantages, but it also has risks. How are we approaching these?
          There are two things. KLIMA being the first to buy gives a strong signal to the other buyers, which will come for the next ones. This also means that KLIMA is the first believers in it.
          Second, not being a secondary market, it'll happen on Carbonmark for the first time, and it'll be an advantage for carbonmark too.
          When the interest of this product will spark, the first platform will be carbonmark.
          It also shows that KLIMA is attracting other innovators in the climate finance space to build the the carbon market of tomorrow.

          We are available for more information and answers to more questions that will come

          Interesting and well-prepared proposal from Aither/Limenet.

          Commercially not so sure if it is beneficial, given the inverted forward CDR price curve environment. However someone still needs to finance R&D, and KlimaDAO can stand out here. It's an important signaling to support early innovation in durable CDR, similar to Frontier Advanced Market Commitment. I also like the digital native registry of credits approach, yay!

          Hard to judge on the the risk being not an expert in BOAE: independent research is needed to assess the solution's safety for the environment, especially when applied at scale.

          Overall, very important development at KlimaDAO, which I personally admire.

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