• General
  • RFC: J-Credit pilot - KlimaDAO x MORI

This RFC is in response to KlimaDAO releasing an ‘alternative standards framework’ to analyze novel carbon certification and offset issuance standards.

Motivation

Our Goals
To promote KlimaDAO's vision of providing the transparent, neutral, and public infrastructure necessary to accelerate climate finance on a global scale, we will begin a pilot for J-Credits in Japan.

About Mori NFT
MORI-NFT seeks to build a decentralized ecosystem for realworld linked NFTs and carbon emission offsetting. This platform helps to reduce CO2 emissions, protect forests in Japan. Through the tokenization of forest maintenance projects, reforestation projects, and CO2 capturing, MORI-NFT enables a transparent and globally accessible market for sustainable investments. Connecting real-world linked NFTs to the digital world, new business models and communication platforms between companies with a strong desire to build a sustainable society and consumers can be created.
This allows them to start or support new projects via the MORI-NFT Platform and keeps the value within the MORI-NFT ecosystem.
In addition to their own carbon project development efforts, MORI also sources and provides J-Credits to their own clients in Japan.

Pilot Activities

Core Activities
-Utilize MORI-NFT’s J-Credit registry account to hold credits during a pilot.
-A ‘digital twin’ of held credits will be created via C3’s infrastructure.
-Tests will be conducted related to: 1) retirement on-chain; 2) API communication with MORI-NFT for reflecting retirements in their J-Credit account; 3) auditing of MORI-NFT’s J-Credit account (and exploring automations for this purpose); 4) Pooling and J-Credit pool design.
-The core infrastructure developed via this pilot will allow other entities holding J-Credits to tokenize them and utilize them across KlimaDAO’s infrastructure (importantly, they will be able to list these credits for sale via Carbonmark).

Ancillary Opportunities
-Utilize an SPV for creating a bankruptcy protected custodial entity for J-Credits. This aligns with the current structure for 2-way bridging that C3 is pursuing.
-Hosting J-Credits on a 3rd party platform, such as Carbonmark, for retirement there.

Capital requirements
-We request 35,000 USDC to fund the onboarding around 1,000 J-Credits from the absorption/carbon removal class.
-These credits will be sold via CM to our existing corporate clients.
-We believe J-Credit sales via CM can include a small fee (2-5%, which can go to KlimaDAO)
-Additionally, we can enter into a profit sharing agreement with KlimaDAO for all credits sold via Carbonmark.

About J-Credits

Under the J-Credit Scheme, the Japanese government certifies the amount of greenhouse gas emissions (such as CO2) reduced or removed by sinks through efforts to introduce energy-saving devices and manage forests, as "credit.“

This scheme, which was created by expansively integrating the Domestic Credit Scheme and the Offset Credit (J-VER; Japan's verified emissions reduction) Scheme, is administered by the central government.

Credits created under the scheme can be used for various purposes, such as achieving the targets of the Nippon Keidanren's Commitment to a Low Carbon Society, and carbon offset.

    Jun

    Thank you for posting this RFC.

    For the community’s benefit, I’d like to share a few activities and considerations relevant to this proposal and to the overall strategy of increasing the diversity of supply on-chain.

    1) Though Verra is currently the dominant carbon standard in the VCM, their market share’s decrease is accelerating. This is primarily due to the rise of more tech-enabled standards that provide buyers with more robust information concerning the impacts and integrity of their projects. Blockchain serves a purpose here as digital Monitoring, Reporting, and Verification (dMRV) solutions can provide near real-time data concerning the status of projects as information flows in. Several registries are experimenting with this, and the J-Credit registry has shown interest in leveraging blockchain technology as a foundation for new features and the potential of programmable carbon credits.

    2) J-Credits are the primary credit type used by Japanese companies, and the attitude concerning market-based climate instruments in Japan is more bullish than other markets at the moment (e.g. Europe).

    3) We have an opportunity here to display leadership in this space by being the first to tokenize J-Credits, list them for sale via Carbonmark, and have Japanese entities utilize them via new payment gateways in development. This presents a powerful case study opportunity that can help rally other stakeholders in the industry. Indeed, the pieces concerning tokenization, having a partner with a J-Credit registry account, and aligning on a data standard for listing these credits on Carbonmark are already in place.

    4) The total ask for this proposal ($35,000) is well within the remaining budget we previously outlined in the Carbon Project Development Initiative. Thus far we’ve deployed ~$1,000,000 of the $1,500,000 we envisioned utilizing to diversify on-chain supply and bring strategic stakeholders into our ecosystem.

    For the above reasons, I am in favor of this proposal. I believe it is well aligned with our current strategic priorities and presents an exciting opportunity to work with a national carbon registry in one of the world’s largest economies.

      Very cool, I'm very much in support and I think the product team will be excited to introduce another new asset to our system!

      I would have technical questions, but if C3 is the integration partner then I know things will go smoothly 🚀

      And I know it's too early to get into implementation details, but I can't help myself...

      • Any example projects you can link us to so we can get to know J-Credit projects & methodologies and how they compare to the Verra projects we already support?
      • Will there be an API or other resource we can use to source project information for our UI? Take a peek at any Project page on carbonmark-- for Verra projects we are able to provide a detailed project description, images, map and category (and soon Sustainable Development Goals).

        In general this sounds good. A question is, how NORI sees its role compared to Carbonmark going forward? Looking at NORI’s roadmap it seems that there is a digital marketplace there for 2024

          Sounds very good, I'm glad it's coming along nicely

          Good job.

          Atmosfearful
          All information on each J-Credit projects can be accessed via the official website of the J-Credit registry. However it is all in Japanese, so we will discuss with the development teams of C3 and Carbonmark how to translate into English.

          In regards to project information for our UI, we had several discussions with the J-Credit registry as well as the C3 team so far, and we have confirmed that the J-Credit registry does not provide any API at this moment and there is no plan. On the other hand, the C3 team has mentioned that there is no technical problem in linking project information and tokens without API, and they can handle J-Credit information by their scraping technology at the same level of project information as Verra's project information currently available on Carbonmark.

          Alanos86
          MORI hopes to revitalize the J-credit and VCM markets in Japan, making it easier for forest maintenance project and relevant activities. In pursuing this vision, we have many opportunities to communicate with the J-Credit registry, the Ministry of Economy, Trade and Industry, the Ministry of the Environment, and others.
          MORI will be able to support communication with the relevant ministries in Japan and help the Carbonmark and C3 development teams to consider how best to adapt to the Japanese market.

          On the other hand, the digital marketplace as described in MORI's roadmap does not marketplace of credit tokens, but rather to a marketplace of NFTs linked to ownership of forest maintenance projects. It is not directly related to this initiative.

            It looks as a good initiative, but some figures regarding points in Capital requirements should be more precise:

            • small fee between 2-5% - difference between 2 and 5 is not small
            • profit sharing agreement should also be better defined
            • Jun replied to this.

              Jun Thanks for the explanation of MORI’s role and planned marketplace. I can see clear alignment of our goals and interests and I fully support this initiative.

              cyclist
              Profit share is still in the idea stage and will be discussed with KlimaDAO members.
              For your information, please understand that the $35,000 of J-credits that MORI is requesting for this time is only to be purchased by MORI on behalf of DAO in order to create a carbon pool, and the final ownership and sales will be that of DAO.

              Supportive! Would be very exciting for KlimaDAO and Carbonmark infrastructure to be used in the Japanese market.

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