• Proposals
  • KIP-58: Puro Biochar, Sky East Invest LTD <> KlimaDAO

Summary

The proposal is for KlimaDAO to secure 3,000 tonnes of pre-CORCs from Sky East Invest LTD for delivery in 2025 at $250,000. Sky East Invest LTD, an innovative green energy provider and creator of Easychar, allows for sustainable carbon capture in existing energy consuming businesses, offering a scalable decarbonization solution.

Motivation

This acquisition aligns with KlimaDAO’s strategic initiatives to invest in scalable, high-impact carbon capture technologies. The Easychar model, with live distilleries and capacity for significant annual carbon sequestration, provides a dual benefit of reducing carbon footprint and supplying renewable energy. The investment in pre-CORCs underpins KlimaDAO's commitment to forward-thinking environmental stewardship and supports the protocol by diversifying its portfolio into tangible, impact-driven assets.

Proposal

Secure Purchase: Finalize the purchase of 3,000 tonnes of pre-CORCs from Sky East Invest LTD for $250,000, at $83.33 / pre-CORC, ensuring the addition of high-quality carbon to KlimaDAO's asset base.

VERPA: Enter into a voluntary emissions reduction purchase agreement (VERPA) with Sky East Invest LTD at the agreed upon terms.

Strategic Partnership: Leverage the relationship with Sky East Invest LTD to explore further synergies in green energy, carbon capture, and scalable biochar initiatives.

On-chain liquidity: Use the pre-CORCs, either prior to delivery or afterwards, to create a liquid biochar market traded against $KLIMA

Financial Structuring: Align payment schedules and terms with KlimaDAO’s treasury management and Green Ratio guidelines.

Future Scaling: Assess Sky East Invest LTD’s expansion plans for additional investments and partnership opportunities, in line with the Carbon Evaluation Framework, supporting KlimaDAO's scaling objectives.

Sky East Invest LTD offers tangible benefits to distilleries in which their boilers are installed, creating a symbiotic and scalable process for carbon sequestration.

Sky East Invest LTD has completed lifecycle assessments (LCA’s) of both current installations (Bladnoch / Tamdhu), as well as for the second (Deanston and Glen Grant) and third waves (GlenDronach) of installations.

This purchase represents an opportunity for KlimaDAO to diversify its treasury into a high-impact asset class and make new environmental asset markets with this supply. This represents a highly symbiotic opportunity, and I encourage all community members to learn more about Sky East Invest LTD Easychar solution and engage with this proposal.

Polling Period
The polling process begins now and will end on Monday, February 26th. Assuming the forum proposal is approved, it will advance to Snapshot.

Proceed with purchase of pre-CORCs from Sky East Invest LTD?

This opportunity has been evaluated as per our Carbon Credit Evaluation and Acquisition Framework. Key areas of consideration are outlined below:

Methodology: Evaluate the robustness of the project's carbon credit generation methodology.
—> utilizes wood-chip pyrolysis and soil sequestration of biochar, in line with Puro's methodology. This has recently been used and is gaining acceptance and traction in the VCM. There has been far less data around this methodology compared to e.g. renewable grid-connected energy, or REDD+.

Certification Standard: Assess the credibility and recognition of the certification standards applied to the carbon credits.
→ Developers on Puro utilize variations of the above methodology.

Bridge Support: Determine compatibility with tokenization platforms that support the credits.
→ Puro bridge is in production

Market Demand: Analyze on-chain credit retirements from the previous year and off-chain market demand indicators. For example, the following off-chain data sources may be utilized:
—> Qualitative feedback from our carbon market advisors indicates that biochar carbon removal projects are seeing an upswing in retirements and demand.

Country: Consider the country of origin for geopolitical risk, local regulations, and environmental impact.
—> Located in the EU, and potentially eligible for initiatives like CBAM , the CORCs produced by Sky East Invest LTD present a significant opportunity.

Environmental and Social Impact Metrics: Review the project's contribution to sustainability and its social and economic co-benefits.
—> strong co-benefits have been outlined in the RFC above.

Spot Price: Compare the spot price with the average market price to gauge profitability.
—> Sky East Invest LTD Pre-CORCs: $83.33; Spot CORCs: $100-$180; significant opportunity for profitable procurement.

The evaluation framework has been completed below. Bold items indicate where this project has been scored.

1) Company Financial Standing:

More than 12 months of financial runway: 10 points
6-12 months of financial runway: 5 points
3-6 months of financial runway: 3 points
Less than 3 months of financial runway: 1 point

2) Security of End Market:

Confirmed buyer ready with a contract: 10 points
Demand known and buyer in negotiations: 5 points
Demand uncertain but potential buyers identified: 3 points
Demand and buyers not identified: 0 points

3) Methodology On-Chain Presence:

Methodology already on-chain with high adoption OR Methodology not on-chain but with high adoption off-chain: 10 points
Methodology not on-chain but can be brought on-chain with high potential for adoption: 5 points
Methodology not on-chain and challenging to bring on-chain: 1 point

4) Trailing Six-Month Purchase Volumes:

Purchase volumes significantly greater than the purchase amount: 10 points
Purchase volumes about equal to the purchase amount: 5 points
Purchase volumes less than the purchase amount but showing growth: 3 points
Purchase volumes minimal or declining: 0 points

5) Registry Issuance:

Registry already issuing tokenized carbon with high liquidity: 10 points
Registry planning to issue tokenized carbon with confirmed demand: 5 points
Registry not yet issuing tokenized carbon and demand uncertain: 1 point

6) Qualitative Assessments:

Strong positive trend in demand for this credit type based on market publications, data, and expert consensus: 10 points
Moderate positive trend based on market data and some expert support: 5 points
Uncertain or mixed signals regarding demand trends: 2 points
Negative trend or declining demand: 0 points

7) Project Longevity and Scalability:

Proven scalability and a clear long-term operational plan: 5 points
Limited scalability but a long-term operational plan: 3 points
Unclear scalability and operational plan: 1 point

8) Co-Benefits and Sustainable Development Goals (SDGs):

Addresses more than three SDGs with significant co-benefits: 5 points
Addresses at least three SDG with clear co-benefits: 3 points
Co-benefits or SDG alignment is minimal or unclear: 1 point

9) Verification and Monitoring (preference for distributed ledger MRV - dMRV):

Verified with scalable dMRV: 5 points
Third-party verified without dMRV: 2 points We note that dMRV may be a larger component in the future.
Self-reported or unverified: 0 points

10) Stakeholder Engagement and Social Impact:

Strong community support and positive social impact: 5 points
Some community engagement and social impact: 3 points
Minimal or no community engagement: 1 point

11) Additionality and Baseline Scenario:

Strong additionality with a credible baseline scenario: 5 points
Some additionality, baseline scenario is reasonable: 3 points
Additionality and baseline scenario are weak or not well-defined: 1 point

12) Project Type Diversification:

Project represents a new type for KlimaDAO's portfolio, enhancing diversification: 5 points
Project is similar to existing types but adds value or diversification: 3 points
Project is the same type as many existing holdings, offering little diversification: 1 point

13) Strategic Value:

Project adds strategic value to KlimaDAO (e.g., opens new markets, enhances reputation): 5 points
Project has some strategic value but benefits are not clearly defined: 3 points
Project has no clear strategic value to KlimaDAO: 1 point

Total points: 71

As per the Carbon Credit Evaluation and Acquisition Framework, this preliminary evaluation suggests that the Sky East Invest LTD proposal exceeds the minimum requirement to proceed, scoring 71 points of the required 50 to be considered a viable purchase by KlimaDAO.

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