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.