GreenCollar Group’s recently launched NaturePlus credits has triggered inquiries from companies globally, as buy interest in biodiversity units is rapidly gaining momentum but is yet to be matched by available supply.
The Australian company announced earlier this month that it has developed a methodology for land management projects designed to protect ecosystems, habitats, and threatened species, including koalas.
Around 20 pilot projects are up and running, with the first issuance expected in early 2023, to be verified and issued by accounting standard Accounting for Nature.
While the projects are all based in Australia, GreenCollar Group has been contacted from companies “all over the world” in the weeks since launch, according to Nerida Bradley, GreenCollar’s chief operating officer.
“We have had inquiries from international parties saying these are the most advanced [biodiversity] credits they have seen,” she told Carbon Pulse.
A voluntary biodiversity credit market is rapidly emerging as a potential significant contributor to biodiversity finance, and early movers are already looking to get involved.
But so far, only a handful of crediting schemes exist globally. One of those – units produced by Colombian conservation group Terrasos from a local habitat bank that trade on the blockchain-based Climate Trade – had by-September sold over 100 credits that each represents 10 square metres of land protected for 30 years.
More are underway – carbon offset standards Verra and Plan Vivo are among several organisations in the process of developing methodologies and standards of their own – but it will take time to get steady supply running.
EVOLVING
The biodiversity market is in its very early days, and there is not yet an established view on what exactly a credits should represent.
In contrast to Terrasos, GreenCollar’s NaturePlus credits will each represent one hectare of protected land, but the methodology is focused around improving ecosystem conditions on the project area, and the number of units issued will also depend on the verified improvements and maintenance.
In fact, GreenCollar has yet to publish its methodology, wanting to test and improve it in cooperation with Accounting for Nature, land-owners, and other stakeholders.
Another issue GreenCollar is still working on is exactly which claims NaturePlus buyers can make, though Bradley said they had not been developed with the existing biodiversity offset market in mind – rather it is expecting demand to come from ESG and that claims guidance will emerge over time from the government as well as international processes.
“The projects are outcome-based, developed under a rigorous framework,” Bradley said.
“The market is very new. The reason we developed these is that we don’t necessarily always want biodiversity to be treated as a co-benefit in carbon projects.”
PRICING
As carbon market participants over the past couple of years have been pushing for developers to deliver higher-quality projects, there has been increasing interest in securing registration under Verra’s Climate, Community, and Biodiversity (CCB) programme or otherwise add a biodiversity element to carbon offsets projects that can earn credits a premium in the market.
However, even CO2 credits with co-benefits selling at $20-25/tonne would not come anywhere close to sufficiently reward the biodiversity value involved.
“It’s important that the real value is established by the market rather than just tagged on to carbon,” Bradley said.
She did not want to suggest what the price of NaturePlus credits will be, but said it should reflect the cost of launching and running the projects.
“Realistically it will be fairly high. The [projects] costs are substantial,” she said.
Some of the NaturePlus project sites already have projects operating on them that earn Australian Carbon Credit Units (ACCUs) under the government’s Carbon Farming Initiative as GreenCollar is one of Australia’s largest carbon offset developers via its trading arm Terra Carbon.
There is a push globally to try and get more biodiversity gains from carbon projects, and the Australian government last year introduced a pilot scheme that allowed some vegetation-based carbon schemes in specific regions earn extra benefits from also adopting activities expected to improve biodiversity.
Australia is currently in the process of drawing up a framework for a national voluntary biodiversity scheme, the first nation in the world to do so, though it remains unclear what that framework will look like.
Bradley said GreenCollar is in regular touch with the government, but that it is uncertain at the moment whether NaturePlus will achieve recognition under the national programme.
“There is a lot of interest and a lot of momentum,” Bradley told Carbon Pulse.
“The key now is building high-integrity products. These are not quick tools to develop.”
By Stian Reklev – stian@carbon-pulse.com
