(Updated with details of seed funding round)

A Switzerland-based digital carbon standard has decided to delay the takeoff of its biodiversity credit framework due to market uncertainties, expecting to launch the programme within the next 12-18 months.

Open Forest Protocol (OFP), a tech firm that operates as an open-source and network-based digital registry and carbon issuance platform, began working on its biodiversity framework in 2022, Aureline Grange, chief climate officer at OFP, told Carbon Pulse.

That year, the company established a biodiversity expert group to agree on the criteria for issuing a biodiversity credit on OFP, including developing a methodology. The initial plan was to issue the first batch of credits in Q2 2023.

“We established the biodiversity expert group two years ago but realised it was too early,” Grange said.

“So we decided to take a step back and see how the market evolves and what methodologies come up.”

As Grange said, OFP is now in the process of considering whether to develop its own methodology, as happened with its afforestation, reforestation, and revegetation (ARR) programme, or use one designed by a third party.

These include the methodology developed by Colombia-based Terrasos, among the first movers in the market, and the SEED Index devised by Swiss university ETH Zurich.

Once the method is selected, OFP will start onboarding projects from across the globe, with plans to establish a robust pipeline of initiatives within the next 12-18 months, Grange said.

LOOKING FOR BUYERS

“I’d say that the infrastructure is basically ready – the only blocker is the offtake,” she added.

“Before launching the methodology, we want to be sure that we have buyers. But while there’s an increasing interest among project developers in biodiversity credits, we haven’t seen real growth on the demand side.”

“We are open to any project developers or companies interested in biodiversity credits to reach out and contact us in the coming months as we prepare to launch a biodiversity vertical with the infrastructure that makes OFP unique as a digital environmental asset verification system.”

Grange said OFP is also exploring the possibility of increasing the prices of the carbon credits to be able to also quantify the biodiversity improvements within ARR projects.

“In some of them, we see an increase in biodiversity that is not yet measured, including a growth in the bird population,” she said.

“In the future, we could combine issuance of biodiversity and carbon credits in specific projects – a step that we can easily take with our infrastructure.”

COST REDUCTION

One of the company’s main focuses is to enable smaller-scale project developers to access markets by reducing project timeframes and costs while guaranteeing transparency.

“Carbon standards like Verra and Gold Standard require reporting activities that can be extremely cost-prohibitive and slow, while our infrastructure is very streamlined and does not charge upfront costs,” Grange said.

“I believe our model can also be well-suited for the biodiversity credit market, where smallholders need support in transitioning to regenerative agriculture and implementing more nature-positive practices.”

“We want this market to grow as fast as possible because it is truly needed.”

In July, Jeremy Epstein, head of growth at OFP, told Carbon Pulse that reducing upfront costs and making smaller land areas more economically viable for carbon projects will foster the uptake of carbon credit certification for ARR projects in Europe.

The standard is one of several entities behind a coalition lobbying for forestry credits to be better represented as part of the EU’s Carbon Removal Certification Framework (CRCF).

To date, OFP has 80 ARR projects registered across almost 5,000 hectares globally, and a further 76 projects in the pipeline across more than 90,000 ha, according to its website.

SEED FUNDING

The company also this week announced that it had completed a seed funding round led by Ubermorgen Ventures, with additional support from Backbone Ventures, GS Futures, and several foundations including Bloom Foundation, NEAR Foundation, and Fondation Valery.

OFP did not reveal further details including the amount of funding secured.

Since its founding in 2021, OFP has facilitated over 140 afforestation, reforestation, and regeneration projects globally through its Atlas Explorer platform, which tracks the lifecycle of carbon credits.

The protocol collaborates with national governments to scale up projects, offering an efficient, low-cost route to global carbon markets for both large national forest projects and small landowners.

By Giada Ferraglioni – giada@carbon-pulse.com

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