Carbon farming — growth and renewal

    Business Spotlight Audio 9/2022
    Forest seen from above
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    James: Trees aren’t just pretty — they can also be a source of income. Treeconomy is a start-up that focuses on connecting landowners and businesses to help companies to to offset (sth.)Ausgleich; etw. ausgleichenoffset the carbonKohlenstoff, auch: C02carbon they to release sth.etw. freisetzenrelease into the atmosphere. Business Spotlight correspondent Melita Cameron-Wood spoke to the CEO (chief executive officer)Geschäftsführer(in)CEO of Treeconomy, Harry Grocott, via Zoom. He took the call from The Microsoft Reactor, in London, as the team was participating in a hackathon at the time. Calls don’t always have optimal conditions in real life, and the background noise could happen on any call, so listen carefully because we will be testing your understanding in the following track.

    Melita: If you had to to sum sth. upetw. zusammenfassensum up the company concept in one or two sentences, could you sort of give me a little concisekurz, knappconcise summaryZusammenfassungsummary of it?

    Harry: Yeah. So, we’re a carbon removal company, first and foremost, like that’s our objectiveZiel(setzung)objective. The intent is to use carbon finance to to fund sth.etw. finanzierenfund nature restorationWiederherstellungrestoration. We plant trees, to monitor sth.etw. überwachen, kontrollierenmonitor the carbon those trees to capture sth.etw. einfangen, hier: bindencapture and then sell those carbon creditsC02-Guthaben, -Gutschriftcarbon credits. We’re making nature valuable, basically, if that makes sense.

    Melita: Yeah, yeah. OK, yeah, that’s a nice little summary there. And what were the challenges when you were first starting up your start-up? I said start too many times, then.

    Harry: [laughs] That’s fine. I mean, like everything’s a challenge. I mean every single step is quite difficult, especially when you’re trying to do something a little bit different. Like, we’re not just an app that either does some marketing or like a classic VC (venture capital)RisikokapitalVC (venture capital) start-up piece, some kind of etherealätherischethereal, like thin layer on the top. We’re trying to do something quite tangiblegreifbar, konkrettangible and physical. So there was the climate science piece: like, do we actually know how to calculate carbon? How do we do this with, like, tech stuff (ifml.)technisches Zeug, technische Dingetech stuff. You know, is it droneDrohnedrones? Is it satellites? Is there a machine learning? The technical stuff was quite difficult.

    Then there’s actually building a business model and doing the finances on that kind of thing. So, how do we actually to figure sth. outetw. herausfindenfigure out how it to monetizezu Geld werfenmonetizes? We started and were quite early, like in terms ofhinsichtlichin terms of the overallGesamt-overall market. A lot of our conversations to start with, we’d actually have to explain the whole market piece to begin with and then say what we did within that, which then often made the pitchPräsentationpitch quite extendedverlängert, hier. langwierigextended and slow. It wasn’t like a “Bang! Everyone understands what we’re talking about!”

    So, there was that kind of knowledge transfer, education piece, I think, as well with it, which has always been quite hard. And then the whole kind of funding and team-building piece is just a nightmareAlbtraumnightmare. Like the first step is just almost impossible. It has taken us kind of 18 months to finally get in a position where we were actually able to build something on top.

    Melita: How did you find the actual funding then?

    Harry: Erm, so, I mean, obviously, the other difficult bit was that we were doing all of this during lockdown and Covid. So, that was the other piece as well. But the good side of that was there was a fair amount of funding that was coming for that green recovery piece.

    The first real funding came from something called the sustainablenachhaltigSustainable Innovation Fund. So, it was a UK government thing, to be designed to sth.für etw. vorgesehen seindesigned to fund green recovery from Covid. So, we to apply for sth.etw. beantragenapplied for three of those, lost the first two, but finally were successful with our third attempt. And that gave us just over £100,000 of funding to go and prove the concept, build a bit of team and test the technology.

    Melita: And you connect ruralländlich; hier: auf dem Landrural landowners to the global carbon offset market. So, could you explain that in a little bit more depth?

    Harry: Sure, yeah, OK. I’ll start with, I guess, the carbon market side of that to begin with. So, there’s really two carbon markets. You have the complianceEinhaltung (von Vorgaben)compliance market, which is the EU Emissions Trading Scheme. And then, you’ve got the voluntaryfreiwilligvoluntary market. And the voluntary market is where we work, and that’s things like offsetting.

    So, if you fly from London to Valencia, and you to emit sth.etw. ausstoßenemit carbon, you could go and offset that. And companies are now taking action to reduce and then remove their own emissions. So every company is looking to set a net zeroC02-neutral, klimaneutralnet-zero targetZieltarget. And the “net” part of that “net zero” sort of to imply sth.etw. bedeuten, beinhaltenimplies that they’re not going to get to absolute zero emissions. They will still be emitting a certain amount, but the target is to have that neutralized to zero. So, basically, you have to offset that final part. So, you’ve got this huge kind of movement on the demand side.

    Now, the issue is where do these carbon credits come from and how are they generated? So, you’ve got this huge imbalance on supply. So, really, for our company, the idea is to go and find the people that own land. So, in the UK, that’s private landowners, but we’re starting to talk to public entityöffentliche Einrichtungpublic entities and also asset managerVermögensverwalter(in)asset managers and investors. And basically, we say you can transition your current land use from, let’s say, sheep farming — where you’re to extract sth.etw. gewinnenextracting a commodityRohstoffcommodity — meat or wool, or whatever that may be, which is often emitting CO2. You can transition that to something that captures carbon, and you’re going to get paid for it as well.

    So, it’s kind of finding this alternative land use, the idea being that you can have land and you can have multiple different income sources
    from that, which is fairly passive. If you’re looking at tree planting, you put them in the ground and make sure they’re still standing, but largely, it’s quite passive. So, then, you can become a carbon farmer, basically, is the idea. We help landowners kind of create these projects and then connect those projects into these big companies because, at the moment, there’s no stock exchangeBörsestock exchange for carbon. It’s trying to connect the dotPunktdots, basically, as part of our role.

    Melita: brilliant (UK ifml.)genialBrilliant. Well, thank you very much.

    Harry: No, not at all.

    Melita: Take care. Bye.

    Harry: Bye-bye.

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