At COP29, one message rang loud and clear: the money isn’t flowing fast enough. After intense negotiations, developed countries agreed to mobilise $300 billion per year through 2035 to help developing nations tackle climate change. But that’s far below the estimated $1.3 trillion per year that low- and middle-income countries say they need to stay on track. 

This growing finance gap raises an urgent question: how can we unlock new sources of funding to meet the scale of the challenge? One powerful answer is carbon pricing, a mechanism that turns emissions into a cost, and climate action into a market opportunity. By placing a price on carbon emissions, it creates the incentive and financial logic for companies and governments to reduce their footprint and invest in climate solutions. 

At the centre of this mechanism is the carbon credit, a unit representing the reduction or removal of one tonne of CO₂ or its equivalent. These credits are traded in compliance and voluntary carbon markets. And while the carbon market has faced its share of challenges, it is rapidly evolving and increasingly recognised as a tool that can move money where it’s needed most. 

But success isn’t guaranteed. Issues like over-crediting, unclear baselines, weak co-benefit integration, and upfront cost barriers have all slowed progress. If we want to harness the full potential of the carbon market, we need to get serious about quality, credibility, and strategy. 

At HAMERKOP, we’ve worked on over 150 climate finance assignments across more than 50 countries. From this experience, we’ve distilled six principles that can help project developers design and deliver carbon projects that not only reduce emissions, but also command higher prices, attract the right buyers, and deliver lasting impact. 

1. Understand the demand for your type of carbon credit 

Just like in any market, the price of carbon credits is influenced by supply and demand. In the voluntary carbon market, demand is largely driven by the growing number of global companies making net-zero commitments and seeking to offset their residual emissions. These pledges are translating into real purchases, particularly during companies’ annual carbon credit retirement cycles, when they retire credits to meet their public climate goals. 

A strong example of this trend is Google’s US$200 million pledge to Frontier. Frontier is an initiative that secures long-term demand for carbon removal technologies by supporting project developers with early financial certainty. Through this commitment, Google and other backers are helping ensure that the market continues to move toward high-quality, permanent carbon removal solutions. 

However, demand is not uniform or guaranteed. It fluctuates based on broader economic conditions, regulatory changes, internal decarbonisation progress within companies, and the shifting relationship between voluntary and compliance carbon markets. For project developers, understanding these dynamics is essential in order to align their efforts with where the market is heading. 

Before investing in a project, developers should assess where demand is strongest and what buyers are actually looking for. This includes identifying whether current interest leans more toward removals or reductions, which social and environmental co-benefits are valued most, and which geographies are emerging as high-potential regions. Market platforms such as Climate Impact X offer real-time insight into buyer preferences, while reviewing requests for proposals and engaging with buyers or intermediaries early on can provide strategic direction. 

Selecting the right carbon standard and methodology is equally important. As the Integrity Council for the Voluntary Carbon Market continues its work to define “high-integrity” through its Core Carbon Principles, buyers are increasingly favouring credits aligned with these criteria. Projects that meet these emerging expectations from the outset are more likely to attract serious interest and secure better prices as the market shifts toward greater transparency and accountability. 

2. Design for co-benefits, not just carbon

The carbon market is evolving quickly, and so are buyer expectations. It is no longer just about how many tonnes of CO₂ a project can reduce or remove. Increasingly, buyers are asking what else the project delivers. Projects that provide environmental and social co-benefits such as improved local livelihoods, restored biodiversity, or progress on gender equality are viewed as higher quality and are more likely to receive a premium price. 

These “beyond carbon” contributions are increasingly seen as indicators of both quality and ambition. Buyers and investors are actively seeking projects that align with broader sustainable development goals. In response, many developers are adopting more holistic approaches that place greater emphasis on social, biodiversity, and wider environmental outcomes. This is reflected in the use of methodologies with more rigorous baselines, monitoring systems, and safeguards to ensure these co-benefits are credible and lasting. Some are also leveraging emerging technologies to enhance transparency and traceability. 

These co-benefits can also be formally recognised through co-certification schemes. Climate, Community, and Biodiversity Standard (CCB) Sustainable Development Verified Impact Standard (SD VISta) allow projects to demonstrate their wider impact. These labels help build trust with buyers and can justify premium pricing. 

Designing for co-benefits is no longer just a nice-to-have. Particularly for nature-based projects, it is a smart strategy in a market increasingly values credibility, inclusiveness, and long-term impact. Projects that can show clear, measurable benefits beyond carbon will have a stronger position and greater appeal as expectations continue to rise. 

3. Think strategically about offtake agreements vs. spot transactions 

The way you sell your carbon credits can have a major impact on your project's financial sustainability and long-term success. Developers typically choose between two main options: spot transactions or offtake agreements. Each approach has its own benefits and challenges. 

Spot transactions involve selling credits at the current market price, providing immediate income and greater flexibility. This can be useful for projects seeking short-term cash flow. However, spot sales expose projects to market fluctuations, making it harder to predict revenue and plan for future operations or reinvestments. 

In contrast, forward purchase agreements and long-term offtake deals offer more financial stability. These agreements secure a buyer or group of buyers at a fixed price for credits delivered over several years. The predictable income helps cover early-stage costs, ongoing expenses, and can even support pre-financing strategies, such as loans or grants backed by future revenue. This model is especially beneficial for projects that are capital intensive or in their early stages of development. 

It is also important to consider the type of buyer. Aggregators, brokers, and large corporate purchasers can streamline transactions, reduce negotiation burdens, and broaden market access. However, selling directly to an end buyer can increase margins and foster stronger partnerships, particularly when the buyer’s values align closely with the project’s goals. 

No matter the sales strategy, transparency is essential. Clear delivery schedules, contractual terms, and alignment with the buyer’s sustainability objectives help build trust and credibility. This not only supports the immediate sale but also enhances the project’s reputation and resilience in the evolving carbon market.  

4. Stay ahead of compliance trends

The line between voluntary carbon markets and compliance markets is becoming increasingly blurred. This convergence is opening up new opportunities for project developers while also raising the bar for quality and credibility. 

As the global carbon landscape evolves, new frameworks are reshaping how credits are issued, certified, and valued. Key initiatives include Article 6 of the Paris Agreement, Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), and integrity-focused platforms such as the Integrity Council for the Voluntary Carbon Market (ICVCM) and the Voluntary Carbon Markets Integrity initiative (VCMI). Buyers are now looking for credits that come with additional certifications or labels, which indicate that the credits meet emerging standards for environmental integrity, transparency, and compatibility with future compliance use. 

Although many host countries are still setting up systems to implement Article 6, demand for high-integrity credits is already growing. Governments, airlines, and institutional investors are preparing to source credits that meet international compliance requirements. These credits are expected to trade at higher prices because of their added credibility and potential regulatory value. 

Some countries have already built formal links between voluntary and compliance markets. Singapore allows companies to offset up to five percent of their carbon tax obligations using approved international voluntary credits. Other jurisdictions such as Colombia, Chile, South Africa, and California have created compliance programs that accept certain emission reduction credits. These hybrid systems are strengthening market confidence and encouraging the development of compliance-aligned VCM projects. 

Meanwhile, integrity initiatives such as ICVCM and VCMI are playing an increasingly influential role in the carbon market. By setting clear criteria for what defines a high-quality carbon credit and how such credits should be used, these organisations are shaping market expectations and buyer behaviour. As a result, credits aligned with frameworks like ICVCM are seen as more credible and are better positioned to attract premium prices. 

For project developers, this convergence represents both a challenge and an opportunity. Looking ahead, aligning with compliance-grade methodologies and securing recognised third-party certifications may significantly increase a project's value and future-proof it in a rapidly changing market. 

5. Promote your project with purpose and precision

In the carbon market, how you communicate your project is just as important as how you design it. Clear, credible communication shapes how buyers perceive your project and can significantly influence how much they are willing to pay for your carbon credits. 

Buyers are not only purchasing emissions reductions; they are investing in a story. Projects that effectively highlight their co-benefits and broader environmental or social impact tend to stand out. Whether your project restores degraded landscapes, empowers communities, or protects biodiversity, presenting these elements through a compelling narrative attracts buyers who value integrity and are often willing to pay a premium for it. 

However, storytelling alone is not enough. Credibility matters. The voluntary carbon market has faced growing scrutiny, with several high-profile controversies casting doubt on certain project types. Even high-quality projects can be overlooked if they are not understood or trusted. In this environment, buyers are exercising greater caution and placing more emphasis on transparency, independent verification, and solid governance structures. 

This shift in buyer behaviour presents an opportunity. Projects that prioritise strong communication, pursue recognised certifications, and actively engage stakeholders can build trust and stand apart in a crowded market. By clearly demonstrating impact and positioning your project as part of the solution, you enhance its credibility and increase the likelihood of securing premium pricing for your credits. 

6. Demonstrate low risk and build market confidence

As the voluntary carbon market becomes more mature, transparent, and focused on quality, the role of risk perception in pricing is growing rapidly. Buyers are becoming more selective, and they are rewarding projects that can clearly demonstrate credibility, integrity, and low exposure to risk. 

One of the clearest indicators of this shift is the rise of carbon credit ratings. These ratings directly influence how credits are priced. Projects that receive high ratings based on factors such as quality, permanence, and additionality are more likely to attract premium pricing. In contrast, projects with lower ratings may struggle to find serious buyers. For developers, earning a strong rating can improve market visibility and send a powerful signal to prospective partners. 

At the same time, price transparency in the market is improving. More platforms are making credit benchmarks publicly available, allowing developers to better assess the market value of their credits. This shift supports fairness and reduces the influence of speculation or misinformed pricing, especially for high-integrity projects. 

Reputation has also become a key differentiator. Corporate buyers, in particular, are under increasing pressure to avoid the reputational risks associated with greenwashing. As a result, they are gravitating toward projects that can demonstrate clear additionality, measurable co-benefits, and robust third-party monitoring and verification. These qualities help position a project as trustworthy and align with what buyers now expect from responsible investments. 

The conclusion is clear. In a market where quality and credibility drive demand, demonstrating your project’s low-risk profile is no longer a nice-to-have. It is a strategic advantage that can improve market access, build buyer trust, and support stronger credit pricing. 

Final Thoughts

The voluntary carbon market is evolving quickly. While challenges remain, there are growing opportunities for project developers who are strategic, transparent, and focused on delivering meaningful impact. 

By understanding buyer demand, designing projects with co-benefits, adopting strong financial strategies, aligning with compliance frameworks, communicating with credibility, and managing risk effectively, developers can unlock real value and stand out in the market. 

At HAMERKOP, we help developers and investors build high-quality, investable carbon projects across all major standards and sectors. Our work spans REDD+, blue carbon, energy access, biochar, agriculture, agroforestry and reforestation. We are committed to helping you translate ambition into action and deliver measurable, lasting results. Get in touch to learn how we can support your next climate initiative. 

Further Reading

• Abatable article on credit pricing  

• GS why do prices vary?  

• Sylvera – price of carbon  

• What is a carbon credit worth?  

• Supply and demand in the voluntary carbon market | S&P Global Commodity Insights (spglobal.com) 

• Removal, reduction, and avoidance credits explained | Carbon Direct (carbon-direct.com) 

• Carbon removals vs avoidance: A dangerous distraction (sylvera.com) 

• Carbon Credits framework comparison across Singapore, Malaysia, and Indonesia  

• Green Finance: Voluntary Carbon Markets in ASEAN, challenges and opportunities for scaling up - GOV.UK 

• Aiming to Achieve Net-Zero Emissions - Google Sustainability 

• Establishing Price-Rating Correlation for Carbon Credits | BeZero Carbon 

• State of the Voluntary Carbon Market 2024: On the Path to Maturity. Ecosystem Marketplace 2024. 

In 2024, HAMERKOP had 3 interns join us and go on to become full time members of the team. We asked them each to write about their experience.

Maëna Raoux

Arriving at HAMERKOP: a search for integrity in carbon markets

When I joined HAMERKOP Climate Impacts as an intern, I had just completed the final modules for my master's program in Climate Change Management and Finance at Imperial College London. I had moved to London for this program, and it required a work placement to complete the degree.  

Prior to my master’s, I had spent over a year and a half analysing corporate sustainability strategies and commitments as a sustainability analyst at EcoVadis in Paris. That role had given me a front-row seat to the good, the bad, and the greenwashed in corporate climate efforts and when it came to carbon markets, I wasn’t really sold. The market’s mechanisms, the permanence of nature-based solutions (NbS), and the motivations of corporate players investing in these markets all raised questions for me. Were carbon markets genuinely effective in mitigating climate change? Were they a necessary pathway to achieving global net-zero ambitions, or merely a tool for corporates to improve their reputations with minimal substantive change? My scepticism stemmed from some of the challenges I had observed and learnt about the fragility of permanence in NbS projects and the risk of greenwashing and over crediting that has loomed over the market. While not new, these critiques are particularly relevant and made me want to experience the industry and market firsthand. I soon realised I wanted to work in an environment where I could engage critically with carbon markets.  

As an organization that does not tie its payment structure to carbon credit generation and can therefore provide advice based on a project’s quality and the market’s direction, HAMERKOP stood out to me. I considered their independence as essential to ensuring that my work would not only be meaningful but also allow for the kind of nuanced, critical engagement I was seeking. I also recognised that in an environment where carbon markets are being scrutinized, the availability of technical and science-based advice on what constitutes high-quality and high-integrity credits, is more important than ever. This is exactly why I was eager to join HAMERKOP. 

Working at HAMERKOP: gaining insights and developing new skills  

My first day at HAMERKOP was very welcoming and the days that followed provided me with the time to learn and ask questions as I met with each member of the team individually, getting to know them as well as the work they were involved with. During this period, I was encouraged to ask questions, dive into the work at my own pace, and contribute to a variety of tasks. Some assignments were operational, while others involved direct client deliverables. Among the various tasks I was involved in, my favourite assignment was conducting due diligence for corporates interested in investing in carbon projects. This sometimes almost felt akin to detective work – uncovering potential risks and red flags while meticulously assessing projects’ carbon potential and socioeconomic impacts. I was particularly drawn to projects that went beyond carbon to deliver broader development benefits and incorporate local stakeholder consultation and benefit-sharing mechanisms into their design. 

Parallel to my internship, I worked on my master’s final report, which examined the issue of permanence NbS carbon projects. Specifically, I analysed how existing buffer pools in the Voluntary Carbon Market (VCM) are inadequate in guaranteeing permanence and making the case for in-kind insurance as a potential solution. This research also developed my interest for robust monitoring, reporting, and verification (MRV) systems, particularly those that include non-carbon metrics to ensure long-term project integrity. 

HAMERKOP also helped me develop my understanding of geospatial analysis – an area I had always appreciated but never had the chance to explore practically. In fact, various projects that I have been working on directly demonstrate the relevance of remote sensing techniques in understanding the land use and land cover change (LULC), monitoring deforestation and degradation rates, but also as a tool to estimate biomass and carbon stocks by analysing parameters such as vegetation cover, tree height and tree density. I have particularly enjoyed being immersed in an environment where I am constantly learning and being exposed to new challenges that are key to resolve to ensure the development of high impact and high-quality carbon projects. 

As my internship has come to an end, I am now excited to join HAMERKOP’s full-time team. The past months have not only deepened my technical expertise, especially in NbS projects and carbon metrics, but have also given me a much more nuanced perspective on carbon markets. While my initial scepticism hasn’t yet fully disappeared, it has evolved into a more balanced outlook, informed by hands-on experience and a deep appreciation of carbon markets’ complexities. I now look forward to further developing my understanding of NbS projects by learning alongside my colleagues who are experts in this field. 

Solène Kechavarzi

My Internship Experience at HAMERKOP  

When I first joined HAMERKOP as an intern, I knew I was stepping into a world that was both exciting and unfamiliar. Coming from a background in Biological Sciences, with a specialization in Biodiversity and Conservation, I had always been passionate about environmental sustainability. However, my experience had primarily been rooted in academic research, and the practical application of climate impact mitigation through carbon projects was entirely new territory for me. Over the course of my internship, I gained invaluable insights into the intersection of environmental science and business, and I am deeply thankful for the opportunity to learn and grow within such a dynamic organization. Working within this framework, I was able to see firsthand how environmental and climate goals can be translated into measurable outcomes that benefit both communities and ecosystems. 

One of the most memorable aspects of my internship was the opportunity to travel to Douala, Cameroon, to participate in a mangrove restoration project. This experience proved to be both challenging and rewarding, as it combined fieldwork, data collection, and environmental analysis. Alongside a dedicated local team, we conducted a carbon forest inventory the mangrove ecosystem of the Wouri estuary. This process involved measuring tree parameters (diameters at breast height and height), assessing species composition, and estimating biomass to establish baseline data for future carbon credit calculations. Being immersed in the mangrove environment not only deepened my understanding of carbon accounting methodologies but also reinforced the importance of preserving these vital ecosystems. 

The field experience in Cameroon was particularly impactful because it illustrated the practical steps involved in translating science into scalable projects. I was able to witness how local stakeholders and conservation professionals collaborate to restore degraded landscapes while simultaneously creating economic opportunities through carbon credit markets. It was inspiring to see how science-based solutions can drive meaningful environmental change. 

Throughout my time at HAMERKOP, I was continually impressed by the dedication and expertise of the team. The level of commitment to sustainability and technical rigor is evident in every project. The mentorship I received was instrumental in helping me navigate the complexities of carbon certification processes, field methodologies, and data analysis. I am especially grateful for the patience and encouragement that my colleagues provided as I transitioned from a more academic background to working in such a results-oriented setting. 

This internship has been an incredible learning experience. It has showed me that protecting biodiversity can go hand in hand with addressing climate change and fostering sustainable development. It has also given me a newfound appreciation for the role of carbon markets in promoting environmental stewardship. 

I leave this experience with a deep sense of gratitude and excitement for the future. To anyone considering an opportunity with HAMERKOP or in the field of carbon projects more broadly, I can confidently say that it is a path worth exploring. The work is not only impactful but also deeply fulfilling. I am excited to continue working with HAMERKOP in the future, where I have started a full-time role as an Associate Consultant. 

Mikael Minten

My Internship Experience at HAMERKOP  

Starting my internship with HAMERKOP was both exciting and daunting. Having studied Environmental Science and Ecology in Edinburgh, I had a solid grounding in environmental issues but little knowledge of carbon markets. The role at Hamerkop seemed like the perfect opportunity to bridge that gap and learn about an industry that was both complex and hugely important. 

I arrived at the HAMERKOP during a particularly hectic period. The team had just taken on several large contracts, and everyone was deep in work. It was a bit overwhelming at first, but at the same time it was also great—I was immediately thrown into real projects where I could apply what I had learned in my studies.  

In my first few days, I had one-on-one meetings with everyone in the office, learning about their backgrounds and roles. These chats, along with lunchtime conversations (often outside, thanks to the summer weather), helped me settle in quickly. The team was incredibly welcoming, and within a couple of weeks, they officially welcomed me with a trip to the pub—always a good sign! 

As things calmed down slightly, I was able to branch out into different aspects of the business and get a broader understanding of carbon markets. There was a running list of activities I could take on, which gave me a great starting point. Three of my key tasks were: 

• Updating the Carbon Handbook: With guidance from the team, I worked on updating our Carbon Projects handbook, the last version of which came out in 2021. This included revamping some of the outdated material and enhancing clarity to make it more accessible and easier to navigate. The handbook is used as a broad introduction to carbon projects, so diving into it really helped me understand carbon market fundamentals. 

• Updating Carbon Standards for Blog and LinkedIn Posts: This was also a follow-up on a series of blog and LinkedIn post we had released in 2023 where we shared insights from data collected on over 65 carbon standards. I was amazed at the amount of standards that existed—each with its own unique approach to the carbon markets. The update required extensive outreach—following up with various organisations via LinkedIn and email to ensure we had the most up-to-date information. 

• Working on Geospatial Analysis: Another key role I took on was contributing to the organization’s geospatial analysis for many of our nature-based project. This gave me valuable insight into how remote sensing is integrated into project design and planning. Along the way, I became more proficient with tools like QGIS, EarthBlox, and R while exploring the wide range of available datasets. One of the biggest learning experiences was using remote sensing to conduct a stratification analysis—dividing a mangrove forest in Cameroon into high and low biomass areas based on remotely sensed data. 

Beyond these main projects, I dipped in and out of various other workstreams, including emission reduction modelling, drafting and designing projects, and project due diligence.  

The internship was a steep learning curve, but it was exactly what I had hoped for—real, applicable experience in an area that is rapidly growing in importance. Looking back, I feel incredibly grateful for the opportunity to work with such a knowledgeable and supportive team. It was a brilliant introduction to the world of carbon markets, and I’m excited to see where this experience takes me next! 

The world needs carbon removal and biochar is leading the way for the carbon removal market. Read the IBI-HAMERKOP Biochar Manual for Carbon Removal for a comprehensive introduction to biochar, carbon removal programs and how to create your own biochar carbon reduction project.  

Most climate change mitigation measures consist of avoiding the emission of GHGs into the atmosphere. However, with concentrations of carbon dioxide in 2022 reaching an all-time high of 421 parts per million (PPM), it is clear that we must embrace carbon removal in addition to avoidance strategies. With 94% of 2023 carbon removal deliveries coming from the production of biochar [1], continuing to scale this growing industry is essential to removing carbon from our atmosphere.  

Biochar is a black, carbon-rich solid obtained from the high temperature carbonisation of biomass in an oxygen free environment. Its high carbon content and resistance to abiotic and biotic degradation makes it a powerful carbon sequestration tool, and its other properties like high porosity and water holding capacity make it useful in numerous applications like in soil as an additive, in purification systems and even in animal feed.  

Producers of biochar can get financial support for their projects by registering and certifying their projects with one of many carbon removal standards. Certification is an important step all biochar carbon removal projects go through, as it ensures quality and integrity of the carbon sequestration credits produced which is essential for buyers. 

Biochar mixture ready to be applied to soil via GIZ Bush Control and Biomass Utilisation Project

Choosing the right standard and completing registration of biochar carbon removal projects can be a complex task, and the amount of technical details involved can be overwhelming. The IBI-HAMERKOP Biochar Manual for Carbon Removal provides a unified source of information and is essential reading for those interested in biochar as a carbon removal tool, with insights on: 

• Biochar characteristics  

• Guidance for the design and certification of biochar projects (technology and feedstock considerations, biochar end use, eligibility, etc.)  

• Differences and characteristics of methodologies and carbon certification standards (i.e. registries)   

• Guidance on the steps required to build your own biochar project (e.g. emission calculations, monitoring procedures and carbon project registration requirements) 

The Biochar Manual for Carbon Removal was created to remove barriers to the biochar market by bringing together all the information required for project developers to set-up a carbon-financed biochar project, and for financial sponsors to understand the underlying assumptions behind carbon credits from biochar, into one easy-to-access manual. 

The Biochar Explosion

Biochar has been utilised as a soil amendment for thousands of years, but recently has garnered further interest for its carbon storage capabilities. Biochar producers have received funding from multinational companies such as: Microsoft, JP Morgan Chase, Swiss Re and Nasdaq, among many others looking to invest in carbon removal projects. These organisations have been a driving force behind the acceleration of new biochar projects development around the world.  

Figure 1 – Total tonnes of carbon removal delivered [2]

First-of-its-kind research recently highlighted that biochar’s potential to scale carbon removals as a win-win solution for people and the planet could potentially remove up to 6% of global annual GHG emissions [3]. 

While there were less than 1,000 tonnes of biochar-linked CO2e removal units (tCO2e) in 2020, this grew to 34,000 tCO2e in 2022, and to 65,000 tCO2e in 2023. This rapid growth in production is set to continue through the 2020s.  

Biochar production and application is one of the most cost-effective long-term carbon storage solutions. It can be set up at different scales, take place anywhere in the world and production can be up and running within weeks or months, rather than years. Despite this sustained increase in production, increase in demand for carbon removal is growing at an even quicker pace, making biochar projects an attractive value proposition for developers looking to join the carbon market. 

How to use the Biochar Manual for Carbon Removal  

Biochar’s multi-faceted nature can be a blessing and a curse – information on biochar’s characteristics, its use and how to enter the carbon removal market using biochar can all be difficult to find and technically complex. The Biochar Manual removes this information barrier and provides details on standards, methodologies and production technologies.  

Potential project developers and financial sponsors can learn more about biochar, how the various carbon certification standards compare in their requirements to issue carbon removal units, and the processes of each certification standards to issue credits for biochar. The guide should be used as a stepping stone into the world of carbon finance for biochar developers and sponsors to make fully informed decisions about the future of their activities. 

Once a biochar production activity has been designed (e.g., technology, quantity and type of feedstock, location, application, etc.), the Biochar Manual for Carbon Removal can be used to pre-select the most adapted carbon certification standard by using the comparison matrix. Once a few potential standards and methodologies have been selected, it is necessary to meticulously assess their rules and requirements, together with potential changes since the release of the manual. It can also be valuable to engage with a technical consultant such as HAMERKOP, or with the standards themselves to obtain answers to project-specific questions.  

What Does a Successful Biochar Project Look Like? 

The success of biochar projects come from their versatility. By using a feedstock that would otherwise go to waste, and utilising the biochar on soil, biochar projects act as waste management, fertiliser reduction, and energy generation projects at the same time.  

Successful biochar projects tailor their activities and features to the individual and local circumstances. For example, using a high-calorie feedstock that produces lots of thermal energy is great for projects that can utilise that energy, e.g. for drying coffee beans or for heating water, but is a wasted opportunity for projects who will not utilise the heat produced.  

Equally, biochar projects are a valuable carbon removal tool when the biochar can be used locally, but if the biochar or feedstock must be transported long distances then project’s positive environmental impact is reduced.  

The Biochar Manual for Carbon Removal helps developers, sponsors and interested stakeholders understand the main features of best-in-class projects, by providing answers to questions such as: 

• What feedstock is eligible for each carbon certification standard or registry?  

• Do I need certification for my biochar?  

• What technologies can I use to produce biochar?  

• What standards does the biochar I produce need to reach?  

To answer these questions and many more, download the Biochar Manual for Carbon Removal by clicking the button below, and begin growing your biochar project today!

References:

[1] https://www.cdr.fyi/blog/2023-year-in-review

[2] Cdr.fyi

[3] https://biochar-international.org/news/biochar-offers-an-accelerated-pathway-to-global-decarbonization-says-new-research/

Saying Hello to Artificial Intelligence at HAMERKOP and in the Climate Finance Industry 

Author: Jit Ping, Spring 2024

The AI (Artificial Intelligence) wave has taken the world by storm and no person or industry is spared from its effects. The climate finance industry is well-positioned to leverage the powers of AI to deliver greater value for all stakeholders involved. Indeed, we are not too far away from a world where AI can evaluate the feasibility of various carbon projects and recommend new projects in locations we have not previously thought of.  

By way of introduction, I am Jit Ping and I embarked on a two-month internship earlier this year as an AI research intern to find out how HAMERKOP and the broader industry can utilise AI today and in the future. I am happy to share in this blog post a few insights from my time with HAMERKOP. (click here to learn more about my internship experience!) 

What is AI?

AI broadly seeks to perform tasks that require human intelligence [1]. Satya Nadella, Microsoft CEO, summarises AI succinctly when he notes that AI is not just about delivering information to users but “about intelligence at your fingertips or expertise at your fingertips” [2].  Indeed, AI has been proven to have strong potential in detecting various cancers earlier and more accurately [3]. AI’s life-altering capabilities extend beyond the individual to the entire world. AI is being used to determine the pace of iceberg melting and where to focus ocean cleanup efforts [4].

LLMs (Large Language Models) such as ChatGPT, Gemini and Claude marked the introduction of AI into the public consciousness and generated strong public interest due to their ease of use and their potential to replace many white-collar office jobs we previously thought irreplaceable. The ability of LLMs to read and write is exemplified by the strong performance of GPT-4 on the bar exam typically taken by lawyers [5]. Crucially, LLMs can analyse and generate texts on a much larger scale than humans. For example, Anthropic's Claude AI can process lengthy novels like The Great Gatsby in a single query [6].

LLMs represent only a small sliver of what AI can do. AI’s greatest promise lies in the realm of machine learning [7]. Machine learning relies on computer systems interpreting data to find relationships and make future predictions [8]. The hype around machine learning stems from their ability to unearth patterns humans could never discover and their ability to train using a massive corpus of data. For example, machine learning algorithms can use software attached to wind turbines to help schedule preventive maintenance works before a breakdown occurs [9].

AI Use Case 1 – Reading & Writing Reports  

The ability for LLMs to write is unparalleled and unquestionable. In fact, Japanese author Rie Kudan won her country's prestigious Akutagawa Prize for her book while revealing that “probably about 5% of the whole text is written directly from the generative A.I.” [10].  Experts believe that generative AI (which includes LLMs) has significantly improved technology’s ability to achieve human-like abilities in creativity and social-emotional behaviours [11]. 

While LLMs might be good in the realm of writing and generating ideas, are they as good in the business world? After all, HAMERKOP and most other firms are interested in precision and factual accuracy. HAMERKOP’s trial with LLMs suggests that while it is right most of the time, AI frequently produces undoubtedly wrong output. AI has made up numbers that do not exist in reports and has struggled to understand the full context of lengthy documents.  

Indeed, the failures of LLMs to get basic facts right or understand basic instructions are well documented. LLMs are designed to be “probabilistic and sometimes unpredictable” [12] and are in reality just very good sentence generators. This means that their ability to solve 2+2=4 is not based on a fundamental understanding of mathematics and is not guaranteed. AI researchers term some of AI’s failures as “hallucinations”, such as when they contradict themselves in answers or make up facts that do not exist [13]. 

It is clear that LLMs cannot be autonomously given work to perform without any human intervention and guidance. However, there is still a role for LLMs in HAMERKOP and other companies. LLMs can be used to comb through lengthy documents to find a specific data point (or to refer to the relevant page where the information resides) and to synthesise chunks of texts into a neat table.  

Even if LLMs can extract information well, their true promise comes if it can do it at scale. At present, most information on carbon projects resides in various monitoring and verification reports. However, the reporting of such information is not in a standardised format – sometimes the information is found as a mathematical symbol or is simply not present at all. Additionally, LLMs struggle with mathematical tabulation of values when verification reports overwrite or add-on to past information [14].  The goal of creating a system which can process documents en-masse while ensuring “cost, quality, and generality” is still an active discussion amongst academics [15]. Hopefully such technology will enter the mainstream in the not-too-distant future.  

AI Use Case 2 – Making Quality Predictions   

AI can overcome the two biggest stumbling blocks to the successful implementation of a climate project – labour cost and uncertainty. The most labour-intensive work in a climate project is often fieldwork. Reforestation projects require lengthy land analysis to determine the potential emission reductions and to monitor projects after their implementation. AI is used to analyse satellite imagery and can annotate the characteristics of an ecosystem and track any changes that occur in its make-up [16].    

Projects require investments to operate, and investors require a good idea of the returns they can expect before they commit to any funding. AI can analyse vast swaths of past data to make predictions about the future. For instance, they can analyse the expected amount of credits generated from a project and the potential price each credit can sell for [17].

Indeed, a plethora of companies are entering the industry aiming to use AI to help companies implement their project from start to finish. For instance, some use a LLM to answer pertinent questions about the carbon market and about getting a project started. They attempt to provide softwares that allows project owners to receive funding, document project details and connect with other stakeholders [18].  Similarly, some others are working on a suite of AI software that would help with geospatial analysis, choosing the right methodology and writing project description documents [19].

The performance of AI models in tasks like land surveys and predictions ultimately depends on the quality and quantity of data used for training, as well as the training methodologies employed. However, developers are loath to disclose detailed information about their datasets or training approaches. As a result, AI models, particularly neural networks, often remain opaque "black boxes" because their internal reasoning and the process by which they arrive at specific outputs are not fully transparent or understood [20]. To enhance trust in AI model outputs, researchers would benefit from having access to detailed explanations of the models' decision-making processes and the ability to independently reproduce and validate the results.  

Conclusion - Using AI vs Being Used By AI  

The “Jagged Technological Frontier” of AI

It is clear that the central question for HAMERKOP and other businesses is not whether to use AI but rather how to use it well.  

Training employees to be AI-ready is certainly the most important factor. Firstly, it is important for one to be aware of the limitations of AI. Reading this article alone would have made you aware that AI can invent facts and shouldn’t be blindly relied upon. Additionally, researchers at the Harvard Business School believe that there is a “jagged technological frontier” whereby tasks of similar difficulty are either achievable by AI or incapable of being completed [21]. Knowing whether a task is inside or beyond the frontier will ensure time is saved and not wasted when using AI.  

Secondly, simple prompt engineering techniques can greatly improve the results that LLMs produce. For instance, Anthropic’s Claude LLM models perform over 30% better in multiple choice tests when the reference text is placed at the beginning of the prompt and not the end [22]. Training users in prompt engineering can ensure AI delivers more accurate information and in the format users expect.  

The climate finance industry has only just embarked on its AI journey. To benefit from the vast potential of AI, firms need to embrace AI in its entirety – by empowering all employees with the skills to use the latest AI tools effectively.   

[Disclaimer: Claude 3 helped with the proofreading of this article.]

References:

1. https://www.britannica.com/technology/artificial-intelligence 

2. https://www.weforum.org/podcasts/meet-the-leader/episodes/davos-2024-conversation-microsoft-satya-nadella/ 

3. https://health.google/intl/ALL_uk/health-research/imaging-and-diagnostics/ 

4. https://www.weforum.org/agenda/2024/02/ai-combat-climate-change/ 

5. https://www.reuters.com/technology/bar-exam-score-shows-ai-can-keep-up-with-human-lawyers-researchers-say-2023-03-15/ 

6. https://twitter.com/AnthropicAI/status/1656700156518060033?lang=en 

7. https://hammerspace.com/is-2024-the-year-of-the-enterprise-llm/ 

8. https://britannicaeducation.com/blog/ai-in-education/ 

9. https://plat.ai/blog/predictive-maintenance-machine-learning/ 

10. https://www.smithsonianmag.com/smart-news/this-award-winning-japanese-novel-was-written-partly-by-chatgpt-180983641/ 

11. https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/the-economic-potential-of-generative-ai-the-next-productivity-frontier#work-and-productivity 

12. https://medium.com/@glovguy/large-language-models-reasoning-capabilities-and-limitations-951cee0ac642 

13. https://www.vellum.ai/blog/llm-hallucination-types-with-examples 

14. https://bezerocarbon.com/insights/generative-ai-techniques-can-drive-standardisation-and-increased-transparency-to-the-vcm 

15. https://arxiv.org/pdf/2304.09433.pdf 

16. https://medium.com/@Gaurav_writes/machine-learning-for-forest-monitoring-algorithms-use-cases-challenges-4b9f3fb2e766 

17. https://drive.google.com/file/d/1wq5612Ag1FlMwiFsYnAjEXOcN0HZXZVG/view 

18. https://www.ivyprotocol.com/ 

19. https://www.nika.eco/carbongpt 

20. https://towardsdatascience.com/why-we-will-never-open-deep-learnings-black-box-4c27cd335118 

21. https://www.hbs.edu/ris/Publication%20Files/24-013_d9b45b68-9e74-42d6-a1c6-c72fb70c7282.pdf

22. https://www.youtube.com/watch?v=6d60zVdcCV4&t=1741s

Hi there! My name is Jit Ping, the AI research intern at HAMERKOP. Ending up in HAMERKOP was certainly a whirlwind journey that involved a trip around the world. It started in Singapore, where I was born and studied my A Levels. College brought me to Boston University and subsequently to BU’s London Campus on a study abroad program. The program’s internship component led me to Hamerkop. While most of my peers are on Business or Economics internships, my Data Science and International Relations background was what made me believe that this internship would be a good fit for me. It has most definitely been the case!  

The question that was posed to me at the start of my internship was indeed a lot more straightforward than the title of this blog post. However, I think the title of this blog post saliently captures two points 1) As a workplace, HAMERKOP has a strong team-spirit fostered by daily interactions and various team-building activities 2) My goal during this internship is to find out how various forms of AI can assist with the productivity of our consultants and generate cost savings within the company. In other words, to find out how AI can be a valuable member of a boutique consulting firm such as HAMERKOP.  

The Process  

Our consultants helpfully provided me with a list of tasks they thought AI would be helpful for. I reviewed their “AI wish list” and met up with everyone individually to have a chat. The goal of my first meeting was to better know every member of the team and to find out more about the challenges they faced at work. As a newbie in the carbon finance industry, I learnt a lot from my colleagues who would voluntarily give me readings and explainers so that I better understood the work they did. I was incredibly grateful that every team member was so generous with their time and willing to share with me the information needed for me to succeed.  

After my first round of interviews, I sat down with my supervisor to discuss my findings and to refine the list of tasks previously given to me. The collaborative process was important as we got to communicate our expectations with each other. It also ensured that I could finish this internship with clearly defined goals and outcomes.  

Thereafter, I spent time working on my various tasks. This involved research and speaking again with my colleagues to seek their feedback. I was especially excited to be able to run trials and create simple prototypes as a proof-of-concept to find out what AI can do well and what it cannot do. I was even able to get credits from the AI software Claude in my attempt to build a “HAMERKOP” Chatbot. 

How my first day started…

Life At HAMERKOP 

While I was initially apprehensive stepping foot into a new workplace (and in a very much foreign land), my nerves were calmed the moment I met the team. Everyone was welcoming and seemed to be eagerly anticipating my arrival. As one who struggles with names and faces, it was mildly stressful to realise that everyone in the team already knew my name the first time we met. The small size of the team and the various one-on-one meetings allowed me to settle in comfortably in no time.  

The small interactions at the office are great as well. Amidst stretches of being focused on work, there would always be someone who shares a funny story or engages in some small conversation to break the monotony of work. Lunch breaks were a pleasant time as well. The whole team would eat together, and it provided a welcome opportunity to converse about topics beyond work, allowing us to better understand each other on a personal level. 

How my first day ended!

Lunchtime was not always about food. I took a lunchtime run with Colin (and got a free tour of London out of it!) 

Final Thoughts 

Aside from a vague notion of carbon credits, I knew nothing about the carbon market before I joined HAMERKOP. My time in HAMERKOP has given me not only an insight into the industry but renewed hope for the future of our planet. The time and labour needed to get a project launched is certainly no easy feat. The paperwork necessary to achieve certification and the issuance of carbon credit is rigorous and aims to ensure the quality of each carbon project. (Find out more about Guy and Hazel’s recent trip to India for an idea of what such projects look like) It is heartening to see the industry growing with an ever-increasing number of projects undergoing certification.  

And of course, I cannot end without mentioning how great the team at HAMERKOP was. They made going to work every day a joy and I really treasured my time in the office and the relationships I fostered with every member of the team. These human connections (and the lunchtime routine of solving the day’s Connections puzzle) undoubtedly made my time in HAMERKOP a memorable experience.  

In this webinar we break down what our interns and associate consultants do on a day-to-day basis (in a Q&A format).

The webinar is presented by two of our current consultants who came through our internship programme: Tatiana de Liedekerke & Hazel Herbst. It is hosted by our business manager Kevin Sowdon.

Feel free to get in touch with us if you have additional questions and be sure to follow our Linkedin and Instagram for more insight into our work and life at HAMERKOP!

Trees play a vital role in the global carbon cycle, absorbing carbon dioxide (CO2) from the atmosphere through photosynthesis and storing it in their biomass. They are one of nature’s most effective carbon capture and storage systems and a critical component in mitigating climate change. Accurately measuring the amount of carbon stored in trees is essential for understanding the overall carbon balance of ecosystems and informing climate change mitigation strategies.

Carbon projects focused on nature-based solutions (NBS) like afforestation, reforestation, wetland restoration or conservation of existing forests are the most prominent type of carbon projects around the world today. In 2023, there were over 175 NBS projects registered on the Gold Standard and over 1,000 on the Verified Carbon Standard (VCS). The number is growing rapidly and reflects the increasing recognition of NBS in climate change mitigation and adaptation. With such potential, it is important to understand how exactly trees store carbon and how this carbon can be measured. Accurate quantification of carbon stocks in forest biomass is imperative in determining the sequestration potential from NBS projects and the resulting generation of carbon credits over the project’s lifetime. The two main types of project structures are ARR (Afforestation, Reforestation, and Revegetation) and REDD+ (Reducing emissions from deforestation and forest degradation):

• ARR: establishing new forests or restoring degraded land by planting trees and implementing soil conservation practices.

• REDD+: is a framework to encourage developing countries to reduce emissions and enhance removals of greenhouse gases through a variety of forest management options, and to provide technical and financial support for these efforts. It is a voluntary mitigation framework developed by the UNFCCC (3).

Besides being designed as carbon projects and generating carbon credits through certification standards, forestry projects are also implemented as Insetting projects, where corporates devise NBS solutions in their own supply chain rather than offsetting elsewhere, in an effort to reduce their own environmental impact and generate emission reduction for their carbon accounting.

How do trees grow and store carbon?

Over the course of their lifecycle, trees maintain the capacity of storing carbon in their biomass, but the rate at which this sequestered carbon accumulates will depend on the tree’s growth stage. Tree growth typically follows a parabolic or S-shaped curve, and this pattern can be attributed to various factors influencing tree growth and different metabolic processes taking place.

Several factors influence the specific pattern of carbon uptake over a tree's life (2):

• Tree species: different species have varying growth rates and lifespans, leading to differing patterns of carbon sequestration. Fast-growing species may exhibit a more pronounced parabolic curve, while slower-growing species will show a more gradual increase in carbon storage.

• Environmental conditions: factors such as soil fertility, water availability, sunlight exposure, and temperature can significantly impact tree growth and carbon uptake. Optimal conditions generally promote faster growth and higher carbon sequestration.

• Disturbances: natural or human-induced disturbances like fires, pests, or diseases can interrupt the typical pattern of carbon accumulation. These disturbances can lead to temporary declines or permanent changes in carbon sequestration.

However, the growth of any single tree within a forest ecosystem can only be understood by examining the successional dynamics that are influencing the development of the forest stand at a particular point in time. The change in forest ecosystems over time can be broadly referred to as forest succession.

Forest succession can be broadly grouped into four seral stages:

1. Pioneer: in the early stages of life, trees exhibit rapid growth as they invest energy in developing roots, stems, and foliage to establish themselves in the environment. During this period, the rate of carbon uptake is relatively high as trees rapidly accumulate biomass.

2. Young/Seral: as trees mature, they compete for finite resources and undergo a process of self-thinning referred to as the stem-exclusion phase. As the density of the stand decreases, the growth of the surviving trees accelerates due to increased availability of sunlight and soil nutrients, resulting in a rapid increase in the net carbon accumulation across the forest stand.

3. Maturing: as trees mature, their growth rate slows down, but carbon sequestration continues. This transition occurs as trees shift their energy allocation from rapid growth to maintaining existing structures and initiating reproductive processes. While the rate of carbon uptake may decrease, the net amount of stored carbon continues to increase due to the overall increase in size and biomass of the tree.

4. Steady State: in the later stages of their life, trees may experience a stagnation in growth. The concept of steady state is important for understanding the long-term potential of forest carbon storage In steady state climax, forests continue to sequester large amounts of carbon in their now significant biomass, preventing its release into the atmosphere. Even in death, large snags (dead trees) and decaying woody debris on the forest floor continue to play a vital role in supporting biodiversity and maintaining the hydrological function of forest soils, in turn facilitating significant accumulations of organic carbon in belowground ecosystems.

Understanding the dynamics of carbon uptake over a tree's life is crucial for accurate carbon accounting and evaluating the role of forests to mitigate climate change. Knowing when trees reach their peak carbon storage potential helps prioritize forest management practices for long-term carbon sequestration benefits.

The role of trees in carbon storage

Understanding the contribution of trees in carbon storage requires evaluating both aboveground (AGB) and below-ground biomass (BGB). AGB refers to the carbon stored in the visible components of trees, such as the stem, bark, branches, and foliage. BGB refers to the root network of trees below the soil surface and includes both large structural roots as well as fine root networks. AGB represents a significant portion of a tree's total carbon storage capacity but the ratio of AGB to BGB will differ with the age (2). type of tree species and stocking density, highlighting the importance of species-specific allometric models to determine forest biomass. Other forest carbon pools include soil organic carbon (SOC), dead woody debris, and litter (yet un-decomposed foliage on the forest floor). SOC is accumulated through the microbial decomposition and transformation of litter and deadwood from the forest floor and belowground roots (3). SOC is also transferred directly from the roots into the soil via root exudates (excretions from root tips). In some ecosystems, such as the boreal forest, the soil carbon pool far outweighs carbon accumulation in AGB and BGB. Only by considering all forest carbon pools including AGB, BGB, SOC, litter, and woody debris (see image below [3]) can a more comprehensive estimate of carbon storage potential in forest ecosystems be obtained.

https://bwsr.state.mn.us/carbon-sequestration-forests

Various techniques are employed to measure aboveground biomass, including field surveys that apply allometric equations, geospatial tools, LiDAR and Infrared. In this blog piece, we will explore these different techniques and how they work.

What is Allometry and how is it used on the ground?

Allometry refers to the study of the relationship between the size or shape of an organism and its various physiological aspects. In the context of carbon storage, allometric equations play a crucial role in estimating the carbon storage potential of trees. These equations use measurable tree dimensions, like diameter at breast height (DBH) or tree height, to estimate AGB (4).

As standard procedure, DBH is measured from 1.3m above ground height (1). This is a simple procedure for a relatively straight tree with one trunk, but with trees of different sizes, growing at varying angles, on slopes or with exposed roots (such as mangroves), DBH measuring techniques are adapted accordingly – this can be seen in the images below.

By applying allometric equations, researchers can quickly assess the carbon storage potential of large, forested areas and guide carbon project planning and implementation. Within allometry, wood density is an important parameter as it is a measure of the dry wood biomass or wood per unit volume, and it varies among species and within trees. These equations typically include wood density as a coefficient, which reflects the fact that denser wood has more biomass per unit volume(1). As an example, the average wood density of Maple trees is 0.547g per cm3 whilst the average wood density of a lighter wood like Spruce is 0.398g per cm3..

https://vfcs.org.vn/wp-content/uploads/2022/04/Guidelines-on-plantation-investigation-for-smallholders.pdf

Techniques for measuring below ground biomass in carbon projects

When it comes to below ground biomass, additional techniques alongside allometric equations like soil coring and radar can provide further estimations of carbon stored below the surface. Soil coring is a method which involves extracting and soil samples that contain roots. It is a direct method, meaning that it involves physically measuring the amount of root biomass present in the soil. Root-to-shoot ratios are parameters that can also be used to estimate BGB in the trees’ root systems, by converting the total aboveground biomass calculated from allometric equations for the tree species. Standardised figures for the ratios can be found under the IPCC guidelines in the 2019 refinement of the 2006 IPCC Guidelines for National Greenhouse Gas Inventories (7). They are based on the regionally specific climactic conditions and associated forest biome classifications.

Destructive sampling involves the felling of several individual trees, of the same species, within different age classes. These trees are then separated according to components (stem, branches, bark, foliage, and roots) and weighed to give you fresh wood biomass. Each component is then dried and re-weighed to ascertain the dry wood biomass (i.e. wood density in g/cm3 or kg/m3). By adding up the total dry weight biomass of each tree component, forest biometricians are able to derive an allometric equation that relates DBH and tree height measurements to the expected AGB. The more destructive samples you have (with a range of diameter classes), the greater your accuracy in estimating AGB when applying the appropriate allometric equation.

Species-specific allometric equations and wood density parameters are indispensable in estimating the AGB of forest ecosystems using field-based surveys. By establishing permanent, fixed sample plots, within a project area, surveyors are able to identify and measure all the trees within smaller plots to estimate the total AGB across the landscape using the relevant allometric equations. Field surveys are also important in evaluating forest health , disturbances and growth rate that can subsequently inform forest management.

The HAMERKOP team taking DBH measurements of trees in Madagascar

Relevant tools and technologies

For ground monitoring and field surveys, allometric equations remain a reliable form of analysis on tree carbon pools. To strengthen understanding of project sites and carbon sequestration however, it is possible to make use of other tools and technology to build on the ground measurements and assess trees from a different vantage point; for example, tools can measure carbon stock by analysing tree canopy cover. Some of these technologies include Infrared Imaging, LiDAR (Light detection and ranging) and SAR (Synthetic aperture radar). With time these are becoming more and more sophisticated and can support assessments of tree canopy cover, forest loss and growth and biomass accumulation.

Conclusion

Forest ecosystems across the world have a remarkable capacity to store carbon in their biomass. The management and conservation of existing forests and the reforestation of degraded lands is a critical component of climate change mitigation. Yet this focus on carbon must not overshadow the indispensable role of forests in maintaining healthy living ecosystems, preserving the ever-threatened biodiversity of flora and fauna which they harbour, and providing humanity with the ecosystem services such as freshwater and clean air, that we often take for granted, and which are not as easily quantified as a tonne of CO2e.

Nonetheless, forest carbon accounting remains an important mechanism that, along with continually improving focus on biodiversity conservation and socio-economic development from the principal carbon certification standards on the voluntary carbon market (VCM), represents a substantial opportunity to mitigate past, current, and future anthropogenic CO2e emissions. By understanding how carbon is stored in forests, and the methods employed to quantify it , we can maximize the effectiveness of reforestation, afforestation and conservation efforts. Accurate measurement of aboveground and below ground biomass, utilizing remote sensing, field surveys, and allometric equations, is vital for estimating carbon storage and guiding future carbon projects. As one of nature’s most effective systems of carbon sequestration and long-term storage, there is immense opportunity, and necessity, to channel much-needed finance to regenerate and manage the conservation of forest ecosystems in a rapidly changing climate. However, to ensure the credibility and accuracy of any forest carbon project, and thus encourage the growth of nature-based projects on the VCM, it is critical for project proponents to develop sophisticated methodologies to quantify the change in forest biomass via ground-based and remote sensing analyses throughout the lifecycle of a project. These must be transparent and reliable.

At HAMERKOP, our work has spanned a multifaceted array of NBS projects that look at REDD+ and ARR efforts that aim to restore ecosystems or create new sources of food and income for local communities. Projects have been in collaboration with local governments of implementing countries as well as the private sector, supporting design, implementation and carbon certification of projects with the relevant standards and methodologies. The team has also been involved in providing field training for project developers implementing ARR projects globally, ensuring accurate measurement techniques and site analyses are being conducted on the ground, and the correct allometric equations and calculations are made from gathered data. More information about our ongoing projects and forestry-related work can be found on our LinkedIn page and the team can also be contacted directly for further insights.

References:

1. Wood density, phytomass variations within and among trees, and allometric equations in a tropical rainforest of Africa (Henry et al., 2010) https://www.sciencedirect.com/science/article/abs/pii/S037811271000424X

2. How trees capture and store carbon: https://carbonneutral.com.au/carbon-jargon-how-trees-capture-and-store-carbon/

3. What is REDD+? https://unfccc.int/topics/land-use/workstreams/redd/what-is-redd?gclid=EAIaIQobChMI9KfX-pDpgwMVtZBQBh3eBw8JEAAYAiAAEgInCPD_BwE

4. Wood density, phytomass variations within and among trees, and allometric equations in a tropical rainforest of Africa (Réjou-Méchain et al., 2014) Link to article

5. International Centre for Research is Agroforestry Methods for sampling carbon stocks above and below ground

6. Carbon sequestration in forests: https://bwsr.state.mn.us/carbon-sequestration-forests

7. IPCC, 2019 refinement of the 2006 IPCC Guidelines for National Greenhouse Gas Inventories. (2019). Available at: CHAPTER 1 (iges.or.jp)

https://iscmee.eu-science.com/

It is becoming increasingly clear that climate action must go hand in hand with sustainable development, biodiversity conservation and the empowerment of communities on the frontlines of climate change. This holistic approach is essential to ensure that climate action is effective, sustainable and adaptable to local contexts. Hence, carbon projects should aim not only to avoid negative impacts, but also to generate positive benefits for the environment and local stakeholders. Project co-benefits can include the positive environmental, economic, social, and cultural impacts of a project, and are often linked to the UN Sustainable Development Goals (SDGs), which provide a comprehensive framework for addressing global challenges. 

There are a growing number of certification standards that allow project developers to showcase their contributions to sustainable development. These include carbon standards that directly integrate SDG reporting, such as the Gold Standard and the Verified Carbon Standard (VCS), and stand-alone co-benefits standards, such as the Climate, Community and Biodiversity Standard (CCB) and the Sustainable Development Verified Impact Standard (SD VISta), which can be added on to a VCS certification, or in the case of SD VISta used to generate standalone tradable SDG “assets”.  

The purpose of this blog is twofold: to offer an insightful overview of the primary co-benefit standards for project developers exploring their adoption and to provide clarity for potential buyers of these credits. In doing so, we aim to shed light on the dynamic landscape of co-benefit standards, where climate action converges with broader sustainability objectives. 

Integrated SDG Reporting Under Carbon Standards

Until recently, the Gold Standard was one of the few international voluntary carbon certification standards that required project developers to demonstrate that their project contributed to at least three SDGs. For each project type, SDG Indicators are chosen thanks to the Gold Standard’s proprietary SDG Tool, and any claims made are audited at validation and verification stages. The SDG tool also outlines how each SDG indicator should be quantified and monitored. In addition, the Gold Standard also supports the certification of SDG impacts, such as renewable energy certificate labels, water benefits certificate, gender equality impacts, improved health outcomes, and black carbon reductions. The Gold Standard has developed dedicated methodologies to certify such co-benefits, offering a more comprehensive quantification and monitoring approach. 

However, since January 2023, all newly registered projects under Verra's VCS also need to demonstrate that their projects contribute to at least three sustainable development objectives. The key difference between the two is that while the Gold Standard verifies these claims, the VCS does not necessarily verify the exact results achieved. Instead, auditors will only confirm that the actions leading to the sustainable development contributions have taken place. Alternatively, for more rigorous inclusion and verification of sustainable development goals, SD VISta and CCB certification can be added to a VCS certification to go further and ensure that the sustainable development claims are robust and confirmed by an independent third party. 

Sustainable Development Verified Impact Standard (SD VISta) 

SD VISta was launched in early 2019, and as of November 2023 counts 35+ registered projects. It enables project developers to make claims about the sustainable development contributions of their projects and add labels to VCS-issued carbon credits, but also generate tradable assets, representing a unit of a specific sustainable development benefit. While project developers are free to use their own methodology to monitor and quantify sustainable development claims, they must use an SD VISta approved methodology to generate tradable SDG assets. It must be noted that these assets are not to be used for offsetting purposes.  

As of November 2023, there is only one approved SD VISta methodology, which allows developers to generate time savings units from the use of improved cookstoves. This would specifically target SDGs 5.4 and 8.4. Furthermore, the SD VISta programme is currently in the process of developing a biodiversity methodology, called the: “Nature Framework”, which will enable project developers to generate Nature Credits.  

Nature credits, corresponding to an enhancement of biodiversity in a given area, would help fund projects in ecologically unique but threatened areas to promote ecological conservation and prevent species loss. This new initiative responds to the growing need and demand for biodiversity conservation, particularly in line with the objectives of the Kunming-Montreal Global Biodiversity Framework. More details on this new framework and pilot projects will be released soon.  

On the whole, the SD VISta programme goes much further than a standalone VCS certification by employing third-party expert auditors to rigorously assess a project's contributions to global Sustainable Development. This impartial verification process ensures the reliability of claims regarding the social and environmental benefits generated by these projects. As a result, buyers of SD VISta-labelled carbon credits have additional assurances that a project’s sustainable development claims are not inflated, and project benefits have really materialised. 

Climate, Community, and Biodiversity Standard (CCB) 

The CCB standard is geared specifically at land-based carbon projects, that simultaneously address climate change, support local communities and/or smallholders, and conserve biodiversity. As of November 2023, it has over 75 verified projects and an additional 50 projects that are at validation stage. 

Table 1. How different standards approach sustainable development contributions

The standard is used to generate CCB labels, which can be added to VCUs, but, unlike SD VISta, it does not offer a path for the certification of biodiversity “assets.” CCB awards “Gold Level” for projects that achieve certain criteria in either of the three categories (climate, communities, and biodiversity). For climate gold, projects must demonstrate net positive impacts for climate adaptation; for community gold, projects must be either led by smallholders or explicitly benefit globally poor or vulnerable communities; and for biodiversity gold, projects must protect or enhance Key Biodiversity Areas. 

As under the SD VISta programme, any claims made by project developers are rigorously verified and assessed by expert third-party auditors. Examples of requirements under the CCB include thoroughly assessing baseline conditions for both local communities, and biodiversity in the project area, and how these might be expected to evolve under both the baseline scenario and project scenario. This process involves mapping any key biodiversity areas and High Conservation Values present in the project area, and developing a theory of change, in conjunction with local communities. 

Why Should Project Developers Pursue such Certification?

Recognising the growing importance of these co-benefits, buyers are increasingly looking for credits that deliver verified positive impacts on sustainable development and biodiversity beyond carbon reduction or removal. An ICROA study of 59 carbon projects found that each tonne of CO2e reduced or sequestered can generate up to $664 in additional economic, social and environmental benefits beyond climate change mitigation. For example, in addition to reducing deforestation and forest degradation, cookstove projects tend to improve the health of their beneficiaries and reduce the time spent collecting and buying firewood, which has a positive impact on women and children who often bear the burden of cooking and collecting firewood. 

Efficient monitoring and subsequent monetisation of such co-benefits would enable additional financial flows to be directed towards achieving sustainable development goals globally. In addition, there is evidence that carbon credits with verified and well-documented co-benefits, such as Gold Standard credits or credits with a CCB or SD VISta label, sell at a premium. Based on a recent analysis of over 20,000 projects by Trove Research, credits from projects that deliver broader societal benefits commanded a significant price premium of between 15 - 40%, depending on the standard. The SDGs that attracted the largest price premiums were SDG 4 (education) and SDG 10 (reducing inequalities). On the other hand, as the first SD VISta asset methodology has only recently been approved, no projects have yet issued tradable SDG assets, making the demand for such products and the prices at which they would sell more difficult to predict. 

Beyond buyer preferences, it is likely that regulatory pressure and key voluntary carbon market (VCM) integrity initiatives will eventually require (or at least strongly encourage) project developers to design projects that contribute to sustainable development and environmental co-benefits. The Integrity Council for the Voluntary Carbon Market's (IC-VCM) Core Carbon Principles state that carbon projects must deliver positive sustainable development impacts and that there must be strong environmental and social safeguards in place.  

Possible Challenges 

However, monitoring and quantifying the co-benefits of carbon projects is not straightforward. Although some standards, such as the Gold Standard, provide indicators that can be monitored and quantified for any type of project, this is not the case for all standards. SD VISta and CCB do not require project developers to use a specific methodology, but they do require that the chosen methodology is justified and clearly described. This means that impacts may be calculated in different ways, thereby making comparisons between projects difficult.  

However, it is important to strike a balance between flexibility and standardisation, such as CCB's creation of 'Gold' levels, which projects can only achieve if they meet certain criteria. This approach aims to accommodate different project types with different objectives and contexts, while providing a benchmark for excellence under the programme. 

Similarly, SD VISta and CCB both allow project developers considerable flexibility in choosing the scope and quantity of impacts to report and the indicators to monitor. This is essential to ensure that the standard is suited to a wide variety of project types with different objectives and contexts. As a result, potential buyers must carry out a throughout analysis of the project, to ensure that the co-benefits brought about by the project align with their preferences or requirements.  

Another challenge for project developers is the lack of a clear price premium for attaining these additional co-benefit certifications. However, the advent of Integrity Council for the VCM’s "Core Carbon Principles" is likely to increase demand for high quality carbon credits, thereby sending a stronger price signal to project developers that such certification is worth the additional cost of pursuing it. 

Conclusion 

At a time when climate action is inextricably linked to sustainable development, biodiversity conservation and community empowerment, the value of high-quality carbon projects cannot be understated. As the demand for verified positive sustainable development impacts continues to grow, project developers and buyers should consider the benefits of these co-benefit certifications. Not only do they open doors to additional financial flows, but they also respond to increasing buyer interest for socially and environmentally beneficial carbon projects. 

At HAMERKOP, we understand the importance of high-quality carbon projects that significantly improve the well-being of local communities and ecosystems. Our expertise in carbon markets and sustainable development enables us to provide valuable guidance to project developers and buyers alike. We can help you choose the right certification standard, monitor and quantify co-benefits, and ensure that your claims are rigorously verified by independent third parties. Contact us for more information.