Virtus: Unearthing the Potential of Biochar in Climate Finance
Welcome to our exciting March edition of Virtus!
As spring unfolds, bringing new life and growth, we too focus our energies on fostering growth in the realm of climate finance and carbon markets. This month, we look into innovative solutions and financial mechanisms aimed at accelerating our journey towards a greener future.
In “Our Take,” we investigate biochar and its potential as a durable carbon dioxide removal credit and key to activating climate finance and helping ecosystems.
Our latest episode of “Untangling Climate Finance” features a discussion with Rick Gilmore about his company’s new product Commodities Plus Carbon and the intricacies of this type of ag-based futures contract. This conversation is a must-listen for anyone interested in the financial strategies that have the potential to impact agriculture.
In “What We’re Absorbing,” we present two interesting reports. The first looks at how decarbonizing water using the voluntary carbon market can be a powerful tool for climate capital. The second report looks at the science behind nature-based solutions, offering insights into how these practices contribute to our environmental objectives. We also share some exciting updates from around the world on the green bonds front.
Happy reading and listening!
All the best,
Gordian Knot Strategies
We are Igniting Climate Solutions: Mobilizing $1 Billion Per Year in Impact Investment by 2030!
If you have not been paying attention to biochar, now is the time to start. Although, you won’t have to try too hard because it is all over climate finance and carbon market news.
In recent months, the biochar sector has seen a steady stream of news from around the globe, including the launch of new initiatives, deals being struck, acquisitions of carbon credits, and predictions for market developments ahead. This activity underscores the growing importance of biochar as one of the most innovative and promising approaches to carbon capture, climate finance, and helping ecosystems.
This surge of interest and investment in biochar warrants a deeper exploration of the subject.
To read the rest of the article, click here.
Client Served in the United States
We supported a U.S. and European collaborative effort that centered on the design of a carbon removal methodology for a new nature-based sector wishing to leverage the power of carbon finance to position a negative emissions technology. We established a Working Group that brought together a global team of field and technical experts. Over the course of a year, we facilitated meetings for the Working Group that addressed key issues pertinent to establishing a high-integrity carbon methodology with one of world’s the leading carbon standards in the world. Our work culminated in the draft of the concept note that was submitted to carbon standard for approval.
“GKS has the ability to navigate and understand important ESG issues that are relevant to our company.”
Dick Kempka – Vice President of Conservation, Molplus Woodlands Group
🎙️Our March episode features a conversation between Jay, and Rick Gilmore, the President & CEO of GIC Group.
They discuss GIC Group’s new product, Commodities Plus Carbon (CPC), a novel futures contract that blends agricultural commodities with carbon markets which seeks to reward farmers with a premium on their crop yields. Rick sheds light on the CPC’s mechanics, its significance in today’s agricultural and environmental landscape, and the rationale behind its timely introduction.
Click any of the links below to listen!
✍️ Do not forget about the value of water! According to a recent report – Decarbonizing Water: Applying the Voluntary Carbon Market toward Global Water Security – by researchers from the University of Colorado Boulder and Castalia, water-related climate mitigation efforts could yield over 1.6 billion tonnes of CO2 equivalent in carbon credits annually. Despite generating over 45 million emission reduction credits since 2010, significant challenges remain in harnessing this potential fully. The report emphasizes the role of climate finance mechanisms, such as the voluntary carbon market, in providing sustainable funding for water and sanitation management globally, underscoring the local nature of water management but highlighting the global opportunities for revenue through carbon credits.
🎙️ Zero: Climate Race host Akshat Rathi speaks with Connor Teskey, CEO of Brookfield Renewable Partners, about the pivotal role of renewable energy in combating climate change. They discuss the ambitious goal set by countries to significantly increase the deployment of renewable power by 2030, which demands a substantial increase in investment. Teskey shares insights on Brookfield’s contribution, including the launch of the world’s largest private fund dedicated to energy transition and their efforts to bring 7,000 megawatts of new renewable capacity online annually. They also touch on the challenges of investing in wind, solar, and sustainable projects in developing countries, highlighting the blend of capital and expertise required to achieve these goals.
✍️ The evidence looks good! A recent study – Expert review of the science underlying nature-based climate solutions – published in Nature Climate Change journal highlights the effectiveness of nature-based climate solutions like forest conservation and reforestation for climate mitigation, backed by strong scientific evidence. This peer-reviewed study did not evaluate specific projects or carbon crediting methodologies but focused on reviewing the scientific validity and expert confidence in 43 nature-based solutions for mitigating climate warming.
Below is a sample of some of the most exciting climate finance deals and updates in the past month. Click the article title for the full article.
Global Green Bond Sales Top $54 Billion in Busiest February Ever
Green bonds are off to a great start in 2024! They experienced their busiest February on record, part of a sustainable debt surge, with sales hitting $54.7 billion. This activity follows a record-breaking January with $83.3 billion in green bond sales, marking an impressive start to 2024. Driven by robust investor interest, the primary debt market, including the US investment-grade bonds, is on track for its most active quarter yet, while Europe anticipates increased issuance in March.
European Commission Issues €7 billion in its 3rd Syndicated Transaction of 2024
The European Commission successfully issued €7 billion in EU-Bonds through its third syndicated transaction of 2024. This issuance involved a new 25-year NextGenerationEU (NGEU) Green Bond, maturing on February 4, 2050, with a yield of 3.339% and priced at 98.481%. Attracting €86.5 billion in bids, the bond was oversubscribed by more than 12 times. The funds raised will support green projects within the EU Member States’ national Recovery and Resilience Plans, adhering to the NGEU Green Bond Framework and the International Capital Market Association’s Green Bond Principles.
Direct Air Capture Company CarbonCapture Inc. Closes $80 million Series A Financing
Carbon capture continues to capture big investments! CarbonCapture Inc., a US direct air capture (DAC) company, has raised $80 million in Series A financing, supported by investors such as Amazon’s Climate Pledge Fund, Aramco Ventures, and Siemens Financial Services. The company specializes in developing DAC machines, featuring a patented modular open systems architecture that enables production, plug-and-play upgrades, scalability, and fast technology iterations, allowing for the potential removal of vast amounts of carbon dioxide from the atmosphere through their machines.
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