The climate crisis is undoubtedly one of the great challenges of our time. Around the world, we are increasingly seeing the pervasive impacts of this crisis on society, and are becoming aware that we need to take serious and considered action – and fast.
Governments and businesses are two key actors in society when it comes to taking on the climate crisis. In the EU, one such way action is being taken is through carbon credits and greater oversight over carbon consumption – and startups are innovating in this sector to facilitate the adoption of greener practices.
Since 2005, energy-intensive industry has been subject to the EU Emissions Trading Scheme (EU-ETS), which internalizes the costs of CO2 and uses a price signal to promote the transformation to a climate-neutral industry. EU carbon permits traded at a record € 98.5 in February this year – following news that EU lawmakers were mulling key reforms in the bloc’s carbon market and higher energy output from non-polluting sources. Companies face a fine if they emit more CO2 than they have covered by emission allowances. After 2027, these allowances will be auctioned, with a decision made in 2025 if a price corridor continues to be needed. Further, the number of allowances permitted each year is declining. Another option companies have is to buy credits from emission saving projects, and contribute to carbon offsetting.
Carbon offsetting refers to reducing or removing carbon emissions in order to compensate for emissions made elsewhere. Carbon offset credits is basically a transferrable instrument that is officially certified to represent emissions reductions
Through greater oversight of carbon consumption and participating in a carbon credit offsetting scheme, companies can ensure they are meeting EU-imposed targets, and drive the economy towards net-zero goals. It means businesses can offset their emissions by contributing to projects promoting and improving the earth’s environmental health – and startups are leading the way in facilitating this.
Here we outline three European startups that are leading the way in the carbon credit approach to reducing consumption and generating greener business practices – facilitating governmental aims of a carbon-neutral future.
ClimateTrade – Based in Valencia, ClimateTrade provides emissions-offsetting services to businesses that want to offset their emissions by investing in a variety of environmental projects. The startup employs blockchain technology, which enables businesses to track their investments in complete transparency. ClimateTrade’s platform calculates the carbon footprint of a company’s product or service and provides the user with the equivalent costs, which can then be invested in one of the projects to compensate for their carbon footprint and make products carbon neutral. The projects are sorted by territory and the SDGs to which they contribute, examples include installing wind power farms, hydroelectric power plants and so on. Founded in 2017, the company has raised about €7 million at the start of this year in an oversubscribed funding round and already has many prestigious Spanish names as clients, including Cabify, Banco Santander, Telefónica and Correos.
Carbonex – Founded in 2017 and headquartered in London, Carbonex offers another blockchain-based solution with their carbon credit exchange platform. Businesses, organisations and governments can trade carbon credits converted into Carbonex’s own crypto coin called CBN. Carbonex connects carbon initiatives from different countries and industries to improve liquidity and efficiency. The startup uses artificial intelligence, environmental data, and data on the state of global warming to develop models that track the impact on the planet. Customers can then use their carbon credits to fund environmental projects around the world or to invest in and launch new green businesses. Carbonex aims to promote social responsibility and support the achievement of the UN Sustainable Development Goals.
Puro.earth – Finnish startup Puro.earth is on a mission to ensure companies can neutralize carbon emissions with science-based carbon removals and remain trusted on the road to carbon net-zero. Founded in 2018, the startup connects carbon removal suppliers with corporations interested in neutralizing their carbon footprint and reaching net zero. Carbon removal suppliers develop carbon net-negative processes or products such as biochar, carbonated building elements, bio-based construction materials or geologically stored carbon. Each metric ton of removed CO2 is converted into CO2 Removal Certificates (CORCs) independently verified by a third party – and representing a new kind of carbon offset based on carbon that is removed from the atmosphere for the long term. This allows corporates to assign CORCs to their emissions for sustainability reporting purposes and/or offer carbon-neutral products and services. The race to net zero is open, but the winning needs a mutual effort, and Puro.earth is facilitating this.
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