GreenTrade has just secured a considerable PreSeed funding as it builds out a blockchain-based marketplace for carbon credits and impact claims. The Berlin-based startup is aiming to bring more transparency and impact to the reduction of carbon emissions with a nature-based approach.
It goes without saying that the race to mitigate the impacts of climate change is well and truly on. It’s now a priority for governments, businesses and individuals right across the world – and it’s a race that needs to speed up.
GreenTrade is a Berlin-based startup embarking on a venture to support the reduction of carbon emissions on a global level. The company accelerates the financing of new carbon projects by creating long-term offtake agreements with project developers and turning those contracts into digital tradable assets. Those non-fungible tokens (NFTs) are then made available for corporate buyers today.
The startup, founded in 2022 by Katrin Klingenberg, Ulf Hackbarth, Carsten Hermann and Frederick Leuschner, has just received a near seven-figure PreSeed funding round and is preparing to expand.
The investment was led by the US-American Climate/Web3 venture capital firm Cerulean with the participation of Draft Ventures, Allegory and Flori Ventures as well as a number of business angels and serial founders, including Tom O’Keefe and Sundeep Ahuja, partner at investment firm Climate Capital.
Nature-based solutions
The climate crisis is becoming increasingly critical and new solutions that will mitigate the consequences are desperately needed. Nature-based approaches that avoid new emissions or remove carbon from the atmosphere have the potential to deliver up to one-third of the emissions reduction necessary to reach the goals of the Paris Agreement.
The problem is that these projects are currently only receiving about 3% of all global climate funding.
According to the United Nations Environmental Programme, if the world is to meet climate change targets, it needs to close a USD 4.1 trillion financing gap in nature by 2050. This is what GreenTrade aims to address.
Carbon credit and impact claim marketplace
GreenTrade has built a marketplace for carbon credits from sustainable, and transparent, environmental projects – and it addresses a core challenge that has emerged.
Frederick Leuschner, co-founder and CEO at GreenTrade, explained: “On the one hand, project developers face high up-front costs to generate carbon credits only in the future. On the other hand, companies committed to reducing their environmental impact are competing for a fast-dropping inventory of already existing credits. We use forward contracts to close this gap: project developers receive financing right away and corporate buyers get access to high-quality projects while protecting themselves against future price surges”.
On GreenTrade’s pioneering platform, the creation of carbon credits as well as all their transactions are recorded on the blockchain, guaranteeing the integrity and traceability of digital assets. The token protocol also allows project developers and third-party verifiers to enter measurement and verification information about carbon projects, such as data from satellites, drones, sound mapping and soil analysis, offering absolute transparency for buyers.
“The immutable records of the blockchain rule out any possibility of data manipulation”.
GreenTrade’s first nature-based carbon credits will be available in Q4/2022 in the areas of forest conservation and ocean restoration
A key example that illustrates how it works is the El Gato project, developed in partnership with German-Canadian NGO Wilderness International. The project consists of buying large pieces of undisturbed rainforest in Peru which are catalogued in the official land registry, offering permanent legal safeguards. El Gato will not only avoid the emission of 260,000 tons of greenhouse gas over a period of 30 years, but it will also produce positive externalities, namely the protection of amazonian wildlife and biodiversity as well as the creation of local jobs. The resulting carbon credits will be certified by Verra, the world’s leading carbon accounting organization.
This investment will help level up GreenTrade’s position in the race to mitigate the impact of climate change and address a pertinent issue on a global level. Driving impact and helping reach the target of releasing an additional supply of 1 billion tonnes of carbon credits by 2030.
Jahed Momand, general partner at Cerulean (Santa Barbara) added: “Cerulean is an active investor within the intersection of climate tech and web3, and we look for teams building fundamental infrastructure necessary to scale climate impact. We believe in GreenTrade’s high-calibre team, their vision and experience in executing and scaling businesses. GreenTrade’s technology generates high-quality nature-based carbon credits, which face strong and increasing demand. This investment is a contribution to protecting both the financial and the environmental value nature provides.”
