The carbon market has emerged as a pivotal instrument in the global response to climate change, facilitating economic mechanisms to reduce greenhouse gas emissions. Through the trading of carbon credits, it creates a financial incentive for businesses and countries to lower their carbon footprint. Yet, like any evolving market, it faces challenges of transparency, efficiency, and verification, making the integration of technology a pressing necessity.
Inside this dynamic interplay between technology and sustainability, we can find Senken. The platform offers a user-friendly interface with the most extensive collection of climate assets for clear and honest climate initiatives and financing. To guarantee the reliability and authenticity of every project, Senken enhances security and clarity at the data level. Users can invest with the assurance that the climate project will align with their company’s values. For tangible climate benefits, buy, exchange, and retire carbon credits to neutralize your company’s emissions.
In this interview, we spoke with CEO and co-founder of Senken, Adrian Wons. We dove into his entrepreneurial journey, the birth of Senken, and the transformative role of digital platforms in addressing the world’s most pressing environmental challenges. From pioneering 3D printing initiatives in Scandinavia to delving into the intricacies of blockchain technology, Adrian’s journey is a testament to innovation with purpose.
Can you start by giving us a brief overview of your entrepreneurial journey and how it led you to found Senken?
My journey began while I was studying, and established a company that specialised in 3D printing. Our focus was on producing the largest 3D printers in Scandinavia. At the same time, I was studying computational fluid dynamics in Denmark and became interested in wind energy. This field led me to consulting for Ernst & Young. Alongside this, I took up Sustainable Bitcoin mining as a hobby which ignited my curiosity in blockchain technology. So far, I have written one of the first books on this topic in German. I aimed to merge the two subjects, allowing me to launch and lead the innovative Blockchain division in Germany.
What motivated you to start Senken, especially given your background in blockchain technology?
Afterwards, I founded a research institution focusing on climate matters and relocated to South Africa with my partner. Through these experiences, I connected with and interviewed project developers of climate initiatives that produce carbon credits for the voluntary carbon market. They also discussed with me the difficulties they encountered and the market’s shortcomings, such as funds not being received by the developers to advance their respective projects. There needed to be clearer information, the costs of making transactions were too expensive, and many middlemen were involved to benefit themselves in the trade of the credits. These issues can all be resolved by representing the credits as tokens on the blockchain.
Can you talk about your journey from being a Blockchain Lead at one of the Big Four to becoming a startup founder in the climate sector? What skills were transferable?
Explaining difficult concepts. Blockchain needs to be understood fully to demonstrate its value, particularly in the climate industry.
Can you give us an overview of what Senken does and how it differentiates itself in the Voluntary Carbon Market (VCM)?
Senken is a platform that links carbon projects with corporates who want to invest in them. In exchange, they receive carbon credits to make their net-zero goals achievable. However, our priority is addressing challenges in the carbon market before those exchanges happen. We focus firstly on providing proof, in the form of carbon claims, that buyers have avoided or compensated a certain amount of CO2. Secondly, we address the lack of transparency in market operations. Our fee is 2%, with the remaining 98% invested in the projects. By removing intermediaries, we track every blockchain transaction and ensure that the invested funds flow directly into projects. Our fee is 2%, with the remaining 98% invested in the projects. To ensure project quality, we conduct our own due diligence and collaborate with rating agencies such as BeZero.
The competitors “just” connect companies and project developers. With our tech background, we create an infrastructure which provides and displays data on carbon claims and transactions. But that happens in the backend. The front end is built up simply, like Amazon.
Looking back on your journey to founding Senken, can you talk about a big challenge you faced and how you got through it? Would you have done anything differently?
One issue arose due to the negative publicity about the carbon market. This created a greater requirement for improved and direct communication. However, I believe it was also advantageous. This is because the criticisms were aligned with our own critiques of the market, which we aim to address.
Given the ongoing climate crisis, how critical is the role of carbon markets and digital trading platforms like Senken?
There is a huge funding shortfall in achieving the 1.5-degree target, estimated at 4.3 trillion dollars per year.
Regrettably, there is no agreement at the global or governmental level on how to proceed in the future. The carbon markets, working together, are one of our most effective ways to channel funds towards climate action today. We need to examine the issue closely. Money is required, and financial instruments are effective in achieving this. However, they must be made regenerative, which can be achieved through the voluntary carbon market. If we do not increase the scale of carbon markets swiftly, I do not foresee any alternative solutions to fill this gap.
Additionally, most transactions in the VCM were conducted over the counter. Meaning they occurred over the phone, where brokers would call each other and request a certain amount of, for example, reforestation credits. This process was highly inefficient and could not be scaled up. In contrast, digital platforms are quicker and more transparent. Also, the over-the-counter practice made it impossible to establish real pricing. At present, you can obtain a credit, which signifies the avoidance of a tonne of CO2, for approximately 2 Dollars. Everything is more affordable, even a tonne of shards.
Transparency is a major issue in the carbon market. Can you explain how blockchain technology contributes to the credibility and tracking of CO2 certificates?
Blockchain makes it possible to solve two problems in the life cycle of CO2 certificates. On one hand, the carbon claim it selfs. So did a certain project really avoid or compensate a certain amount of CO2. To be fair, blockchain is only a supporting technology on that. You’ll need other factors, like sensor data. On the other hand, it’s tracking who “touched” the credit, at what time, and for what price.
Blending two complex issues such as blockchain and carbon credits can be quite challenging. As a founder, how do you navigate the scepticism that surrounds both?
That’s one of our biggest challenges and it’s getting harder every year. Both markets already reached a peak during their “hype cycle” and are now at rock bottom.
For us, it’s crucial to present these topics simply and clearly. We strive to use language that even your grandparents could easily understand.
Hard facts are also key for us. University research and studies assist in conveying our message. Our brand’s foundation is built upon trust.
What’s the best piece of advice you’ve received as an entrepreneur, and how has it guided you?
Clear communication and transparency are vital in remote working. Establishing structures is necessary to prevent any misunderstandings that would be apparent in an in-person setting.
