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Published on June 01, 2021

Nasdaq becomes majority investor in Puro.earth

Today we announce that Nasdaq has become a majority investor in Puro.earth. It is a big day for us because the investment will enable our growth and set us on the path to mobilizing carbon removal at a global industrial scale.

Carbon dioxide concentration in the atmosphere keeps going up but a fully functioning carbon removal industry could remove more than 10 Gigatons of CO2 per year, and this is what inspires us.

Currently, the carbon removal market is supply constrained

    • It takes time before economic acceleration of suppliers kicks in and volumes increase
    • It takes time to develop new solid methodologies
    • It takes time to verify the required evidence of net-negativity and issue carbon removal credits

That is why we will continue to work on all growth dimensions simultaneously. The support from Nasdaq means quicker market creation, accessibility for more carbon removal suppliers, liquidity, growth in the demand of negative emissions and visibility for the suppliers that are doing the actual carbon removal.

As Puro.earth co-founder, I had realized that there were already some budding engineered carbon removal methods available but a link to the demand from organizations who needed to remove residual emissions was missing.  I was backed up by Fortum, the leading clean energy company in the Nordics, who setup a team headed by innovation expert Marianne Tikkanen.

That new team focused on developing a business model, finding the least disputable ways of removing carbon dioxide from the atmosphere and setting stringent principles for eligibility.  This led us to build on science-based principles like measured quantification (not modelling) and rigorous third-party verification based on credible data trails and laboratory and field-tested permanence of sequestration.

Aiming to incentivize technologies that are carbon net-negative, in other words, they capture more CO2 from the atmosphere that they emit, our carbon removal credit the CO2 Removal Certificate, or CORC, was born.

Today we are proud and excited to continue our journey with Nasdaq.  It is a great match that an early-phase marketplace will be lifted by an exchange and technology company with deep experience as a market creator and which is driving strategic ESG action in listed companies.

We don’t have a crystal ball, but there are clear trends that we know will only solidify, and rightly so, such as the search for market integrity. Even though Nasdaq now owns a majority stake in Puro.earth, we remain a separate entity and our principles have not changed. From the beginning, Puro.earth recognized that the carbon markets must be transparent. A separate governance from the business was established to oversee methodology development and marketplace rules and it continues to be separate also after the investment.

We can also predict that asset managers and owners will be looking for carbon dioxide removal as a valuable metric in the ESG programs of companies they will invest in. And that is good news. It will create a surge in corporate demand for negative emissions, bringing much needed liquidity, a signal of a working market. Carbon removal suppliers desperately need the meaningful revenue streams from carbon removal credits that will support their growth.

Many operations will get started with the equity and debt that will become accessible to them. How so?  From the equity side, the development of a proper market of carbon removal credits will make the number of carbon removal projects that can be invested in, go up significantly.

From a lender’s point of view, consider that if a carbon removal supplier can get an offtaker - a buyer that guarantees the future purchase of their carbon removals, their project can be financed and can begin to scale.

Therefore, it is imperative to accelerate global scaling through a liquid carbon removal market, because we don’t have a lot of time.

Making predictions about pricing is challenging. In our marketplace the price is set by the seller. While we at Puro.earth advocate that price discovery should be based on finding an equilibrium between the demand and supply, it is good to remember that the price should also reflect the cost of sequestration to make it an economically sustainable business. We believe that as time passes, prices in several hundreds of dollars per ton are no longer viable because there are much more efficient solutions available and the cost curve will come down with scale.

Overall, this strategic partnership solidifies the voluntary carbon removal market. It provides availability and ease of action to the demand side of the market which will in turn spark the further development of the carbon removal industry. To support Puro.earth´s growth, Nasdaq will leverage its unique position in the intersection of the financial, corporate and regulatory communities where it assists its clients with navigating the global environmental, social and governance (ESG) landscape. For Nasdaq, Puro.earth will be a cornerstone in its ESG offering and provide its clients an opportunity to reach a beyond-zero carbon footprint. We are looking forward to working together.

Reaching a livable Earth and less than 1.5 degrees temperature raise, will require an efficient market infrastructure that facilitates corporate action and an immense amount of capital focused at decarbonizing the economy. We are now well on our way to play our part.

Antti Vihavainen
CEO of Puro.earth

To read Nasdaq's press release click here

 

Are you ready to include science-based carbon removal in your climate actions? Welcome to learn more about our Carbon Removal Suppliers and don't hesitate to book a meeting or contact us.

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