A capital transition company, Martello, launches first UK carbon credits with 32,000 hemp carbon credits, expecting them to trade at $40 per unit (£32.50).
What Does Martello do?
Martello enters the carbon credits market because it believes the market is broken and to challenge the US dominated $7.4 billion carbon market.
The founder of Martello, Jonny Mulligan, noted that:
“The carbon credits market has massive economic and climate potential, but today they are largely broken. This is why Martello is entering the market to challenge the status quo, bring transparency and assurance for Net Zero companies.”
The UK-based transition capital firm advises companies on the structure and fiduciary risks in the carbon credits market. Doing so is critical so that they know how those risks can impact their net zero strategy.
Martello is also developing and selling high-quality carbon credits that enables companies to offset their carbon emissions. The advisory firm also helps businesses know the trends that shape the global carbon market and the future carbon pricing.
More importantly, they help companies understand the limits of net zero and how they can develop credible plans and strategies.
Martello is working with the voluntary UK carbon code, the UKCCC, which validates the credits they issue. The firm focuses on triple returns:
- Reducing carbon
- Investing in biodiversity
- Incentivizing farmers to adopt regenerative farming practices
Their goal is to achieve the targets of net zero, UN sustainable development goals, and the IPCC mitigation.
Addressing Opaque and Junk Credits
Since 2021 the voluntary carbon markets (VCMs), have increased in size by 74% with a value of $7.4 billion. Estimates further show the market would be worth over $50 billion in 2030, with a 100% increase by 2050. Demand for carbon offset credits continue to soar as seen in the chart.
According to Mulligan, carbon credits are an important tool to cut carbon and meet net zero at speed. Emitters rely on them for up to 80% of their carbon reduction by the end of this decade.
But Martello believes that the VCM is opaque, lacking innovation and transparency. Hence, the company decided to create its own carbon credits to address those concerns, particularly the junk credits that are poorly validated. These credits create problems for the companies with net zero pledges and investors avoiding greenwashing and climate or ESG litigation.
Recent issues in the market, especially with forest carbon credits, spur major concern in the sector. They affected the major non-profit carbon offsetting standards which are responsible for verifying over 70% of the credits.
Studies also show that as much as 85% of carbon reduction projects validated junk credits, causing huge concern for investors.
Mulligan noted that “with little warning, a carbon project promising millions could be worthless, leaving investors with no returns”. And so Martello joined the market and searched the global carbon markets to find the team to create the first global standard for hemp and validate the credits they create.
The company picked the Re-generation Earth because of the robust science and their insistence on data transparency across projects.
Hemp Carbon Credits
There has been a growing number of growers producing industrial hemp in Europe and in Canada.
Hemp grows very fast like a weed and was a cash crop for centuries. Its versatility and hardiness make it useful in making various biomaterials and resources. It can deliver products such as CBD oil, hempcrete for low-carbon building material, and protein powder for a vegan diet.
Compared to forests that can take years to root, industrial hemp has a much faster growing cycle. This prolific growth allows the plant to sequester a significant amount of CO2.
According to research, a hectare of hemp can absorb about 8 to 15 tonnes of CO2. In comparison, forests capture 2 to 6 tonnes only depending on the type of trees, region, etc.
In Canada, hemp also acts as an essential habitat in the country’s vast plains; it gives many birds and insects food and shelter.
Martello’s project focused on soil carbon sequestration by growing hemp in a regenerative agricultural system. This crop’s annual carbon sequestration into soils is the main reason to cultivate it.
Growing hemp crops also promotes sustainable land management, circular economy principles, and local food systems while reducing waste.
Martello’s hemp carbon credits project has the following features:
- 32,179 Regenerative Agriculture Hemp Carbon Credits available for bulk or smaller issuance
- 15,000tCo2 equivalent, validation UKCCC in the UK
- Supports sustainable farming practices that enhance soil health, reduce emissions, and promote biodiversity in Canada
- Hemp carbon credits increase land absorption of CO2
- Pre-project estimate +60,0000 Actual project issuance
- Verified carbon offset certificates
- Focus on high assurance, meeting net zero fiduciary duty requirements, and transparency via blockchain smart contracts
Martello will host The Peripatetic Series on the global carbon credits markets in April and May 2023 to boost buying good credits and raise more awareness of greenwashing.