Yesterday Seattle startup Nori announced that it raised a $7M Series A investment, led by M13 with participation from Toyota Ventures and Placeholder. Nori provides a marketplace for carbon removal solutions by promoting and verifying smart farming techniques and minting their carbon removal efforts on the Ethereum blockchain as NFTs.
The recent funding will help the platform expand the sources of carbon capture within its marketplace, as well as move its operation from Ethereum to the Polygon sidechain to reduce the company’s indirect environmental impact.
Nori is not pursuing the typical approach where companies that pump carbon into the atmosphere offset their climate change impact by investing in solar or forests. Instead, Nori wants to help to remove or sequester carbon from the atmosphere. There are several ways to do that, and Nori’s current focus is on promoting climate-smart farming practices.
For example, typically, farmers will harvest a cash crop and then leave the land fallow for a while. However, plants absorb CO2, so that’s a wasted opportunity while a field doesn’t have a crop. Instead, if farmers plant a cover crop (that they don’t sell), that crop will continue to capture carbon from the atmosphere.
At the same time, Nori only wants to pay farmers that change their practices. A third-party validator compares past land management and crop data with current data, assessing the impact of a farmer’s regenerative practices on carbon removal and sequestration. Additionally, another third-party verifier analyses the farmer’s data to provide credibility and transparency to the process. Nori Carbon Removal Tonnes (NRT) are then created specific to the site, each one equivalent to one tonne of carbon dioxide removed from the atmosphere for a minimum of 10 years.
More recently, Nori has created its own token, the NORI, so that one NRT can be exchanged for a NORI, and thus can be active on the secondary market. The prices of these tokens will then effectively represent the price of carbon removal, making the process of carbon removal more universal and market-driven.
“Nori is pioneering a much needed step-change in the carbon removal industry by building a transparent marketplace and we’re excited to back the company in its mission to ensure that large-scale carbon reductions come to fruition”, said Lisa Coca, Climate Fund partner at Toyota Ventures.
Despite this promising approach, Nori’s use of Ethereum has caused some unease among buyers. The blockchain platform, known for its smart contracts, is also very energy-intensive because it uses proof of work. The realities of this mining process have had some investors questioning the efficacy of removing carbon when Ethereum produces so much in its own process. Nori states that it is looking to transition to Polygon. While Polygon is comparatively more environmentally friendly, it’s still linked to Ethereum, so there is still some carbon impact. Ethereum should itself become more environmentally friendly later this year.
Meanwhile, several carbon offset solutions are using blockchain. Moss Earth has been selling blocks of Amazon rain forest to prevent deforestation. And three banks, BNP Paribas, Standard Chartered, and UBS, recently joined Carbonplace, a platform for voluntary carbon marketplaces.