Scaling up Carbon Removal with Forward Crediting and Standards — Investing in Covalent

Scaling up Carbon Removal with Forward Crediting and Standards — Investing in Covalent

Aug 14, 2023 2:30 PM
Posted by

Jahed Momand & Matthew Stotts

Covalent is entering the gap in the carbon markets with a solution for carbon removal companies and funders who seek to buy consistently reliable, proven carbon removal. The team has built a functioning marketplace, has already facilitated the sale of 1.5 million carbon credits.

They are also building a registry and marketplace agnostic to methodologies, whether proprietary like those of Charm Industrial, or purpose-built by Covalent on behalf of carbon capture projects which do not have the resources to develop their own methodologies, asset generation and sales and marketing function.

Technology-based solutions for carbon removal on the Covalent marketplace include: (Direct Air Capture, Geological Capture, CO2 Mineralization, Biomass Energy Capture & Storage.

What is Covalent?

The Covalent technology spans four products in a suite to provide an end-to-end customer experience: A Platform for carbon project managers; a Public Registry; a Checkout Service for purchasers and the underlying blockchain infrastructure. The first versions of all four products have been completed (with more information at; A fifth element are the Common Services which support communication (email), web-hosting and other standard digital commerce functions.

Why did we invest?

The carbon removal market is expected to hit more than $500B market size by 2030 according to the World Economic Forum.

Cerulean believes that nature-based solutions to carbon reduction and removal as well as ecological regeneration are the critical core of the effort. However, nature-based solutions will not be enough. Technological solutions are also needed for a stable climate over the long-run.

Today, the market for mechanical carbon dioxide removal (CDR) is inefficient, unstructured and lacking a framework for credit issuance and transfers. And yet, mechanical, or technology-based methods of carbon removal have precise energy inputs, controls and results that can be proven systematically. While there is no methodology or standard for technology-based carbon removal, there is the internationally agreed upon standard of a carbon dioxide tonne equivalent (CO2e).

Given the relatively small physical footprint, highly localized installation and mechanical systems of most technology-based CDR, obtaining accurate and reliable measurements of CO2e removed is relatively straightforward. Though an oversimplification for sure, one could say that with the majority of tech-based CDR, the methodology is in the machines. Moreover, the data is in the machines as well and we’ve historically seen that carbon removal methods with greater amounts of more consistent and reliable data, generate higher market prices.

Furthermore, with the announcement of Frontier advanced market commitment (AMC), including Stripe, Meta, Microsoft, and other major players funding carbon removal as first-loss capital in some instances, it’s important to begin to build the evidence base for carbon removal methods. We have a chance to do this right from the start, and address questions of empiricism and epistemic belief up front, without the swirl and FUD that can happen when claims enable greenwashing.

There already is a demonstrated need for the kind of evidence that Covalent will enable us to create at scale, so we’re excited to make this investment at a time when the CDR market is ready to put major dollars behind the effort.

As far as the team goes, they’ve already demonstrated strong traction with their pre-purchase agreements, and we’re excited to support them.

Kodur Ener Orun is the founder and CEO, and led an affiliate marketing technology sales team for Commission Junction in Munich for four years and was most recently founder in residence and Launch House in Los Angeles.

Goker Avci, founded Alalëa, a Social Innovation and Sustainable Development Consulting Company in Turkey, building nearly 50 carbon mitigation projects in biogas and other technical areas, and is stellar at originating new projects and helping them structure their themselves and data.

Bahattin Cinic, head of engineering, has experience with web2 and web3 technologies, including with Ethereum Virtual Machines (EVM) including Celo and Polygon.

Nothing contained herein constitutes investment, legal, tax or other advice nor is to be relied upon in making an investment or other decision. This article contains the opinions of the author, and such opinions are subject to change without notice. Furthermore, it may also include data and opinions derived from third party sources. Cerulean Ventures does not accept liability for the accuracy or completeness of any such information or opinions which can be subject to change without notice.