Aqualibre Africa was part of the pitching programme at Africa’s Green Economy Summit in February in Cape Town. The company is part of a flagship green economy programme in the Eastern Cape to process wattle wood, an invasive alien tree, into biochar.
Q: Thank you for joining us. Let’s start with some background on you and what Aqualibre Africa is all about.
Hello, I’m Cornelia Gottschalk, a computer scientist turned environmental advocate, and I am now a partner in and head of environmental research at Aqualibre Africa. My mission?
Channelling tech-driven strategies to solve climate challenges and scale equitable solutions for Africa’s ecosystems. Because innovation belongs where it matters most, protecting people and the planet.
I’ll now hand you over to Benedict Weaver, our managing partner.
Hello. I actually come from a corporate intelligence background, and since 2015, we’ve conducted many ESG due diligence inquiries for clients who wanted to identify companies that were making a real environmental impact rather than simply engaging in fraudulent claims and were actually greenwashing.
In March 2020, a friend of mine in the same industry approached me to identify legitimate green projects with whom we could collaborate to generate carbon credits. We could then trade those carbon credits on our own carbon credits exchange. And so, the Aqualibre project was born.
Biochar is important as a sustainable agricultural solution for the African continent for four very good reasons. 1) It restores poor soils by improving the water- and nutrient-holding capacity. 2) It boosts food security and by boosting crop yields by 20% to 200%, making smallholder farming more profitable.
3) It is one of the few permanent carbon sequestration methods and earns foreign currency for local communities. 4) It aligns with African development practices and supports Agenda 2063 goals on climate smart agriculture.
Well, the first challenge is that most carbon credit exchanges do not operate on the blockchain, so their trades are neither transparent nor secure. The second challenge is that investors buy carbon credits that are not verified, although they claim to be.
It causes financial and reputational risks. And the third challenge is that certain projects do not benefit the communities with whom they allegedly collaborate.
Now, Aqualibre Africa has overcome these three challenges by trading insured, verified and community-led carbon credits that are backed by our blockchain. As such, investors and communities mutually benefit from the carbon credits we generate from the green projects with whom we collaborate.
The involvement of the local community is paramount. Buyers in the Northern Hemisphere need quality carbon credits generated by community-led green projects in the Southern Hemisphere.
So, the community working on the green project, which generates carbon credits, must benefit from the sale of these carbon credits. For our Aqualibre Africa project in South Africa, local communities involved in the harvesting process earn as much as a million rand a month based on our PPP model.
Interesting question. Our partners are a group of environmentally conscious and business savvy investors who helped us establish the Aqualibre Carbon Credits Exchange. Now Aqualibre Africa is the Africa desk of that exchange and we identify green projects in Africa.
There’s also an Aqualibre Asia which has the same focus but identifies green projects in India and the Far East.
We’re funded by three environmental funds at the moment. We identify green projects with whom we collaborate to generate best-in-class carbon credits with a positive return on investment.
As a result, our investors are also happy with the fact that 30% of net revenue from the project is shared with a local community and 10% is invested in a community trust. This enables the communities to finance local infrastructure projects like a school, a clinic, a church or even a community hall.
Green projects make money on the VCM by generating and selling carbon credits to buyers looking to offset their carbon emissions. Such buyers are typically motivated by shareholders insisting that their company meets climate goals.
Other reasons are to reduce their annual carbon tax, improve their ESG credentials or satisfy their environmentally conscious customers.
Entrepreneurship is crucial to the success and evolution of the green economy, because it brings fresh ideas, new technologies and business models that disrupt traditional polluting industries. Entrepreneurs create localised and inclusive employment, which empowers rural and marginalised communities.
Entrepreneurs are quick and agile, able to execute on the ground, building infrastructure and upscale verified carbon programmes.
Carbon credits absolutely help companies transition towards net zero and in two ways. But first, let me explain what is meant by net zero. Simply put, net zero means that a company balances the greenhouse gases, the pollution that it emits with an equivalent amount of CO2 removed from the atmosphere.
So in essence, a carbon credit represents one tonne of CO2 removed from the atmosphere. Now some companies, such as cement manufacturers, aviation and even shipping, do reduce emissions by implementing efficiencies, clean energy or new technology, but they still emit.
These remaining emissions can be offset by buying carbon credits from verified green projects. Secondly, companies can support carbon removal by investing in removal-based credits from projects that sequester carbon. And the beauty of this being that local communities benefit from that investment.
Well, another excellent question, and I am no seer, but I can say that the future of carbon credits will be shaped by three factors. One, accelerating climate commitment. Two, innovative climate technology advances. And third, evolving policies at both a national and government level.
Now, according to McKinsey’s, the current VCM will grow from its current $2 billion valuation to over $250 billion in the next 10 to 20 years. Why? Well, almost certainly because of a shift towards high-intensity and high-integrity credits that meet core carbon principles of permanence, additionality and robust monitoring.
Biochar and afforestation-driven carbon credits will dominate this sector in the short to medium term. So, insured, verified, community-led and blockchain-tracked carbon credits will become the standard. You can see therefore, what the future landscape looks like. A landscape in which carbon credits provide a dynamic and high growth transition towards a cleaner and purer planet.
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