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Carbon project developers: the engine to the VCM

Project developers—the organizations leading projects that capture carbon or prevent more carbon from being released—are the most important actors in the Voluntary Carbon Market (VCM). Yet, they also face the most significant challenges.

We built Thallo to change that. Here’s why.

Watch our interview with Colombia-based project developer Biofix

When we started Thallo, we asked ourselves two questions:

  • How can we best add value?
  • And which bottlenecks need to be addressed to help the market scale and help meet the goals of the Paris Agreement?

The answer was obvious: to remove carbon from the atmosphere, we need more projects that do exactly that. We need to address the challenges faced by project developers.

Project developers are the first in a chain of actors that allow the VCM to exist. They design and implement projects that preserve natural ecosystems, protect biodiversity, and stimulate economic development. They pioneer new technologies and help create new standards and methodologies. They also ensure revenues go back to local communities who need it most.

Yet, project developers are also the actors whose interests are least well-served. As outlined in our recent Fast Forward report, project developers have poor access to financing mechanisms. They face project implementation challenges and risks. They deal with slow and cumbersome registries and verification bodies. They struggle with opaque market prices and often have to deal with value-sapping intermediaries.

There is therefore a fundamental mismatch between the importance of project developers, and the extent to which their interests are served by the market.  

What’s why we’ve designed Thallo as a project-developer-first platform. Here are 6 examples of what we mean: 

  1. Thallo gives project developers direct access to a larger pool of end-buyers. This means they no longer have to sell to intermediaries that capture up to 80% of the end-price. Greater revenues to project developers also means more revenues going to communities and being re-invested in climate-saving projects.
  1. Thallo is low-cost and friction-free. We offer free onboarding and zero supply-side transaction costs. Dynamic trades powered by blockchain technology avoid cumbersome contracting and legal documentation. This again means more value capture for project developers, which means shorter timelines to implement their next projects.
  1. Thallo incentivizes quality and aligns incentives. As compared to other initiatives that ‘pool’ projects and commoditize carbon, all projects listed on Thallo retain their underlying characteristics. This prevents a race-to-the-bottom and allows project developers to command a premium for higher quality projects.
  1. Thallo improves traceability and transparency. High quality projects benefit from blockchain technology that provides maximum traceability and builds demand-side trust. Having transparent price signals also helps project developers follow market dynamics and command better financing terms. This helps the market to scale.
  1. Thallo gives project developers access to the secondary market. Estimated to represent ~2-4 times the VCM, the secondary market exists because credits are often traded multiple times before finally being retired. Thallo’s royalty model gives access to this immense market by automatically funneling a percentage of secondary trade revenues back to the project developer.
  1. Finally, through our partnerships and strategic initiatives, Thallo lowers the barriers to financing and will improve access to financial institutions and capital markets. This will help project developers focus on impact and help us all mitigate the worst effects of climate change.

Overall, being project-developer-first doesn’t mean we don’t care about other important stakeholders in the market. It just means we retain a laser-like focus on where our added-value truly lies.

If you want to collaborate and understand how you can best serve project-developer needs, reach out!