INTERVIEW: Isometric Chief Commercial Officer Lukas May

Quantum Commodity Intelligence - Quantum spoke to Lukas May, Chief Commercial Officer at UK-based carbon removals standard Isometric

Q: How did Isometric manage to publish 11 new methodologies in the space of a year?

We think this is unprecedented in scale and speed. And I think there are maybe two key reasons. One is that this hasn't happened overnight - Isometric was founded about three years ago. We spent the first two years really building the strong foundations of our business along the lines that we set out to differentiate Isometric from other registries. One of those ways was scientific rigour.

We hired a really strong team of scientists - over a dozen - across basically every carbon removal pathway. We have two or three experts in each of the carbon removal pathways, some of them coming directly from academia and some of them with an industry background. We brought on Jen Wilcox as Chief Scientist, who is a very well-known academic and wrote a textbook on carbon removal, and Stacy Kauk as our Chief Science Officer, who is a leader in CDR and previously the head of sustainability at Shopify. And we got to work, with protocol drafting starting in earnest in the second half of 2023.

Alongside our scientists we also have the Science Network, which we've built up over time. This now includes over 300 independent scientists, all of whom have signed up to contribute to Isometric protocols when we need their expertise.

We also have a modular approach. And that's the other thing that has really helped us move quickly. For example, take our energy accounting module. This is a topic that is relevant across many of our protocols, so writing the rules once in a rigorous way lets us write the next protocol even faster.

You can also look at our Ocean Alkalinity Enhancement protocol. There are a lot of commonalities between that protocol and the River Alkalinity Enhancement and the Wastewater Alkalinity Enhancement protocols. While they are distinct protocols and are very different carbon removal methods in the real world, they share modules related to emissions accounting, feedstock characterisation, and marine carbon storage. And so you write the part that is different, rather than starting from scratch each time. The modular approach has really helped us scale and will help us continue to scale.

Partly through being venture capital backed, we were able to make large early investments in the science team. And then the modular approach has really helped us to move fast.

Q: In the past, Isometric has said that its protocols were built following demands from carbon credit buyers rather than project developers. Is this the only way of creating a protocol under Isometric? How does the process work?

We've got examples of both. We work for buyers, that's one of the key things that we've done differently from other registries. We've set ourselves up to be the representative of the buyer, to get paid by the buyer and represent their interests. And therefore, we are driven somewhat by what buyers are asking for.

That's really why we went into reforestation. We had this very strong signal from some of our existing buyers who had bought engineered CDR from us in the past, but said: Why can't you bring the Isometric experience to nature-based removal?

However, there are others where it's just very clear that there's a market and it's underserved. So Ocean Alkalinity Enhancement, for example, we moved on that pretty early. We had hired some of the key scientists who had been involved in academia. We had conviction that this was going to become an important carbon removal pathway. It's not an area that is very mature.

The suppliers, particularly when we started writing the protocol, were at a very early stage and there weren't that many of them. And similarly, on the demand side, there had been a couple of catalytic purchases from the likes of Stripe, but it's not by any means a mass market.

So we made a decision, around a year ago, that we were going to write that protocol because we wanted to help the industry scale. It's a chicken and egg situation. If you don't have a protocol that project developers can work around, they're not going to find a buyer. So in some cases we've just taken the risk and developed a protocol and then, as we've seen with Ocean Alkalinity Enhancement, that has helped catalyse the industry.

Since then, there have been some very significant offtakes that have been agreed between certain project developers and buyers and that will lead to our Ocean Alkalinity Enhancement protocol getting used in the real world.

Q: Isometric had previously stated it wouldn't create a biochar protocol because of the ongoing debate around the product's permanence. But you have since moved into the space. What changed your mind?

One of the key things was that the EU came out and said, it's going to have a permanence threshold of 200 years. I think where you're operating in a world of 1,000-year plus permanence thresholds, there is more of a debate to be had about biochar.

However, you can see the academic research still coming out and it looks increasingly like you can make the case scientifically for 1,000-year plus permanence of biochar. But a year ago, that was less obvious. The research is moving quite quickly.

Once it became clear there was going to be an EU-backed definition of permanence that incorporated biochar, we wanted to support it. And so our biochar protocol actually has two different durability thresholds.

You can show evidence for either 200-year durability, which reflects the EU's CRCF standard, or 1,000-year plus, which some buyers such as Frontier have set as their requirement. And of course you have to provide the required evidence in order to qualify for the higher durability level.

Q: How do the Isometric modules work in relation to the protocols? You have a module for storing CO2 in concrete, but does this have to be used with a separate protocol?

The answer is yes. If you're storing carbon dioxide in concrete, that's great, but we need to know where the carbon dioxide came from, how you generated it and how many emissions you produced along the way. We can't issue credits without that full view of the lifecycle. And so that module plugs into the relevant protocol.

For example, maybe you generated carbon dioxide through direct air capture (DAC), but rather than sequestering it in geological storage, you decided to sequester it in concrete. And so you would use a different module. It's kind of like choosing your own adventure. You'd choose the concrete storage module instead of the geological module, if that's where the carbon dioxide is stored. So, yes, it needs to link into a wider protocol.

But sometimes we will develop standalone modules. You may have noticed that we will sometimes run a consultation on a module by itself. We did this for energy accounting, where we developed the module agnostic of which protocols it's going to end up in. This is because we know that it's an important module to develop and it needs standalone input from the academic and wider community. Once that module is certified it can then be plugged into the price curve.

Q: How do you see the general CDR market? There are a lot of announcements, but at the same time a limited pool of buyers.

I probably would have a similar view to what you and others would have, which is that there has been healthy growth in CDR demand. But that healthy growth has been driven by a small number of players. Everyone in the market is interested and hoping - including that small number of players - to see the buyer pool diversify, because that's the sign of a healthy market.

So the question is what is going to be different in 2025 or 2026 to make that happen? I'm optimistic in the medium term - 2028-2029 onwards - that regulation is the answer.

With the CRCF in Europe, there is now a much clearer definition backed by governments of what constitutes carbon removal. Hopefully what will follow from that is: What can you use it for? So it's not purely philanthropic, there's a commercial incentive to buy carbon removal, whether that's integration with the EU ETS or being able to use it to make green claims. There are various use cases being developed which are going to take a couple of years to bed in.

So in the meantime, is it all just going to be Microsoft and Frontier? I think there are reasons to hope that it won't be. It will still take time, it's still going to be slow for what we would call the 'second wave' buyers to come into the market. But we have heard through 2024, that a lot of companies are starting to define their carbon removal strategies, starting to get sign off on budgets. But these things take time.

Another point to mention is SBTi. Most people are aware by now that SBTi is coming out with an update to its Net Zero Standard sometime in January. We are expecting that to provide more of a signal to SBTi members that they should be buying CDR not just the year before 2050, when they have their net zero target coming into effect, but in the build-up, because you don't go from zero to a million overnight. As they publish that in the coming weeks, that might generate a bit more momentum for these 'on the fence' buyers in 2025.

The other big thing is that buyers have been talking a lot about pathways like enhanced weathering but not wanting to be a first mover. They're waiting to see if the science settles and if it's really possible to understand this technology from a quantification perspective. But now that we've released the first verified enhanced weathering credits, and transparently published all of our calculations underlying those credits, we're expecting that there's a lot of folks who are going to be looking carefully at it. We think this will drive confidence in enhanced weathering as a pathway.

At the moment, most CDR credits produced are biochar. There are a lot of DAC plants in development, but they take a long time to get up and running. If enhanced weathering joins that club, that could be quite significant for the amount of CDR that is delivered over 2025 and 2026.

Q: Is Isometric making a pitch to become a standard recognised by the CRCF and maybe other even other regulatory regimes?

Yes, we've been working really closely with the European Commission since the beginning of the CRCF and the early stages of the legislation drafting. The way the regulation defines companies like us is as a certification scheme. So you've got standards, programmes, registries, and they all mean the same thing. Now you can say that 'certification scheme' is going to be the EU definition.

We will apply to be a certification scheme as soon as the EU is ready with that process, which we're expecting to be in the second half of this year. We're going to need to demonstrate and meet the European Commission's standards, but we've been through this process three times in the last 12 months with ICROA, Corsia and IC-VCM. We're expecting it to be a somewhat similar process.

Q: Some developers argue that the Isometric approach is tech-driven, the costs are incredibly high and they're not sure how much it can scale. What's your response?

We have deliberately introduced more scientific rigour to our approach, and we make no apologies for that. The way that registries have operated in the past has been too light touch. That has led directly to the scandals of over-crediting due to cutting corners, not taking proper measurements, putting their finger in the air and rounding up.

For some companies, that is a painful adjustment to say, okay, we can't do that anymore. That means we're going to issue fewer credits than we might have done under a more permissive methodology. In the long run, that is a good thing for the market and for project developers if it builds trust in the market and brings in more buyers and more demand. Our thesis is that it's worth it. This market can't scale if we keep having trust scandals.

It is true that sometimes, if we're developing protocols and modules at the cutting edge, we're very science-driven. A lot of this technology is still being tested and worked out in the field. We have to be open to amending our protocols as we learn things from practice.

And we do that. We're on version 1.1 or 1.2 of a number of our protocols. And that means we've made changes to them within the first year of publication. That's deliberate. We've designed our systems to be flexible so that we can get feedback, experience in the real world, learn and make changes where relevant.

Maintaining, of course, the robustness and scientific rigour. But if there is somewhere we can be more pragmatic and we can lower the costs for the market and project developers without affecting the scientific rigour, then of course we're going to do that. We're open to that.

Q: What are your 2025 priorities?

We are really scaling up, that's going to be the theme for this year. There's a bit of a sequence with the way these things develop. When you write a protocol, there's a lag between the protocol being published and a project developer deciding they're going to follow it. Then there's also a gap between a buyer saying they want those credits, the project developer doing the work and then Isometric issuing those credits.

In 2024 we released a lot of protocols. We carried out a few initial verifications and issued some credits. But obviously, the longer those protocols have been in existence, the more project developers will adopt them. Because there are so many protocols live now and they've been live for some time, we can expect to have probably 10 times as many verifications and credit issuances in 2025 as we had in 2024.

So for Isometric as a company, scaling up is going to be a key theme for 2025 and that's something we're very excited about. We built systems from the beginning to handle this growth, so it'll be good to put it to the test.