Rice methane technology startup closes €2.5m fundraise
Quantum Commodity Intelligence - A France-based startup that has focused its efforts on helping rice methane reduction projects get off the ground has just closed a €2.5 million ($2.65 million) seed fundraising round, its co-founder told Quantum in an interview.
CarbonFarm uses remote sensing technology to monitor projects undergoing alternate wetting and drying (AWD), a water management technique to reduce methane emissions from rice paddy fields at various stages of their development.
The firm says that, based on its conversations with interested buyers, tech-enabled rice methane credits can sell for as much as $25/tCO2e rather than the $5 to $6 transacted earlier in the year for similar projects with no technology support situated in China.
US-based registry Verra suspended its main rice methane methodology in March after it noticed a boom in such schemes and due to integrity concerns.
But the methodology remains popular among project developers, who say it can lead to genuine emissions reductions for a critical agricultural staple.
Earlier this year, Switzerland's Gold Standard and Japan's J-Credit both adopted their own rice methane methodologies, while Verra is reportedly in the final stages of hiring a consultant to update its own protocol, according to sources.
"Rice is such a huge crop and so are its methane emissions. If you look at the mitigation potential, it's even bigger," says CarbonFarm's Vassily Carantino.
"When we think about methane, we all think about cattle, but it's very hard to reduce those emissions. For rice, there are proven changes to growing practices that can reduce emissions by half, at no costs."
Rice methane reduction projects are more costly to implement for farmers, who need to alter water levels in the fields at critical times during rice's growth, which requires more manpower and can facilitate the growth of unwanted weeds.
Article 6
In addition, the process to prove emissions reductions for carbon projects is said to be cumbersome and time consuming, although CarbonFarm says its technology can vastly improve efficiency.
"How is it done today? Well, it's mainly self-declared practices. You give logbooks to farmers and you ask them to log water levels in their field every day. That is very hard to scale and it's a very poor quality information... Most of the time we found that the auditors are the ones filling those logbooks," Carantino also said.
"With satellites, you can monitor water levels in rice paddies every day of the season with great accuracy and in an independent way."
CarbonFarm said its technology currently comes in addition to existing protocols, which rely solely on human logs, but that over time remote sensing data is likely to be implemented in carbon methodologies, thus vastly expanding the market for such projects.
A pilot project with the International Rice Research Institute (IRRI), NGO Rikolto and Gold Standard confirmed that satellites can estimate methane from rice with 95% accuracy in smallholder plots, said Carantino, a far higher percentage than forest-based carbon credits.
The company has also developed some in-house models to estimate methane emissions from different types of rice, soil and regions, and says it works with food giants such as Danone and Mars who want to reduce methane in their own supply chains, using an in-house methodology.
Several countries in West Africa and Asia are currently putting together rice methane reduction projects that will be operational under Article 6 of the Paris climate change agreement, with a view to selling the resulting credits abroad.
Late last year, the world's second-ever project under Article 6.2 for government-to-government transfers was announced by Ghana, with the potential to affect 1 million tonnes of emissions between 2022 and 2030.
Carantino said rice methane credits are likely to be eligible within Singapore's carbon framework under Article 6, thus giving the sector further impetus.
