Swiss firm seeks to raise $100m for biochar, other CDRs

Quantum Commodity Intelligence - Swiss-German firm Callirius is looking to raise $100 million for pooled investments into biochar and nature based carbon removal projects, co-founder Michael Grohmann told Quantum.

The company was founded by bankers with decades of experience in financing projects at the likes of Deutsche Bank, Morgan Stanley, MainFirst Bank and Dresdner Kleinwort.

It operates as a curation tool for carbon project investments and due diligence, and has recently started raising a fund together with some of its corporate clients.

Grohmann said the fund will be "initiated" at $20 million, but that it is already considering a larger investment of $100 million.

"We have a procurement service, which you can consider as a portfolio management tool, which will display the results of our due diligence process and risk modeling, showing monitoring data where we will add analytics over time, and take care of the contracting and KYC process," said Michael Grohmann.

"The due diligence process for our platform and our funding– and investment solutions, starting with the fund, can be leveraged."

For corporates looking to buy carbon credits, a fund such as Callirius is a way to mitigate the risks associated with project development as well as outsource the research process, which can be time consuming and costly.

Grohmann said Callirius is particularly interested in biochar, which has many advantages over other CDR technologies, including the relatively low lead time between investment and first carbon credit generation.

In June, it facilitated a corporate purchase by German chemical giant Bayer, with the credits coming from compatriot biochar producer Novocarbo.

"We follow an alternative investment fund (AIF) structure, which runs for 15 years. And this matches very nicely the lifetime of a pyrolysis plant," he says.

"Forest projects have different distribution curves, whereas with a pyrolysis plant, you get very stable carbon streams, and this makes it easier and more transparent to calculate one's financial exposure."

Grohmann said that other cash flow streams like heat and power, the biochar itself and the plant allow for different funding structures.

Callirius plans also investments into mangrove restoration, enhanced rock weathering and afforestation, reforestation and restoration (ARR) projects, said the executive.

Nature-based projects are more suited to corporate buyers with a long view that need substantial "baseload" volumes of credits for their net zero goals, said Grohmann.

"Afforestation is great for big volumes delivered in say, 2035. For the short-term streams, we look at methodologies available more quickly."