First Climate and Zurich University of Applied Sciences collaborate on state-of-the-art blockchain technology to track the impact of agroforestry on carbon sink performance
The innovation project from First Climate and Zurich University of Applied Sciences (ZHAW) paves the way for a new climate protection product from agroforestry projects based on blockchain technology. Thanks to blockchain, agroforestry projects could be implemented quickly, and transparently deliver high-quality carbon removals.
Most agricultural land is largely void of trees. By growing trees or woody perennials on cropland and pastures, the soil quality and natural carbon sink capacity can be significantly increased, without reducing food production. Landowners have already expressed high interest in participating in such projects to address agriculture’s carbon footprint, which represents around 11% of total domestic annual greenhouse gas emissions in the EU. If properly financed and scaled up, agroforestry could be an important component to provide carbon removals from this sector.
Despite this interest and potential, current methodologies or carbon standards are hardly applicable for agroforestry projects in Europe. One of the hurdles to overcome is the question of how to track and trace the impact of a given agroforestry project efficiently. These projects take time and personnel to develop, assess and monitor, especially for smaller projects. In addition to this, worldwide traceability is crucial to unlock much needed additional funding of these projects through the voluntary carbon market. Blockchain has emerged as a possible solution, thus encouraging the widespread digitalized implementation of such projects with climate finance from carbon credits.
After exchanging ideas on ways to support more agroforestry projects across Europe, First Climate and Zurich University of Applied Sciences were inspired to work together on an innovation project that tests the possibility of agroforestry carbon tokens. Starting in September, the pilot project cooperates with landowners in Switzerland over the course of one year to test the feasibility and identify potential challenges of scaling this up into the carbon markets for the most climate impact.
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SilvoCultura, an agroforestry project developer in Switzerland, will be on the ground to guide landowners to implement agroforestry techniques on their land and quantify the biomass. Zurich University of Applied Sciences will develop and refine the blockchain and digital token platform over the course of the project. First Climate will contribute its business expertise on climate projects in the voluntary carbon market, such as what requirements are needed for carbon standards, methodology, MRV and certification.
The pilot project is expected to increase the carbon sink by between 6-10 t CO₂eq per hectare . If successful, it could be developed into a larger agroforestry program throughout Europe.
Blockchain for Agroforestry Projects: How it works
Once they have implemented agroforestry techniques on to their land, landowners can have their project modelled and reported using remote sensing techniques, such as drones or satellites. This carbon sink information is then encrypted and issued as a token, proving carbon credits. Data is securely recorded and cannot be altered in blockchain, ensuring its integrity. Token owners are also guaranteed access to the future carbon sink performance of the agroforestry field, due to smart contracts in which the ownership of a carbon credit is contractually regulated within the token. Transfers, sales, or retirement of a carbon credit are automatically and permanently recorded, eliminating the chance of double issuance or double sales.
“Blockchain is an exciting tool to promote agroforestry in the carbon markets because it can dynamically monitor and record projects’ carbon sink from afar. This reduces the amount of time and personnel needed to verify a project,” explains Wassim Chabrak, Business Analyst at First Climate. “What you gain in time, you also gain in transparency: you can always see when, where and how carbon is stored and the status of a carbon token.”
Another important aspect to an agroforestry project is that these projects take place voluntarily on a landowner’s private agricultural land. Blockchain offers a simple solution so that landowners can maintain the freedom of decision making about their land management: if they choose to plant trees and the carbon sink improves on their land, blockchain can automatically issue carbon credits. If they choose to change practices, then there are simply no carbon credits issued.
Innovation Partnership for the Climate
“We need to make agroforestry a standard practice in Europe. Not only can we reduce emissions in the agricultural sector, but also improve the resilience of the food system and sustain food productivity in Europe. A blockchain-based MRV process has thereby the potential to bring transparency and trust to the voluntary carbon credit market and can possibly boost agroforestry by providing access to new funding sources and investment vehicles. We are excited to work closely with First Climate to explore how we can best use modern technology like blockchain to bring climate finance to meaningful climate action,” says Michael Lustenberger, Lecturer at ZHAW’s Institute for Organizational Viability.
The project received a grant from the Swiss Innovation Agency, Innosuisse, which supports cooperation between universities and companies to find innovative solutions.
