Rabobank Acorns

Owned by Ashu Sikri (Unlicensed)
Nov 16, 2021
2 min read

See summary sheet

Nov 16 Webinar Notes

  • Farmers plant trees and Rabo monitors growth in biomass via remote sensing; this gets translated to tons of CO2e sequestered and each ton is sold as a CRU (Carbon Removal Unit)

  • Rabo has developed a new methodology / technical spec under Plan Vivo (will be public soon) and the CRUs are listed on Rabo’s own registry (eg, not working with Verra or GS). Credits are not tradable, retired once sold

  • Current pricing is 20 euro per CRU (one ton of carbon sequestered); Rabo keeps 10% to cover marketing + monitoring, remainder goes to local partner who keeps some portion for project management and remainder is to farmers.

  • Initial countries are Tanzania, Uganda, Peru, Nicaragua. Initial buyer is Microsoft and implementation partner is Solidaridad

  • Rabo's remote sensing team has developed algos for estimating plant biomass from satellite images

    • Measuring biomass at the plot level; min plot size of acre, max upto 10 hectares

    • need to train algos which need ground truth data in each new agro-climactic zone; need 60-80 plots for model development and ~20 for validation. Rabo compensates partners for cost of data collection.

    • Only looking at carbon sequestered by tree biomass; not able to accurately measure carbon sequestration via soil, biodiversity, water efficiency, etc. but looking into these as future streams

  • Local partners do need to gather additional data (farm boundary polygon, on-ground activities); Rabo has a list of what needs to be collected but is not specifying what tools partners should use; they are open to suggestions. Will reach out to Rishabh at Rabo to understand these requirements and think about intersection with the farmer wallet

  • CRUs are ex-post, meaning based on actual carbon sequestered. The positive is that this could justify a higher price but also means there is a financing gap; 3-4 year gap between planting tree and sufficient biomass growth to generate a CRU. Working with Rabo foundation on a financing structure for this that might include some initial payments to farmers that could be recouped from CRU proceeds. Will vary based on type of tree and geography but expect biomass to be sufficient for a CRU and growing between years 4 and 20. Goal is to plant trees that deliver co-benefits like soil health and water sequestration so that they remain up even after CRU payments stop

  • One risk that was raised, esp for SE Asia, is creating preserve incentives. Clear forest, plant palm oil and collect carbon offset.


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