A conversation with Henk Mooiweer, co-founder of Grassroots Carbon, about the current state of carbon markets, high quality soil carbon removal credits, how this company manage to sell 5 million dollars’ worth of them, and where the market is going. Why did Nestlé, Microsoft and Shell start buying? Why does Henk argue that now is the time to sign up as a rancher and not wait to sell your carbon later? Where is the science in all this regen grazing? What about methane? And why is this actually not about carbon?
LISTEN TO THE CONVERSATION ON:
THE CURRENT STATE OF CARBON MARKETS
Henk talks about the hesitation among companies to commit to carbon reduction targets due to uncertainty in US environmental policies.
”You see a little bit of hesitation by some companies to wait, and I think that partly has to do, of course, with the environment in the United States where we operate at this point; we’re not operating in Europe at this point. Just in the voluntary markets, there’s no hard requirement to do this. You do this because you want to mitigate risk or you want to have a better market position. But those are the drivers. I think to some hesitations or big companies, let’s wait till elections are in the United States; we’ll see what happens. And maybe you can buy a few years of not being active. There’s also a lot of companies that are basically in this space and feel carbon pressure. […] They have to do something, but then what? So, in this situation, I have to map their carbon footprints, which can be very complex and complicated if you have a large integrated operation.” Henk Mooiweer
HOW GRASSROOTS CARBON HAS BEEN PAYING $5 MILLION TO RANCHERS FOR SOIL CARBON CREDITS
Ranchers face financial pressure to adopt regenerative practices, and market demand is growing for these products.
”So, to get on-site support, from where to start, how to do it, what mistakes to avoid, and we also tried to build this kind of thriving community that our ranches were just hired, and very senior rancher success manager in our company to basically exchange these kinds of experiences: what worked, what didn’t work, what to avoid, and how ranchers can help each other. So, it’s not just the financial benefits from carbon payments that help, but it’s also removing some of the other barriers to making that change. We understand it’s difficult; it’s doing something different from what your parents have been doing, what your grandparents have been doing, and what your neighbours are doing. […] If you talk to them, which we do all the time, they are sometimes very alone in a certain region in implementing these practices. You have to be a little bit crazy to start doing this. So crazy, for me, is the good word for being innovative. And being at the forefront of creating change.” Henk Mooiweer
WHAT RANCHERS SHOULD LOOK OUT FOR: SIGN ONLY CONTRACTS WITH FLEXIBILITY
Waiting to engage in carbon markets can result in missed opportunities according Henk.
”The market is in full development, and it’s all over the place. And I’ve spoken at many rancher conferences in the US and addressed the core of these questions. If you work with the right carbon credit companies that are really interested in doing the right thing for landowners and providing the right amount of financial sustainability and income. Participating now, provided that you have a contract that allows you to benefit from any increases in carbon prices on a year-to-year basis, is actually beneficial. You get paid. Why wait? You get paid now. Be very careful what you sign up for; ensure that you have good profit-sharing contracts; and ensure that the carbon price can increase on an annual basis. So, ensure that you are the main beneficiary of any improvements. But starting now can really help. So, as you mentioned before in the introduction, I think we’ve paid wrenches over $5 million so far. So that’s real money. So yes, you can wait, but you miss out on an opportunity.” Henk Mooiweer
LARGE COMPANIES ARE FINALLY STARTING TO PAY
There is a growing interest in nature-based solutions, with companies like Microsoft and Nestlé already investing in regenerative practices.
”So, companies with a connection to agriculture and soil make it easier, of course, to get that connection to regenerative practices and regenerative-based carbon storage. All the companies really realised that the benefits beyond just carbon can be very important as well. And that can be the narrative. So yes, it’s not just the carbon that we remove; we increase water storage and biodiversity. So that’s why it’s important to start measuring water and biodiversity impacts as well, to basically have better data behind just a narrative.” Henk Mooiweer
”We’re at a tipping point. It helps, of course, that well-respected companies like Microsoft and Nestlé start to buy significant volumes of these credits. And it’s not easy to, of course, work with the technology teams and procurement teams; they ask all the questions, and I want to have evidence that we do it in the right way. We’re very careful about greenwashing, and rightfully so. So that starts helping a lot. Selling more credit is now much easier than it was four years ago.” Henk Mooiweer
OTHER POINTS DISCUSSED
Koen and Henk also talked about:
- More intrapreneurs are needed to crack the code on scaling regenerative practices
- Unlocking the potential of regenerative grazing to improve grassland ecology, water storage, biodiversity, and soil carbon
- The difficulty of changing grazing practices, due to family heritage and income
LINKS:
LINKED INTERVIEWS:
- Ed Byrne, if regen food doesn’t taste amazing and doesn’t make money it won’t go anywhere
- Peter Byck – Roots So Deep (you can see the devil down there)
- Russ Conser – Birds, beef, soil, science and regeneration
- Fred Provenza – What should we learn from domesticated animals when it comes to food as medicine
- Stephan van Vliet – The first randomised clinical trial comparing agro-ecological grown and supermarket food
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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.