Emissions trading: Startup Senken offers SMEs and corporations secure CO2 certificates

How green is green enough? In order to achieve net zero targets, many companies rely on the purchase of CO2 certificates. However, the market is as confusing as it is unregulated. One certificate represents one ton of CO2 that is actively “sequestered” from the atmosphere, e.g. by planting trees, sustainable technologies or organic farming. Virtually anyone can participate. Many projects are located in the Global South. For a long time, CO2 certificates were only sold via brokers – at double or even many times the price. It was not clear to companies whether this was a genuine, sustainable project or pure greenwashing. The Berlin start-up Senken has changed all that. The team checks projects closely and only offers companies secure CO2 certificates. In an interview with Ambivation, co-founder Adrian Wons explains how this works and gives us an insight into collaborations with German travel insurer Dr. Walter and Bolivian biochar producer Exomad Green.

Adrian Wons, Co-Founder of Senken ( Credits: Hannes Thun)

Adrian, please start by telling our readers why CO2 certificates are becoming increasingly important for companies!

Many companies have committed themselves to the UN climate targets. They are trying to achieve net zero targets, i.e. to completely reduce their own CO2 footprint. This is not just about environmental protection. The result has an impact on investor ratings and the share price on the stock exchange. Companies and, in some cases, their suppliers are therefore under pressure. But no matter how sustainably they act, there is almost always a residue of so-called “unavoidable emissions”. These can only be offset or neutralized by purchasing CO2 certificates. The problem is: Not every certificate delivers what it promises.

Why is that? Why is the market for CO2 certificates so unregulated?

The projects that carry out sequestration, i.e. the binding of CO2 from the atmosphere, and the companies that buy CO2 certificates are often located far away from each other. This could be a farmer in South Africa and a technology company in Germany, for example. So far, the certificates have mostly been sold via brokers. These usually want to make a profit. So it can happen that a certificate is only worth 3 euros in South Africa and suddenly 15 euros here.

Moreover, the sustainability departments in companies are usually so small that they have no way of checking the actual quality of such a project. What’s more, it is often unclear whether the money actually ends up where it is supposed to.

The fact that there are hardly any guidelines and laws is mainly due to the fact that the many countries involved cannot agree on common rules.

What is your solution to the problem?

For sinks, we only offer companies secure CO2 certificates. We can check the quality of projects using satellite data, drones and information from rating agencies.

We used to select each project individually. Today, we receive around three applications a day. However, our quality standards are very high. Only three percent of projects actually make it onto our platform.

For companies, this means that there is certainly no greenwashing. In addition, companies can select projects from us that fit their industry and may even benefit their own supply chain. We have also developed a system that allows us to verify that the money paid actually reaches the project.

We only charge a brokerage fee of 10 percent for our service, which is much less than brokers who sell unverified certificates.

You now have numerous established companies among your cooperation partners. Can you tell us about one or two examples?

One medium-sized company we work with, for example, is the travel insurer Dr. Walter Reisen. The company insures a lot of trips in South America and Africa and therefore wanted to invest in CO2 certificates from these regions. We put together a suitable portfolio and made the whole process very efficient.

Was there a particular challenge in this cooperation project?

Particularly with medium-sized companies that only have small sustainability departments or none at all, we first have to educate them. For example, many ask themselves why they should pay more when CO2 certificates are available elsewhere for 3 euros. But high-quality projects cost money. That’s why we started by holding a workshop with the team from Dr. Walter Reisen on the subject of CO2 certificates.

A completely different company that you cooperate with is Exomad Green – a producer of sustainable biochar in Bolivia. How did this come about?

We found and contacted the company as part of our intensive DD process because we share a vision for the future and high quality standards. We place the highest value on quality and competent partners, which is why only a few suppliers meet all the requirements that we want to represent for our customers. Exomad Green converts waste from forestry into biochar. The project offers significant benefits beyond CO2 management. These include reducing health and fire risks, halting deforestation and supporting indigenous communities.

What exactly does your cooperation look like?

Together with Exomad Green, we obtain a total of 81,600 CO2 credits from biochar production for our customer over four years. This will be called up in four parts each year. Together we want to drive forward the elimination of carbon dioxide and set an important milestone on the way to a net-zero future. Our collaboration is based on combining carbon removal technology with rigorous digital tracking and focuses on community wellbeing and ecosystem preservation. Due to the outstanding volume, we all had to pull together in terms of transaction structuring and financing and were able to make it happen by joining forces.

What drives you personally?

Sustainability and new technologies are my greatest passions. I studied mechanical engineering, wrote the first German book on blockchain and managed the blockchain department at Ernst & Young for several years. I then founded a research institute on the topic of sustainability. At Senken, I finally succeeded in combining environmental protection and new technologies. And I think that’s the biggest lever for really doing something for nature and against climate change.

Contact

Website: www.senken.io

LinkedIn: Adrian Wons