Startup from yesterday in Seattle nori announced that it has raised a Series A investment of $7 million, led by M13 with the participation of Toyota Ventures and Reserved area. Nori provides a marketplace for carbon removal solutions by promoting and verifying smart farming techniques and applying their carbon removal efforts on the Ethereum blockchain as NFTs.
The recent funding will help the platform expand sources of carbon capture in its market, as well as move its operations from Ethereum to the Polygon sidechain to reduce the company’s indirect environmental impact.
Nori is not pursuing the typical approach where companies that pump carbon into the atmosphere offset their impact on climate change by investing in solar power or forests. Instead, Nori wants to help remove or sequester carbon from the atmosphere. There are many ways to do this, and Nori is currently focused on promoting climate-smart agricultural practices.
For example, farmers typically harvest a cash crop and then leave the land fallow for a period of time. However, plants absorb CO2, so it’s a wasted opportunity as long as a field doesn’t have a crop. Instead, if farmers plant a cover crop (which they don’t sell), that crop will continue to sequester carbon from the atmosphere.
At the same time, Nori only wants to pay farmers who change their practices. A third-party validator compares past land and crop management data with current data, assessing the impact of a farmer’s regeneration practices on carbon removal and sequestration. Additionally, another third-party verifier analyzes the farmer’s data to ensure the credibility and transparency of the process. Site-specific Nori Carbon Removal Tonnes (NRTs) are then created, each equivalent to one tonne of carbon dioxide removed from the atmosphere for at least 10 years.
More recently, Nori created its own token, the NORI, so that an NRT can be exchanged for a NORI, and thus be active on the secondary market. The prices of these tokens will then effectively represent the price of carbon removal, making the process of carbon removal more universal and market-driven.
“Nori is at the forefront of much needed step change in the carbon removal industry by creating a transparent marketplace and we are delighted to support the company in its mission to ensure carbon reductions at scale are happening,” said Lisa Coca, Climate Fund Partner at Toyota Ventures.
Despite this promising approach, Nori’s use of Ethereum has caused some unease among buyers. The blockchain platform, known for its smart contracts, is also very energy-intensive because it uses proof-of-work. The realities of this mining process have some investors questioning the efficiency of carbon removal when Ethereum produces so much in its own process. Nori states that he is considering moving to Polygon. Although Polygon is comparatively more environmentally friendly, it is still tied to Ethereum, so there is still a carbon impact. Ethereum itself is expected to become more environmentally friendly later this year.
Meanwhile, several carbon offset solutions use blockchain. Moss Earth sells blocks of Amazon rainforest to prevent deforestation. And three banks, BNP Paribas, Standard Chartered and UBS, recently joined Carbonplace, a voluntary carbon market platform.