Interview with Francisco Benedito, CEO of ClimateTrade.
The platform connects buyers of carbon emission rights with sustainable projects developers reducing the transaction cost by 30 to 40%.
“We came to break this sector as Airbnb did with the rental housing or Booking with hotels“, says Francisco Benedito, CEO and co-founder of ClimateTrade, marketplace devoted to the carbon credits sale. “In the end what we do is eliminating intermediaries and connecting both parties. It’s a kind of Ebay or Wallapop”, he adds.
Carbon markets, as Benedito explains, arise in 1997 to force companies that pollute to pay for it and channel this money towards green projects that somehow offset CO2 emissions. In this way, sustainable companies obtain certifications that they can sell to polluting companies. “There is a compensation effect. If a company that pollutes, generates a ton of CO2 and, on the other hand, there is a company that does the opposite, this emission is offset”, explains the CEO of ClimateTrade.
He adds, that this market has been traditionally led by brokers, who take most of the profit as, “they not only voluntarily increase the price of the product, but they also put pressure on sustainable projects to get the credits at a lower price“. Companies that developed actions to tackle climate change in this situation “do not receive a fair price”. In addition, Benedito points out, certain fraudulent practices were generated from this practise, as many companies sold their credit rights “without cancelling them in the registry”.
The CEO of ClimateTrade, together with several colleagues experienced in the financial sector, decided in 2019 to launch their climate platform in which they implemented the use of blockchain technology “to generate a solution against climate change”. “We use blockchain technology to guarantee that, actually, carbon credits are cancelled in the corresponding registry, and to ensure that the money from the sale goes directly to the source of the project“, Benedito explains.
“In our platform you can find the projects where to offset your carbon footprint and you can select the one you like best” he says. In addition, he points out that through this mechanism the platform manages to reduce the costs of the transaction between 30 and 40% and also the time spent in the sale that goes from the 2-3 months it used to take before, to five minutes on the platform. He indicates that the price of the carbon credit equivalent to one ton of CO2 varies depending on the value of the intangibles, but the global average price is 15 euros per ton, while in Europe, the “largest market in the world”, the average price is 25 euros per ton of CO2.
ClimateTrade is currently working with more than 20 international companies with more than 150 projects, which give access to more than 1,000 projects worldwide. It has more than 25 corporate clients and more than 3,000 individuals and ClimateTrade expects close this year with a turnover of between 1.5 and 3 million euros. “The next step is to grow the platform worldwide as much as possible in strategic countries, increase the turnover and the number of customers. That is the top priority”, says Benedito.
Among the companies we are working with, there are large multinationals such as Iberia, Telefónica, Meliá Hotels or Danone. One last important corporation to join in was the energy company, Acciona, with them we have closed a strategic alliance in February to empower the climate trading platform for carbon emission rights. “We hope to be a strategic partner for a long time,” says the CEO of the Valencian startup.
In addition to promoting projects linked to the reduction of CO2 emissions, ClimateTrade also helps companies in their sustainability objectives and supports other green projects. A good example is a project in Ivory Coast to help women communities make a living by planting ginger, an activity that allows them to provide for their families. Another is the cryogenization of corals in Mexico, in order to safeguard these organisms.
Here in Spain, the platform collaborates with the companies Bosques Sostenibles and Co2 Revolution in reforestation projects. In the Valencian Community we do not have any project so far, although Benedito explains that they are considering several possibilities for reforestation projects. Finally, he announces that they will shortly launch a “shocking” ocean regeneration project about Posidonia.