The Symbiosis Coalition is the latest of the prominent Advanced Market Commitments (AMCs) for carbon removals. Taking inspiration from the LEAF Coalition (for REDD+) and Frontier Climate (for tech-based removals), Google, Meta, Microsoft, and Salesforce have pledged to contract for up to 20M tons of high-quality nature-based carbon removal credits by 2030. This “buyers club” is expected to provide a strong demand signal for nature-based carbon dioxide removal (CDR) credits in the carbon market.

Nature-based CDR: Affordable and packed with co-benefits

Nature-based CDRs are an important facet of the net zero journey, as I have written about in my previous post on Frontier Climate, another AMC. They are more affordable than tech-based removals. They also provide a multitude of co-benefits, which tech-based removals do not. A typical restoration or agroforestry project can support not only carbon sequestration through trees, but also improve livelihoods through economic diversification (say, if the trees planted are fruit trees), build resilience to climate impacts (by improving groundwater recharge and providing shade during increasingly harsh summers) and enhance local biodiversity. Co-benefits make nature-based projects, or nature-based solutions (NbS), attractive to corporations, communities and governments.

It is estimated that annual investments in NbS must nearly triple to $542 billion by 2030 and quadruple to $737 billion by 2050 to meet the Rio Convention targets (source). The sale of removal credits is an important revenue source for NbS models, often relying on it to make the project financially viable. A reliable market is, thus, crucial to sustain and scale NbS.

Nature-based carbon removals and their problems

However, the nature-based credits within the Voluntary Carbon Market (VCM) have been under severe scrutiny in recent years. Projects have been beset by problems related to design, accounting and monitoring. For example, The Guardian’s investigative report in 2023 sent shockwaves in the market.

Nature-based projects also run the risk of reversals, reducing durability of interventions. If a patch of forest generating credits burns due to fire or is hit by a disease, credit supply in the future is affected and credits already paid for go waste.

Given these issues, trust in nature-based projects is low and developers struggle to either find buyers or have to accept much lower rates for their credits. Also, increased market pressure to apply more rigorous protocols into project design (ex. dynamic baselines) and measurements have raised costs. Nature-based projects typically need high upfront capital and revenues flow much later, with a typical project timeline of 20-40 years. If nature-based carbon projects must also meet biodiversity objectives, as buyers typically expect them to, the costs of project implementation increase further. High costs and uncertain revenue streams across long timeframes make investments risky and heavily discounted.

“If you can meet our criteria, we will buy your credits”

Symbiosis Coalition, through its AMC, will sign Offtake Agreements with projects for their nature-based credits. Offtake Agreements give project developers the order books, signifying predictable revenue streams. This helps them mobilize the upfront capital needed for their projects from other investors. Projects also benefit by getting access to a large pool of buyers with the Coalition who will offtake credits at scale and secure revenue streams.

Symbiosis has adopted an extremely ambitious quality criteria and will only buy credits from projects that meet these criteria. It is based on Verra’s ABACUS label, which incorporates the latest innovations in carbon accounting, including dynamic baselines, robust approaches to leakage mitigation, and pathways for creating durable projects. The Coalition members are willing to pay for the real cost of adopting higher quality design and implementation standards, ensuring developers and community members are fairly rewarded. Their evaluation criteria for credits from ARR and agroforestry are published and the criteria for mangrove projects in under development.

Their Request for Proposals (RfP) for ARR, including agroforestry, is live.

Symbiosis Coalition, from the demand-side, is pushing for high-quality nature-based projects to revive a struggling but essential solution in our quest to address climate change, biodiversity loss and environment pollution. This is only the beginning. According to the UN State of Finance for Nature Report, only 18% of NbS financing came from private capital in 2023. I see that there is space for more such AMCs to crop up, especially within smaller jurisdictions with more localized quality criteria, that can help tap the full potential of NbS and promote private sector participation.