“We validate the projects and methodologies, and verify the impacts and assets generated by the projects…”
Francisco Higuchi is the CEO at Tero Carbon, a digital certifier of carbon credits and stocks.
Higuchi has a degree in forestry engineering, a M.Sc. and Ph.D. from the Federal University of Paraná.
AgriBrasilis – What does the certification for carbon credits consist of?
Francisco Higuchi – It is a confirmation that the Project that is requesting the generation of the asset meets the minimum requirements for eligibility, integrity and proof of positive impacts.
Consumers of carbon credits do not necessarily need to be experts in “Nature Based Solutions” projects. Therefore, to be sure that they are investing in a real asset, they need an independent evaluation. This is where certification comes in.
The certification will verify whether the people involved have the prerogative to do so; whether the location where the project is being developed (and where its impacts are being measured) can be implemented or not, and if it is being developed voluntarily; and whether the impacts (reductions and/or removals of emissions) are real and on the volume or amount reported.
“More brands, products and services will start investing both in projects that reduce their emissions and in projects that generate additional credits that can be used for compensation”
AgriBrasilis – What criteria are evaluated and what certificates can be obtained?
Francisco Higuchi – In principle, Tero Carbon looks at three basic criteria: a. Proof of Life; B. Proof of Origin; and c. Proof of Asset.
Proof of Life takes into account the “Parts” of the project. Whether all of these parts are properly aware of and engaged in the project commitments and whether they actually exist. This is a more common “problem” for projects in forestry/rural areas. In some cases, people (mainly owners) end up getting involved in projects without a proper understanding of the commitments that are necessary or even without knowing about the implementation of the projects in their properties. In this case, this constitutes fraud.
In the case of Proof of Origin: land. In carbon projects in forestry and/or rural areas, the land component is extremely important. We evaluate the complete documentation, ensuring that there are no impediments to the implementation of the project in the property, and that the owners or managers of that property are properly aware of the project.
The Asset Proof is the confirmation that the project follows the methodological guidelines for measuring and reporting its real impacts. For example: in the case of forest preservation projects, we check whether the forest was indeed preserved and whether there were no problems during the project period (e.g. fires, degradation and/or deforestation).
Through the Tero Carbon platform it is possible to issue certificates for: carbon credits and/or stocks; Transfer; and Retirement (when someone “consumes” or uses the credit to offset their, or third parties’, emissions).
Tero Carbon will publish its Programs very soon and, with this, all criteria and processes for project certification can be consulted by developers.
AgriBrasilis – What are the costs and how long does it take to complete this process?
Francisco Higuchi – The costs and time for certification are linked to the scale of the project. The larger and more complex the project is, the tendency is for the investment to be proportionally greater. Tero Carbon will publish its rates very soon so that Developers can carry out the necessary consultations.
AgriBrasilis – What are the trends in the carbon credits market?
Francisco Higuchi – In Brazil, the trends are related to regulation and rapid growth. In the world, the trends are for traction and growth.
Society as a whole is rapidly becoming mature. Information is shared very quickly and democratically. People are becoming aware that something needs to be done and quickly. Thus, they start to demand from those who are more structured (mainly companies) for changes in behavior and posture.
This includes optimizing production (reducing emissions) and offsetting emissions (as there will never be a “zero” production process). Thus, more brands, products and services will start investing both in projects that reduce their emissions and in projects that generate additional credits that can be used for compensation.
AgriBrasilis – How is it possible to measure carbon capture? Are these evaluations reliable?
Francisco Higuchi – In this case I will focus on carbon in the forests, specifically.
The capture of atmospheric carbon in the biosphere (forest) is measured by the current forest stock. This measurement is made through sampling systems combined with remote tools (satellite images, sensor data, etc.) and allometric equations. This entire process is extremely robust and reliable, and has already been consolidated by the scientific sector. Now the discussion is how to improve this.
“Capture” or “removal” over time is measured by monitoring the same variables to determine stock. The difference is the “time” component in analyzing the results. If a forest, over time, increases its stocks, it means that the removal is ‘positive’.
But the most important thing is the “uncertainty” involved in this measurement. Every estimation process (sampling) has a “statistical error limit”. There are technical methods for quantifying this uncertainty, based on information from the “sampled population” (in this case, the forest itself).
The reliability of all this is given by the “quality control and assurance” (QA/QC) of the process. Which involves the consolidation and application of standard operations protocols (SOP) and verification systems (or auditing – whether of field activities or the accounts themselves). Essentially, the more transparent the process, the more trustworthy it tends to be.
AgriBrasilis – Which sectors are most interested in purchasing carbon credits?
Francisco Higuchi – As Brazil still operates in the Voluntary Carbon Market, it is companies that wish to offset their greenhouse gas (GHG) emissions. One could highlight companies in the oil and gas markets, technology and information, energy, civil construction, mobility (mainly civil aviation) sectors, vehicle manufacturers, etc.
The truth is that all sectors of the economy are moving forward and looking for more convenient and effective strategies to offset emissions. Some companies even make public compensation commitments, seeking to better position themselves within their consumer market.
AgriBrasilis – What are the projects developed by Tero Carbon?
Francisco Higuchi – Tero Carbon itself does not develop projects, but we act as a certifier and registration platform for environmental assets.
We validate projects and methodologies, and verify the impacts and assets generated by projects. If everything is in compliance, under the rules of each modality, the assets are minted digitally and deposited in the digital wallets of the parties involved in the project.
Tero currently offers five methodologies to the market. Two are for conservation, preservation and management of Amazonian tropical forests. One is to quantify carbon stock in legal reserve areas in the Amazon biome, as a kind of green bond or “CPR-green” (CPR – Rural Product Note). One is for coffee farming and other agricultural activities. One, the most recent, is focused on “Technology-Based Solution – TBS” projects in the transport sector, replacing combustion vehicles with electric ones.
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