As natural solutions such as forest or wetlands still are one of the most effective ways to capturing emissions, climate tech are some of the hottest words in venture capital right now. Here, climate tech refers to a category of startups that work on solutions that in some way aim at allaviating the climate crisis, whether it be through mobility solutions, renewable energies or climate related data generation. A 2020 research by PwC (“The State of Climate Tech 2020“) found that although the overall share of climate tech of the overall VC market was only 6% of total invested capital in 2019, growth between 2013 and 2019 was about three times the growth rate of VC investment into AI and five times the average VC investment growth over the same period, eventually reaching $87 billion in 2020.
One of the subcategories of climate tech are ventures working on improving generation, collection and analysis of data related to the consumption of resources and of course on emissions.
One of the companies making a name for itself in this buzz is Pina Earth, a German startup founded in 2021. Its three founders met at the Center for Digital Technology and Management (CDTM) in Munich and have backgrounds in sustainable resource management, human-computer interaction, technology management, robotics and autonomous driving. PINA is being supported by the EXIST-programme for technology and science based startups by the German Ministry for Economy and Energy. The venture has also received $500,000 in early-stage funding by Silicon Valley-based technology investor Y Combinator. Pina Earth works closely with key players in the German forestry sector on over 1,000 hectares of project area already, aiming to scale their impact to forests throughout the EU. The first carbon credits will be launched later this year.
Naturally, at Green Mirror we are always interested in how the digital aspect of an innovation helps us achieve sustainable development.
In terms of the product, Pina Earth is constructing a "suite of digital services" to collect data on, monitor and certify forest carbon projects. Currently, data is collected and processed manually and certification of forest carbon projects require hundreds of pages of documentation, whereas Pina Earth aims to automate the certification process and let its software platform generate the carbon credits. The data input to calculate the carbon storage capacity of a forest is aerial data collected by light aircraft which are equipped with lidar sensors and cameras, which have a greater range than drones. Pina then analyzes the lidar and image data using AI algorithms to create a digital image of the forest. The granularity of the data is so high that each individual tree is recorded and tracked. Additionally, the data undergoes forest growth simulations, taking into account changing climatic conditions.
What is Lidar?
Lidar is a method for determining ranges (variable distance) by targeting an object with a laser and measuring the time for the reflected light to return to the receiver. It can also be used to make digital 3-D representations of areas on the earth's surface and ocean bottom by varying the wavelength of light.
Additionally, a public decommissioning register is used, where all certificates are deposited. With this transparent open data approch, each certificate can only be used once for offsetting.
As explained in previous articles related to corporate CO2 compensation through the purchase of certificates, this is one of the ways for companies to achieve net zero. However, under the Science Based Targets Initative, only 10% of emissions can be compensated this way, the rest needs to be actually reduced. Nevertheless, that still (unfortunately) represents a large amount of emissions, and by far not all companies have adhered to the SBTi anways, leaving a huge market for Pina and its competitors. In fact, a McKinsey study estimates that the market for carbon credits could be worth north of $50 billion by 2030.
If you found this interesting, Green Mirror's very first article was about Treeo, a venture following a similar mission.
What is the impact of this?
The solution both provides forest owners with a convenient way to manage their forests, and enables companies to have a transparent overview of their offsetting activities.
Naturally, forests are not only around to sequester emissions, but also provide habitats for a variety of animal and plant species, tie up water reservoirs and serve as people as recreational areas. Thus, managing forests responsibly also helps preserve a biodiverse environment.
Finally, protecting forests also supports local economies, especially in areas without many industries.
What can you do?