Nori's approach and design choices

Alignment & architecture

Nori’s approach to achieving greater alignment in its marketplace hinges on several factors. Many of these involve narrowing the focus of Nori's platform to reduce complexities.

Carbon removals, not avoidances: Nori only sells carbon removal credits. This focus creates more clarity about the ‘rules’ of Nori's platform and the types of products included. It also serves to heighten the climate impact of dollars buyers spend on carbon credits in Nori's marketplace.

Methodological review: Nori employs extensive criteria and conducts significant diligence before onboarding any new carbon removal methodologies. At present, Nori only supports one methodology: soil carbon sequestration in U.S. croplands. In the future, the supported methodology set will expand to include nature-based and engineering-based methods. Each new methodology will be subject to consistent standards applied across Nori’s entire platform.

Immediate retirement: Nori immediately retires all of the carbon removals sold in its marketplace to minimize disagreements over market mechanics, accounting, and trading.

Transparency: Nori’s infrastructure and practices are designed to provide maximum transparency, whether with respect to transactions in its marketplace or the verification and measurement policies governing the carbon removals in Nori’s marketplace.

Supply-side

Nori focuses on scaling the supply-side of carbon markets.

To do so, it creates the infrastructure to reward suppliers for removing carbon from the atmosphere and to maximize the impact of each dollar spent by Buyers on carbon removals. By focusing on supply above all else, Nori differs from organizations who argue that voluntary carbon markets shouldn't scale until the 'quality' of credits, supply of available credits, or alignment on standards in VCMs improves substantially. There isn't enough time to wait. Further, Nori’s marketplace mechanics reduce many of the other complexities that normally challenge VCMs and cause other market participants to agitate for slower development.

Here are Nori’s theses on how better infrastructure drives impact.

Focus on carbon removals: Nori exclusively sells carbon removals in its marketplace. The Nori marketplace is not a carbon offsetting marketplace. Many offsetting projects may drive impact, but verifying, measuring, and reporting on the impact of carbon removals is much easier and tied to real-world data. By directing more capital to carbon removals, Nori believes it will help maximize the impact of capital flowing through carbon markets.

Reducing costs: Nori’s marketplace provides buyers with access to carbon removals in a one-stop shop. Buying carbon removals on Nori’s marketplace is as easy as shopping on any other website. Large-scale buyers often work with brokers and consultants to source supply from many different projects. Nori makes sourcing supply easier for these types of buyers.

Similarly, Nori also designs its platform to make it easier and more comprehensible for potential carbon removal suppliers to get paid for producing carbon removals. Compared to fees charged by registries to enroll projects and generate credits, Nori is also a much more cost effective solution for suppliers. Ensuring sound economics for suppliers and enhancing the reward for removing carbon is both more equitable and helps grow the VCM.

Finally, Nori’s insurance reserve allows suppliers to monetize 100% of their projects without setting aside any of their credits for their own insurance or buffer pools. Credits normally set aside for buffer pools equal lost revenue for suppliers, eroding their margins & incentives.

Throughput: Nori's payment system for suppliers helps guarantee they participate in any future price increases in carbon removal markets, reducing the need for suppliers to hoard supply to participate in said upside.

Transparency: Nori is built on a publicly-available blockchain to provide a transparent, easily accessible audit log of all transactions in its marketplace. Transparency mitigates double-counting and fraud, ensuring that carbon removals map to real results.

Overall, in line with global marketplace trends, Nori shifts in and out of having carbon removal available for immediate retirement. Nori continues to accept orders and guarantees retirement of them within one year as new supply comes online. Buyers can rest assured that their funds support a vetted and approved supplier of carbon removal.

To address supply constraints, Nori works with larger partners to secure new, high quality supply. Additionally, the methodology team is working to create new methodologies that will broaden the scope of credits offered in the marketplace to solutions outside of soil carbon.

Barriers to entry

Nori has spent five years building a marketplace to simplify buying carbon removals. Nori also offers an API for online merchants to easily integrate the option to purchase carbon removals via Nori’s marketplace at checkout. The methodologies and the standards governing which carbon removals qualify for sale on Nori’s marketplace are also accessible, transparent, and straightforward. Nori will only expand to additional methodologies if they meet these criteria.

Permanence

Nori's stated goal is to increase scale and carbon removal supply. Nori wants to achieve this as quickly as possible. Increasing supply depends on encouraging more market participants to remove more CO2 from the atmosphere. To increase supply and scale quickly, it makes sense to privilege throughput and tonnage over permanence and durability. Once the world is capable of removing many billions of tonnes of CO2 annually from the atmosphere, whether carbon is stored for 10 or 1,000 years becomes a less important question. By that point in time, more advanced sequestration techniques and technology should also exist.

Permanence is a critical design choice that informs what and how participants in carbon markets are looking to accomplish. With respect to permanence, the cost of various carbon removal methodologies increases when you optimize for longer timelines and durable storage. Methodologies that optimize for permanence and durability may also sacrifice scalability (e.g., the level of throughput possible at present).

Nori's main product, the Nori Regenerative Tonne™, represents one tonne of CO2 removed from the atmosphere and stored for 10 years. This allows Nori to support carbon removal methodologies, like soil carbon sequestration, that optimize for scale over permanence. More information on Regenerative Tonne product specification exists in the following whitepaper sections.

Nori understands certain buyers’ desire for more 'permanent' carbon removals. What's most important is that all marketplaces, including Nori, provide buyers with clear, accessible information and data so that buyers themselves can make the most informed decisions about what carbon credits satisfy their goals.

Additionality

Simplifying the additionality component of carbon markets is a key motivating factor for Nori’s focus on carbon removals. Simply put, it's easier to validate that carbon removals happen.

Nori’s definition of additionality for emissions removals can be distilled as "incremental and measurable changes in carbon removal, year-over-year."

When Nori works with farmers who adopt regenerative farming techniques that sequester more carbon in soil, these soil levels can be measured and modeled. Suppliers in Nori's marketplace must regularly provide input data, verified by a third party, to support their status as Nori carbon removal suppliers. Nori leverages process-based modeling practices to estimate carbon sequestration based on this data. More on Nori’s methodologies is forthcoming in future whitepaper sections.

With respect to carbon finance additionality, Nori diverges from other carbon market participants. Financial additionality criteria imply that only unprofitable projects should qualify for carbon financing. This would impede the progress of the carbon removal scale-up considerably, and worsen supply shortages.

Financial additionality is an example of how legacy voluntary carbon market structures that applied to emissions avoidance credits can be a disservice to carbon removal. Financial additionality is important when it guards against scenarios where developers monetize avoidance projects they would have deployed anyways, regardless of carbon financing. In those scenarios, profitability is an important consideration that’s intertwined with additionality; if the avoidance might happen absent carbon financing, no 'additional' action is really being taken overall.

It's true that carbon removal projects may also be viable absent carbon financing. For example, some developers might plan reforestation projects without the draw of carbon financing and there can be other forms of return on investment for farmers who adopt regenerative farming practices. Still, in each such case, emissions removal has still taken place. Should parties who remove excess CO2 from the atmosphere be penalized if there are other ecosystem or business benefits attributable to their actions? They’re still performing carbon removal.

Nori’s perspective on financial additionality is also motivated by its desire to create a fair and accessible marketplace. If suppliers already satisfy criteria and can verifiably prove they've removed additional emissions from the atmosphere above an established baseline, they should be compensated for that work. Requiring projects to prove their dependency on carbon finance would continue to constrain carbon removal supply and supply-side market growth.

By making carbon removals available to potential suppliers regardless of their profitability, Nori aims to seed the market with more supply, sending a demand signal to the next 100 to 1,000 suppliers that they should sequester more carbon out of the atmosphere, too.

There are many other types of tests that are applied vis a vis additionality in carbon markets. This whitepaper isn’t intended to provide exhaustive coverage of all of them. Rather, it hones in on the ones that are most critical to Nori’s marketplace and perspective.

Additional methodology specific information on additionality in Nori’s marketplace will also be forthcoming in a future whitepaper release.

In the interim, more information can be found on this page.

Accounting

By immediately retiring all carbon removals upon sale, Nori mitigates double-counting in its marketplace. When one buyer purchases a Regenerative Tonne on Nori's platform, it's impossible for them to trade or transfer it to another party. As such, multiple parties can't claim the same carbon credit.

Nori’s blockchain infrastructure also offers market participants an immutable record of all transactions on its marketplace, enhancing transparency. Each Nori Regenerative Tonne comes with a unique certificate certifying a buyer’s ownership, including the date of their carbon removal retirement and the location of retirement. Nori's Regenerative Tonne inventory tracking, sales, and retirement information is publicly available, both on-chain and in Nori’s online database.

Transparency ensures that each dollar that flows through Nori’s marketplace drives impact.

Measurement, reporting, and verification (“MRV”)

Part of promoting greater standardization and sound MRV depends on starting with a narrow focus. Nori launched its platform by focusing on one carbon removal methodology, soil carbon sequestration in U.S. croplands. Trying to set industry-leading practices for several carbon removal methodologies simultaneously would risk advancing none of them well. Over time, as its methodology set expands, Nori aims to ensure that all carbon removals in its marketplace satisfy a lofty set of standards.

On the technical side of measurement, verification, and reporting, Nori does the following:

• Measurement: Nori uses process-based modeling that meets USDA Bluebook Standards to estimate carbon sequestration in the soil for its carbon removals. Process-based modeling is grounded in real data, calibrated and validated by soil samples, accessible, and scalable.

• Reporting: Nori makes all of the data used in measurement and verification publicly available alongside other transaction data from the marketplace on a blockchain.

• Verification: As is industry standard, Nori works with independent third-party auditors to verify all the data it uses in its process-based modeling and ultimately reports publicly.

More information on Nori's MRV practices will be forthcoming in a future whitepaper release.

In the interim, more detail can also be found on this webpage.