Overview
As the world approaches what analysts refer to as the point of no return for climate change, governments and industry leaders are ramping up their commitments to clean energy and net-zero carbon emission. But commitment alone may no longer be enough, as global emissions in 2022 reached nearly 37 gigatons.
If the world is to fulfill its climate goals, greenhouse gas emissions must be reduced by 7.6 percent each year between 2020 and 2030, according to a United Nations report. The corporate sector has increasingly taken a leadership role in this arena, collectively committing over $100 trillion of market cap to meet net-zero obligations. While it’s certainly possible for businesses to achieve the necessary reduction goals internally, carbon offsetting fills a crucial gap for those striving to achieve their net-zero goals, especially when immediate large-scale emission reductions are challenging.
Carbon credits can be generated from a wide range of projects and systems — including direct air capture and fuel switching — and under a wide set of legal arrangements. Carbon credits are defined through a project design document, which specifies all relevant details about the carbon credit project, also known as a voluntary market carbon project. This includes land title, volume, measurability and additionality.
All voluntary market carbon projects are governed and managed by one or more independent standards agencies, depending on the region. These agencies operate similarly to the International Accounting Standards Body, which is responsible for establishing and maintaining international financial reporting standards.
In the case of restoration and conservation-based projects, carbon credit rights may either be associated with or separate from their underlying land title. In both cases, the company responsible for maintaining the project must demonstrate that investment will result in additional restoration beyond what is already present. Credits may either be purchased directly or deployed under streaming or royalty agreements, which offer a share of revenue in exchange for investing in development.
Nature-based voluntary carbon projects can unlock 65 to 85 percent of carbon credits. Nature-based solutions are an important part of addressing the climate challenge, given that deforestation and degradation account for 20 percent of global carbon emissions. Moreover, by targeting highly productive, low-cost jurisdictions, companies can generate significant returns to scale.
This is the basis of Klimat X’s (TSXV:KLX, FSE:QIC) value proposition. Klimat X is a leading provider of high-quality carbon credits sourced exclusively from afforestation and reforestation projects developed and owned by the company and its stakeholders.
Founded in 2021 by James Tansey, who holds a PhD in environmental science, Klimat X conducts industrial-scale carbon exploration and development across multiple jurisdictions. Drawing on 15 years of experience leading the development of carbon projects — which has produced over 50 million tonnes of carbon credits to date — Tansey’s vision for Klimat X is to become a leader in the protection and restoration of natural systems.
With some of the most senior executives from the carbon and resource sectors as part of its leadership team, Klimat X works at the national level and develops nature-based carbon projects on an unprecedented scale. Currently, it owns between 40 and 100 percent of three initial assets and has a development pipeline with over 3 million tons spread across Latin America, Asia and Africa. With a total of seven global projects consisting more than 80,000 hectares, Klimat X will create approximately 46 million tons of total carbon credits.
The company’s operations in Sierra Leone and its commitment to delivering high quality carbon credits have been proven through rigorous third-party protocols and the success of its first financial partnership with UK-based BP Carbon Trading involving a funding agreement of US$2.5 million.
Klimat X is developing a large-scale rewilding and reforestation project in Sierra Leone, for an initial area of 5,000 hectares, which will produce up to 1.9 million tons of validated and verified Verra carbon credits over 30 years. A Fortune 100 company has earlier pre-purchased the rights to carbon credits for the initial 5,000 hectares. The project area can be extended by a further 20,000 hectares.
The company has completed almost 1,500 hectares in the 2023 planting season and has submitted the project design document for final approval with an independent validation company. In late 2023, the company made the decision to switch to the new restoration protocol announced by Verra, the global registry for carbon projects. Switching to the new protocol ensures all Klimat X projects are aligned with the company’s commitment to high-integrity credits. The change is not expected to create any significant delays to its projects.
To date, Klimat X has mapped and verified almost 20,000 hectares of land for restoration and is working with NGO Namati to ensure landowner agreements are concluded under independently observed free and prior informed consent. There are large areas of degraded land that could be restored under this same model and the company is pursuing a mangrove restoration and conservation project covering up to 10,000 hectares.
In further pursuit of quality credits, Klimat X is developing a new technology platform, called Carbon Done Right, which provides unprecedented transparency and traceability for restoration projects connecting smallholder farmers with a system that is designed to ensure the value created from the sales of carbon credits is shared fairly with land-owning families.
Klimat X projects generate substantial economic benefits for the communities in the regions where they operate. The company shares income through employment opportunities, smallholder lease payments, and revenue-sharing agreements, particularly in regions with high levels of poverty and unemployment.
Klimat X is backed by a leadership team consisting of veterans from both the carbon and resources sectors, led by its CEO James Tansey. Director Celia Francis is a pioneer in the climate tech space. Board member Abayomi Akinjide has substantial experience in complex cross-border mergers and acquisitions alongside a host of other legal challenges. And Kevin Godlington, director of operations, is a specialist in post-conflict stabilization, stemming from his position as a former member of the British Foreign Office.
Company Highlights
- Klimat X is a carbon credit project developer focused on natural based solutions such as conservation, reforestation and mangrove restoration.
- Through collaboration with jurisdictional government and its own network of partners and developers, Klimat X develops low-cost carbon offset projects in highly productive jurisdictions.
- The company already maintains between 40 and 100 percent ownership of three initial assets alongside a development pipeline of 3 million tons of carbon credits diversified across Asia, Latin America and Africa.
- With a total of seven global projects consisting more than 80,000 hectares, Klimat X will create approximately 46 million tons of total carbon credits.
- Klimat X has secured a pre-purchase agreement with a Fortune 100 company for the rights to the carbon credits from an initial 5,000 hectares in the Sierra Leone project. Almost 1,500 hectares of planting have been completed in 2023.
- The company works with some of the largest buyers in the world including Fortune 100 companies.
- Klimat X currently maintains a 60-percent interest in sustainable coconut and spice producer and processor Pomeroon.
Core Projects
Sierra Leone
Klimat X’s flagship project in Sierra Leone is a large-scale reforestation and rewilding of land previously cleared for mining and palm plantations. Klimat X has a pre-purchase agreement with a Fortune 100 company for the rights to carbon credits from the initial 5,000 hectares of the project. By the end of 2023, the company has completed almost 1,500 hectares of planting.
The initial project area of 5,000 hectares will produce up to 1.9 million tons of validated and verified Verra carbon credits over 30 years. The total pre-purchase amount will be repaid through the delivery of validated and verified carbon credits to the pre-purchaser.
To date, Klimat X has surveyed and verified almost 20,000 hectares of land for restoration through a comprehensive participatory mapping process. An NGO, Namati, is acting on behalf of the landowners and preparing land lease agreements through a collaborative free and prior informed consent process.
Klimat X’s Sierra Leone projects consist of: up to 52,000 hectares of rewilding projects for a cumulative estimated carbon credits of up to 34 million tons over 50 years; a 5,000-hectare mangrove restoration project that will create an estimated carbon credit of 2 million tons over 30 years; and a 5,000-hectare Mangrove conservation project with an estimated 1.5 million tons of carbon credit over 30 years.
Yucatan (Mexico)
In Yucatan, Klimat X is working closely with local partner Compañía Mexicana de Captación de Carbono to restore coastal mangrove degraded by road infrastructure. The company plans to undertake first planting in 2024, with plans to restore more than 10,000 hectares over 30 years. The project is estimated to create a cumulative carbon credit of 4.4 million tons.
Guyana
Klimat X is focused on developing agroforestry and carbon opportunities in Guyana through collaboration with the national government and partner organization Pomeroon Trading. The project will focus on the rehabilitation of coconut and mixed agriculture estates.
Suriname
The mangrove restoration project in Suriname aims to restore 5,000 hectares over 30 years with an estimated cumulative carbon credit of up to 3.6 million tons. Mangrove ecosystems in Suriname are crucial to protect against shoreline erosion, and provide habitats for marine wildlife and nurseries for coastal fisheries. Klimat X intends to conduct first planting in 2024.
Management Team
Dr. James Tansey – Founder, Chief Executive Officer and Board Member
Dr. James Tansey is a leading academic focused on clean energy strategy and innovation. For the last 15 years, he has served as a professor at the University of British Columbia’s Sauder School of Business, where he has advised the BC and federal governments on clean energy strategy and social enterprise. Tansey has served as founder and CEO of Canvas Impact Advisors, a private company utilizing a research-led approach to impact and clean tech investment, advising global clients with more than $25 billion of assets under management. He was also the CIO of Global Sustainable Capital Management, which invests in sustainable commodities and agriculture in global and emerging markets. Earlier in his career, he led the world’s first carbon-neutral Olympics in 2010 in Vancouver. Tansey is the CEO and founder of Klimat X, with a PhD in environmental sciences.
Matthew Roma – Chief Financial Officer
Matthew Roma is a chartered professional accountant and the CEO of RW Global Consulting, a private company providing corporate finance, accounting and capital advisory services to private and public companies. In this role, Roma serves as a director and/or officer to several venture public companies in the natural resource and technology sectors. Roma articled at Deloitte, where he specialized in assurance and advisory services for publicly listed companies based both in Canada and the United States.
Kevin Godlington – Director of Operations
Kevin Godlington is a managing director of Planting Naturals, an organic and sustainable palm oil producer with a commitment to social responsibility and environmental stewardship. He specializes in managing day-to-day upstream operations in Sierra Leone, supporting the network of farmers and partners. Godlington was a former member of the British Foreign Office working in highly complex post-conflict stabilization, including 12 years with the British Army.
Celia Francis – Director
Celia Francis is a proven pioneer in leading emerging digital and climate-tech-focused companies. She plays a central and active role in the emergence of carbon markets around the world, working on finance, technology solutions and project origination efforts. Francis was chief commercial officer at Earthshot, brokering voluntary carbon credit financing into a variety of high-quality nature restoration projects around the planet. She is also a board member at NREP, the leading real estate and urban developer in Northern Europe with a science-based commitment to net-zero by 2028.
Francis is also the founder of The Art of Forests Alliance, a cooperative of the world’s most experienced at-scale forest restoration organizations. After graduating from Harvard and gaining an MBA from MIT, she held CEO and GM roles at leading technology companies, including AltaVista, T-Mobile and social networking company WeeWorld. She also served as CEO of Rated People, the UK’s leading online home improvement marketplace which brings together homeowners and tradespeople.
Neil Passmore – Director
Neil Passmore is the co-founder and president of Pomeroon. Educated at the University of Oxford (BA, MBA), Passmore served in the British Army before joining JP Morgan as an emerging markets banker. He is the CEO of investment bank Hannam & Partners, focused on natural resources.
Abayomi Akinjide – Board Member
Abayomi (Yomi) Akinjide is a partner and co-leader of Fasken’s Global Energy and Climate Group. His practice focuses on corporate, corporate finance and commercial work, particularly in the energy, mining and telecoms sectors.
Akinjide has substantial experience in complex cross-border mergers and acquisitions, financings, private equity transactions, drafting commercial agreements, advising on joint ventures and many other legal issues. He has broad corporate experience and management skills, having led large teams on transactions usually involving multiple jurisdictions in a variety of sectors. He has a good understanding of financial markets and is a skilled negotiator, dealing with both transaction counterparties and regulators.
Akinjide has advised some clients, including banks, brokers, private equity sponsors and corporates. His practice is global; he is recognized as an expert on Africa and dual-qualified in England and Wales and Nigeria. He is an expert in Nigerian corporate and oil and gas law, has published various legal materials in Nigeria and has spoken at seminars on matters relating to the Nigerian legal system.
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