Navigating Carbon Credit Hurdles to Mobilise Climate Finance in the Sahel
A blog by Alison Filler, Carbon Markets Technical Expert for the Drylands pilot
Earlier this year, the Frontier Tech Hub launched the Drylands pilot, an initiative to prevent the loss of arable land in the Sahel by building partner networks and designing nature restoration projects. As part of this initiative, the FT Hub and FCDO have partnered with Sand to Green to test a tech-enabled approach to agroforestry in arid regions of Senegal. By harnessing field and satellite data to verify the carbon and biodiversity impacts of land regeneration practices, the team aims to establish a pathway to carbon finance for smallholder farmers that can be replicated across the Sahel and other regions that are at risk of desertification. In the months ahead, the Drylands team must navigate a series of obstacles to succeed in the Voluntary Carbon Market (VCM).
Understanding the Voluntary Carbon Market
The VCM is a market-based mechanism designed to incentivise the reduction of carbon emissions. Projects that prove measurable reductions and removals of CO2 from the atmosphere are issued credits. Each credit represents one tonne of CO2e, which is the standard metric to represent carbon dioxide or an equivalent greenhouse gas, where “e” stands for “equivalent”. These credits are sold to buyers – often companies, or sometimes individuals – who wish to demonstrate an investment in climate action.
Example: Using Carbon Credits to Offset Emissions
Many companies purchase carbon credits to offset the emissions they produce through their business operations. For example, a taxi company may embark on a net zero strategy by transitioning to a hybrid fleet, reducing the emissions of its operations by 80%. To account for the remaining 20% of its emissions, the company can buy a proportional amount of carbon credits, which support projects that have removed or reduced the amount of carbon from the atmosphere. This balances the company’s carbon footprint to “net zero” on paper, which the company will either report to its local government as a matter of legal compliance or communicate to its consumers as a voluntary act of good will to protect the environment.
Currently valued at just over $2 billion, the VCM is projected to grow exponentially in the coming years, potentially reaching $50 billion or more by 2030 as more businesses commit to net zero targets and seek ways to mitigate their carbon footprints.
However, the market has yet to scale on a global level in the two decades since its inception. A series of obstacles has impeded market growth, namely:
inconsistent process integrity (how a credit is certified) and data integrity (the information that proves the climate impact of the credit);
an opaque and fragmented market; and
significant barriers to participation that limit social benefits, equity, and inclusion.
Three compounding issues affect carbon credit integrity and carbon market access
These barriers and inefficiencies are prompting a flood of innovations and new entrants into the voluntary market, such as digital marketplaces to facilitate transactions, satellite and Internet of Things (IoT) tools to increase the speed and reliability of impact measurement, and distributed ledger technologies to verify payments to local partners.
Sand to Green: Regenerating deserts into abundance
For a team like Sand to Green that is building tech innovations for land regeneration, carbon finance can be transformational to grow its operations. According to Benjamin Rombaut, CEO and Co-founder of Sand to Green:
“Carbon finance is critical to unlocking the full potential of large-scale land regeneration. It provides communities with the resources needed to implement regenerative practices that not only capture carbon but also restore ecosystems. Smallholder farmers, who are on the front lines of climate change, benefit from these efforts through increased resilience and economic opportunities. In the Sahel, this approach brings us closer to realising our vision of a regenerative agricultural system”
Sand to Green develops plantations specifically designed for arid desert environments. These plantations are carefully managed through a combination of field and satellite data that provide a holistic view of both the ecological and economic impacts of their work.
The Moroccan-French startup was created in 2022 by Benjamin, alongside co-founders Wissal Ben Moussa and Gautier de Carcouet. In just two years, the team has piloted its approach in 50+ hectares of desert across three sites in Morocco. They have successfully cultivated a variety of fruit trees, as well as herbs like rosemary, geranium, and citronella.
Tapping into the VCM
So, how does a group like Sand to Green unlock finance from the carbon market?
First, the team identifies their target buyers and develops a go-to-market strategy. The VCM is an opaque market, plagued by information asymmetry, meaning market actors struggle to find data on transaction sizes or who is buying and selling credits and at what prices. It is also a fragmented market, meaning buyers and sellers are not well connected and often rely on market-makers and intermediaries to facilitate transactions. To overcome these barriers, Sand to Green carefully strategises the most direct route to sell the carbon credits generated by their agroforestry projects.
Second, the team decides how to generate their carbon credit supply. Specifically, they determine if they want to issue credits through an existing carbon credit standard, such as Plan Vivo, Verra, or Gold Standard, or self-certify their own credits. Within the VCM, each standard body develops its own definitions of process integrity and data integrity. Sand to Green must consider which standard, if any, is best positioned to certify their projects to ensure their carbon credits are recognized and valued appropriately within the market. Alternatively, Sand to Green may choose to self-certify its credits, whereby the team develops its own methodology and quality standards to verify the emissions sequestered from its projects, without the brand association of an existing carbon standard. Look out for our next blog, in which Sand to Green will explain why they have chosen to pursue Plan Vivo as their standard for this pilot.
Finally, Sand to Green maps out their implementation strategy, considering which local partners they will engage to achieve the greatest impact. Due to the obstacles highlighted above (inconsistent processes, opaque systems, implementation costs, etc.), the VCM is understandably difficult to access for many would-be participants, especially those located in the Global South. As a result, carbon finance does not always reach the communities that are facing the most immediate threats of climate change. To achieve its ultimate objective of creating agroforestry plantations to support communities’ economic and ecological prosperity, Sand to Green is co-designing a benefit-sharing approach with its local partners to ensure that a fair share of carbon credit proceeds verifiably reach communities in the Sahel.
Moving forward
While the challenges that Sand to Green (and many others) face in entering the VCM are indeed significant, they also present opportunities for innovation. Sand to Green is challenging the VCM to evolve for the benefit of smallholder farmers - by leveraging digital technologies for impact measurement, charting a new course for agroforestry methodologies, and sharing the stories of their progress for others to learn from and replicate.
Sand to Green is actively seeking partners—including financial institutions, governments, NGOs, and private investors—who share their vision and are willing to collaborate toward bringing this innovative model to life.
By effectively mobilising climate finance, the Drylands pilot can help communities in the Sahel and beyond to both mitigate and adapt to a changing climate by turning vast stretches of dry sand into robust food systems that nourish communities and ecosystems, alike. Altogether, to achieve our vision for a better world in Drylands, and specifically the Sahel – putting people first, tipping incentives towards positive climate outcomes, and supporting thriving communities.
Call to action!
Do you share in the Dryland pilot’s vision? Are you interested in collaborating with Sand to Green to bring this model to life?
Get in touch!
Benjamin Rombaut (S2G) – benjamin@sandtogreen.com
Mana Farooghi (Pioneer) – mana.farooghi@fcdo.gov.uk
If you’d like to dig in further…
🚀 Explore this pilot’s profile page
📚 Read our vision for drylands regeneration and a better world
📝 Read more about innovation in the FT Hub Deep Dive on Frontier Technologies for the Voluntary Carbon Market
