Episode 69 of the Reversing Climate Change podcast. You can listen on Spotify (subscribe there for ad-free), Apple Podcasts, or wherever else you listen. Paid subscribers get the ad-free version right here on the page.
You’ve got to crawl before you walk. The Nori team aims to have their carbon removal marketplace up and running this year, and to that end, they are currently running a pilot program with a handful of farmers and ranchers in the US. So, what does the process look like? What is their progress on the software product to date? What milestones has the team reached—and what are their next steps?
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Full Transcript
Announcer: Listening to the Reversing Climate Change podcast by the team at Nori, the carbon removal marketplace, is a show about the innovators and entrepreneurs developing solutions to climate change.
Ross Kenyon: Hello and welcome to the Reversing Climate Change Podcast. I'm Ross Kenyon. We have a special episode, something new that we're going to be doing from now on. [Nori promotion cut from the transcript. It’s still in the audio, but it no longer applies.] A piece of feedback that we got was that sometimes our episodes were a little too inward looking and people wanted us to be talking to people on the outside of Nori. But then we also got feedback saying that they wanted to hear what we were doing at Nori, so it was thoroughly confusing.
Christophe Jospe: Do both, do both.
Ross Kenyon: Yeah, in an effort to make sure listeners can skip over this if they don't care about what we're doing, they just want the carbon removal and climate change information, you can skip this one. If you care about Nori, you wanna learn more about what we're doing, we're taking a deep dive into the pilot we've been doing with farmers practicing regenerative agriculture, digging into the methodology, verification, details of product. The product team has been making a lot of advances and released a new product demo recently. We wanna talk more about that. So that's what we're doing. Did I cover everything there?
Christophe Jospe: Yeah. I think we're going to do this. Well, Michael, you have a, what is it, every two months there's going to be a new product release.
Michael Leggett: Yeah. So we're hoping, you know, product's been really buckling down and getting sharper about our process. And so we're doing a two month release cycles made up of four two week sprints. So every two months we should have a substantial update on, you know, what's, what's happened with product because we're trying to, to have kind of a crisp deliverable by the end of those two months to make the product that much better, but in a kind of way. So we'd love to come back and let you know about the progress we've been making. We also hope to do kind of a video demo, you know, each time we do one of those. So we'd love to kind of come back and give our listeners an update on what's going on.
Ross Kenyon: Yes, we will do that. Seconded, motion passes, fake gavel.
Christophe Jospe: I think we're going to start doing this. So let's back up, do some intros here, and then we'll dive into the actual content. Just so we know all the voices who are speaking, that was Michael Leggett. This is Christophe Jospe. Always happy to be back in the studio with producer Paul. We've missed you, Paul.
Paul Gambill: I'm here. He's a...
Christophe Jospe: We decided that we only have four mics, but there are actually five of us in the room, so if Paul needs to lean over, we're going to Paul him in. Is that appalling?
Ross Kenyon: Oh, man. Oh, my God.
Christophe Jospe: All right. But today's a special day because it's the first time that Ryan, who is actually based in Chicago, Illinois, is here in the office. And so we thought it would be fitting to have Ryan here in the room sitting with Michael. And it's really the totality of what we're doing. Product obviously can only work if we have a methodology, which can only work if there are verifiers who are saying, "Here's how the carbon removal certificates get made." So that in mind, we started talking about the pilot, Michael, you started talking about all the different things that we're sharing and ways that people can access more.
[Nori promotion cut from the transcript. It’s still in the audio, but it no longer applies.] I think videos really are a great way to show is the product looking like. I'm super keen that we've set this six week, eight week.
Michael Leggett: Alright, way to go, eight week. I knew it was even business side of the company, always pushing your deadlines.
Christophe Jospe: Yeah, right. I just want to squeeze like yeah. Anyway, so Ryan, welcome back to the studio.
Ryan Anderson: Thanks.
Ross Kenyon: Welcome to the studio. Welcome back to the podcast.
Ryan Anderson: My last studio was a hotel room in Indianapolis. This is a nice step up.
Christophe Jospe: So very simply, what what is pilot and maybe what what is your role with the pilot?
Ryan Anderson: Yeah, so I'm very fortunate to be working with Michael on the product side and Aldyen Donnelly, the director of carbon economics, in a parallel process developing the methodology for soil carbon removal on US crop lands. And what we're really trying to do is adopt an agile framework of using the product, using the pilot experience with US farmers and eventually ranchers, to really learn by doing and to grow our experience by having people go through the process, submit data, feedback in the early stage as we're prototyping things and working through milestones and the sprint plans and so forth that Michael can get into, and then incorporate that feedback in as close to real time as possible so that we're really responsive to our users.
Christophe Jospe: In English, you say farmers and ranchers. Who are these farmers? Are they doing something special? What makes them eligible to even participate in the pilot?
Ryan Anderson: Yeah, so so far in the pilot, it's a handful of farmers spanning from Colorado to Maryland, several thousand acres involved so far. And Trey Hill, one example, who was on the podcast recently. He adopted cover crops and he's been changing up tillage practices and some of his rotations diversifying his cropping systems. And so we run those through the USDA approved and Colorado State University developed a tool called Comet Farm. And we get these estimates at the field scale over time year by year that's really telling us what a farmer like Trey, what's happening in terms of incremental carbon removal. And then they go through the process of verification to then generate carbon removal certificates. And so, you know, the part that's integrating with product and the pilot is that we're learning what needs to be tweaked in the system in order to make it really streamlined and a good experience for somebody like Trey and his data manager.
Christophe Jospe: And two things to clarify on that. What is incremental number one? Can you define like, and why is Comet Farm so important and letting us be able to quantify what's incremental?
Ryan Anderson: Yeah. And it is a question to be honest that we're wrestling with, you know, internally within the Nori team and why we're very fortunate to have, you know, a peer review committee that we've just really launched in earnest in the last two or three weeks, and that consists of over a dozen scientists from across the country, mostly with expertise in soil science and agroecology, as well as people who have been on the front lines of designing methodologies, piloting projects in other carbon markets and ecosystem service marketplaces, and really lending their experience and their expertise into some of these key questions about baseline, about additionality and even permanence.
And so with incremental, what we're really trying to look at is what goes sort of beyond a business as usual, sort of a performance-based approach where our outcome is focused on there's more carbon coming out of the atmosphere being stored in soils and we're only crediting that portion that goes beyond that which would have happened otherwise. So in Trey's case, you talked about switching to a lesson, kind of a no-till planning, so less intensive tillage, in his case, no intensive tillage, as well as using cover crops. So those changes increase how much CO2 he's pulling out.
Ross Kenyon: And you're talking about what's incremental is the difference, the difference between his old practices, which were intensive tillage and no cover crops, and his new practices, which is no-till and cover crop.
Ryan Anderson: Right, and what Comet Farm enables us to do is see that year by year, field by field, and so then what we can do with the peer review committee and as we formalize our methodology for croplands is really spell out how we define the baselines, when those project start dates are occurring, and then the historic data that precedes that so that we can have clear and defensible baselines that we're taking forward into the carbon removal.
Ross Kenyon: Yeah, that seems really important just to hammer that home that Comet Farm lets us model the hypothetical continuance of the old practices. The only way to do that if we didn't do this via a model would be to have like a control field and actually take soil samples, basically say, keep intensively tilling this other field so we can measure what happens there to compare against. And luckily through the model we don't have to keep intensively tilling and not use the cover crops. You can make those changes and we can model the difference between them. And then it might be three to five years until you see a result. So you're...
Ryan Anderson: With soil samples.
Ross Kenyon: Yeah, so the model lets us get that a lot sooner.
Ryan Anderson: Because it projects 10 years.
Ross Kenyon: Totally, totally, yeah.
Christophe Jospe: There's so many exciting details. It's fun. I mean, we're all so deep in the weeds and I think part of our job here as hosts is to pull it out and say, "Okay, let's put it in English." And so you used the term additionality. I actually want to put you on the spot with additionality. How does Nori think about additionality and why do we think about it this way in terms of actually being able to scale a carbon removal?
Ross Kenyon: The concept of additionality comes out of what past markets have done when trying to create carbon offsets. So if you think about a potential carbon avoidance project, like say you're building a dairy digester, which takes in cow manure and burns it so that it emits carbon dioxide instead of methane. So it's less greenhouse gas or in warming potential going into the air. And additionality tests put in place for projects like this in past markets so that you don't get people who are getting rewarded for doing what they would have already done anyway. And that's sort of called the, or we think of that internally as the financial additionality test. Are these people doing it because the fact they're getting paid to do so?
We don't have a financial additionality test in the Nori market. And the big reason is because we're talking about carbon removal as opposed to carbon avoidance. And it's much more straightforward just like to wrap your head around intuitively that if you're taking some action to remove CO2 from the atmosphere and store it somehow, by definition, you're doing a new behavior. But it is still important to be able to set a baseline to measure how much is getting removed and to ensure that this is actually like a new practice that you're doing. So when we think of additionality, we're looking at how much carbon dioxide is being removed relative to the baseline that gets established. And by working with Comet Farm, Comet Farm helps establish a dynamic baseline. Because carbon is constantly in flux in soil, meaning it's constantly changing based on all sorts of different factors like what you're growing, when you're planting, when you're harvesting, what the weather is.
Ryan Anderson: Soil type.
Ross Kenyon: The soil type. Yeah, if you have a flood year, a lot of that carbon is going to get released. So what we're trying to measure for additionality is how much are you storing by switching to new practices like what Michael and Ryan were just talking about relative to what would have happened if you had just kept on going with the old practice? It's very clearly you're carbon farming, you're providing a service, Nori wants to help you monetize that service.
We're trying to build a software product around that. And in the last episode that we did with you, Michael, you talked about sort of thoughts that go into human centered design and how to build something that works and then iterate from there. And we like to use metaphors probably to a fault. And so we're talking about building a vehicle, right? Something that gets you from point A to point B.
Michael Leggett: Yeah. Well, let me, let me step back a little bit and say. We think of our partners and our customers. And our partners are, well actually we're talking about customers first. In the flow of end to end, it is someone removes carbon. We often call those our suppliers. So in this case with the croplands methodology, that's gonna be a grower or farmer and his team. And so they're removing carbon, they're providing a service that we're helping monetize. Then there's some way to quantify how much carbon they removed. And we're doing that through Comet Farm, that partnership. Then they are able to, we are able to verify that it was removed. And that's our second kind of customer's a verifier. So we have suppliers removing it, we're able to quantify it was removed, and then we're able to verify it was removed. And with each methodology, that verification process is its own thing.
And then finally, we're able to then turn that into a CRC and issue it, which can then be sold and bought by a buyer. So we think of those three customers, the suppliers, the verifiers, and the buyers a lot on product. And we've been trying to, we think about where we're trying to get at the end of all, by this year we want to launch a market. You want to launch and make that work for all three of those customers and how do you go about that? One way to go about it is you build bit by bit. You could think of it as like, I'm going to use a different metaphor. Think about it as like cleaning a room. There's one way, which is I'm going to start in the corner and make that perfectly clean before I move on to the next corner of the room.
So we could go make things like 100% done for farmers before we even touch verification or the buyers. I think that we briefly flirted with kind of that approach, but we've changed to more of a breadth versus depth. We do a first layer of cleaning on the room. Maybe we pick up all the paper. You get into the making things tidy methodology. Building products is often called like min viable product. And there's people that have written about this and there's flaws in this metaphor. But what you were getting at with the modes of transportation is if say a company was trying to help people get from A to B, they might build a skateboard or they might build like a really minimal version of a car that has four doors, a steering wheel and an engine and that's it and wheels. Or maybe it has to actually manually pushed by the team.
But the idea is that you learn more about transportation, learn more about what the customer needs. And so we've been trying to build a very minimal version of the product for each of those customers, for the supplier, for the verifier, and for the buyer. And we focus more on the supplier and the verifier first. So we're the furthest with the supplier. We've made some progress with verifiers, and we've made almost no progress with buyers in the very first release, which we've affectionately called the skateboard release. We're now halfway through with the scooter release which is basically attached some handlebars to that skateboard. And so that's going to improve the product for the supplier in some concrete ways and start to move things. We're also making progress with the buyer accounts.
And what's really exciting, if I'm just going to jump into it, is part of this release, we want to have very concrete goals, kind of at least two to three concrete things we're trying to do. In this release, the scooter release will happen this month in April, we are wanting to open up the product to a select few of our first customers or farmers. So that instead of what the process on the pilot has been so far has been a very manual one. It was first with largely just me. And then as Ryan's brought on, it's come on, thank you Ryan. It's been exciting to bring in someone that's worked with farmers in the past and a lot more expertise. So far we've been kind of manually talking. We've had calls, we've had emails, gone back and forth swapping data.
Getting the data we need to fill out Comet Farms, sometimes we've run that through their API. Sometimes I've manually put that data into Comet Farm to get these estimates to quantify. Then having manual conversations with the verifiers about how would we verify these inputs into Comet Farm. What's going to change and allow us to start scaling beyond handful of pilot participants to 20 plus or more hopefully and well beyond that into the future is us making the product available to them. So they can log into the Nori app, set up their project, set up the different fields for the cropland methodology. It's really based around the fields that the farming practices and those changes are happening. The boundaries for those fields put in the data. And once they're happy with all that, push a button that puts packages all that data, sends it to Comet Farm over the API, gets back a result, and shows that result to the farmer.
And sets them up to say, yeah, this looks good. I'm going to add some more fields, or maybe I'll adjust the plan moving forward. And now I'm ready to go on to verification. All that's going to be ready so people can just use it without us having to handle it. So instead of us having to be there to be the magician behind the curtain making this work, all of a sudden they're going to be able to interact with the software directly. And we often talk about this as self-serve. And we can switch to a more supporting and learning role. We're supporting them if they get stuck. We're learning where they get stuck and making the product better. And we continue to build that functionality for verifiers and buyers in the meantime.
So the primary goal for this release is this whitelisted launch. The other partner that we're working with very closely on this is Granular, who has a lot of data and how do we pull in the data they have to seed that so that farmers aren't having to start from scratch. And we automate that as well. So that's really exciting. And they're also going to be a source of our next set of 10 to 20 farms, we believe, are one of the big sources. And we're talking to other big ag companies about bringing other farmers in as well. But it's really about us supporting these really important partners at scale. We're a small team. We can't do this manually. We always knew that that was never the plan to do that. But we wanted to get off the ground and start learning. And we've learned a lot through the first handful that we've done.
So that's really exciting. And then the one other thing, and I'll stop my long diary. Y'all can edit this in post, right, if I went on too long.
Ross Kenyon: Yeah, Chris, I've given him a long leash. I gotta say.
Christophe Jospe: Yeah, all I can do is just glare at you to be like, wrap it up, Michael.
Michael Leggett: Wrap it up, yeah. Yeah, I luckily sat far enough away to kick me under the table.
Ross Kenyon: No, all this is super, super relevant.
Michael Leggett: So the last thing we're working on is we want to have an internal version simulate a forward contract auction. So one of the ways that you can actually buy and sell CRCs, we want to be able to run a simulation of that internally as we start to move forward and try to support buyers. So really excited about those two milestones.
Christophe Jospe: Yeah, that's amazing. I saw Paul wanting to lean in, so it looks like he probably wants to make a comment. I'd just like to make one comment. Shaken his head so not, well, so then that'll make the comment that he thought he might have said, but that what that means is really if you're a food company and you have farmers in your supply chain who have been farming carbon and want to say I want a way to prove this is how much carbon I've been farming, we are rolling out a product at the end of this month where those farmers can come in, create accounts and actually have the data to show hey, I'm farming carbon.
And the great deal for Nori is we're saying if you've been doing this thing historically, you want to work with us to make provisional CRCs in the pilot, this is a way to have CRCs going back five years and then signing a 10 year contract, well, you'll continue to farm carbon. And I sometimes pinch myself to think like, hey, we're, we're actually doing it. We're doing it.
But Ryan, I want to pass this back to you as someone who has worked with farmers in the past and collected a lot of the data and thought about ecosystem service payments. What do you see some of the challenges that Nori might be running into? What is going through your mind when you're like, "Oh man, there's a software product." Here's how this might look in the pilot. What's in Ryan's head?
Ryan Anderson: Wow. I don't know if you want to go there. Yeah, so one thing that was running through my mind is Michael was going through the different sort of features or elements of the self-service portal. And I think that's a particular distinguishing sort of feature that we have in the product roadmap is that within this portal, farmer as the supplier in the Nori parlance, can manage their digital wallet. And as they're looking at and they integrate their data with the Comet Farm tool, there are other baseline generators, models, and quantification approaches we can bring on later through methodology and peer review feedback. For now, through Comet Farm, they will generate these estimates on the fly.
And one of the biggest questions that I got in my former experience as a carbon credit aggregator, okay, this is all well and good, but how much am I going to get paid? What's it worth to me? Bottom line question that most markets, actually, I would argue all markets before have really not been able to answer. And now we've put this power sort of back in the user's hands, in the customer's hands, so that they can see this and they can see under different scenarios, whether they're using the spot or forward contract options for exchanging the CRCs for Nori tokens, they could project it, they could look at what am I going to get now or when can I pull the trigger on a verification when it would be worth it financially that I could break even given the price that it's clearing out.
So I think that's a really exciting feature that could also create a lot of anxiety for the customer that they have one more thing that they need to watch, a digital asset. So I think it's going to be designed in a very careful way in how it presents that information. But it's exciting that somebody can see, oh, I get a sense of after a couple hours of investment in data management and putting my practice changes into this system, then here's what I can expect to get out of it. And they can do with that information what they want.
Whether they want to manage that on their own or work through a data manager like some of the partners we're working with in the pilot, power is really in their hands. And that's very exciting because previously the experience for the farmer as a customer has been you submit something through a project developer, a third party, and maybe six months, 18 months later, something might get through the whole pipeline and get verified and transacted and retired. And then a check is cut. So this takes out, not only short circuits the timeline, but it also drastically reduces transaction costs.
Michael Leggett: Well, I'd love to tease apart two things you said there. So one is, well, first off, I'm excited to hear that's exciting. But just to really emphasize what you were saying, there's managing the digital assets and that's kind of half of it. But the other half I hear you talking about being exciting is them getting an idea of what they stand to gain. We're not only coming back with an estimate of how much carbon you're pulling out of the air, we're also giving you a tool to plug in certain assumptions around what is a tonne of carbon worth. And we have our own guesses, but really, it's, I think, for regulatory reasons and other reasons we can't, we don't know what it's gonna be worth. That's for the market to decide, we don't decide that, we don't control that. But the farmers could make some educated guesses as to what that will be worth per tonne and turn that into a year over year possible stream of revenue.
They could also plug in certain estimates around costs. What is it going to take me to adopt ad cover crops? Or what would it take me to add, switch to no-till? So if they have estimates for those costs, they'll be able to plug that into our little calculator as well. And again, turn that into real dollars. What is this going to mean at the bottom line? And what I want to get to is you're right, that could take a couple hours to kind of get to that because you have to plug in all of your data. I think there's ways we could turn that into minutes instead of hours. And if they've already entered it through a platform like Granular, that's one of those shortcuts. That's one of the shortcuts. There's other ways I think that there's interesting tools if we were able to support Comet Planner having the API or there's other ways they could get like a ballpark.
But critical is that we are constantly thinking about how can we make it easier and faster for a grower to get an estimate of what they stand to gain. And it's a projection, it's an estimate, but it's more than nothing. And I want them to be able to get that easily, and I want them to be able to get that for free. And I want them to be able to get that on their own terms, not through some third party. I want them to be able to go directly to Nori, and I want this to make sense to them and say, "What's in it for my business?" They've got a business to run. And so I think that that's a really good mentality we've had and something we're working towards and it will be part of this whitelisted launch, then being able to get that estimate.
Christophe Jospe: What I love about what you're saying is we're trying to create a digital commodity and farmers understand commodities. If you're growing corn, you want to maximize your corn yields. And so in this way, we're trying to build a tool that helps farmers assess how can I maximize my carbon yields.
We've been throwing around the term forward contract auction and we've talked about this briefly before but I don't think we've succinctly defined it and some of our listeners may not know what it is. So Paul, you are oh so good at putting things in the most eloquent way. What is the forward contract auction? How does it work? And take it away.
Paul Gambill: Forward contract is an agreement between two parties where they say today is, okay, today's actually April 11th when we're recording this. So today's April 11th and we agree that on October 11th, six months from now, we're going to transact in some commodity and we're agreeing on the amount of that commodity and the price of that commodity today, and the transaction is going to happen in the future. And parties do this mostly to de-risk the acquisition and sale of commodities.
So if you are like a grocery store and you're trying to make sure that you have enough apples on hand to sell them to customers like throughout the year, you're going to be engaging in forward agreements like this so that you ensure that there's actually something being delivered because if there's say a shortage of apples six months from now, well all the other grocery stores who didn't make this agreement are going to be clamoring to try to get the last of the apples that are for sale and you already have an agreement in place from six months ago. Maybe you paid a little bit more just for that safety and assurance, but you're going to get them. That's what a forward contract is.
Now we're doing something that's a little bit novel when it comes to this. I don't know of any other instances where anyone's implemented something like this before. We're giving the ability for both suppliers and buyers in our market to engage in forward contract for the future. But because of the nature of how we need to maintain the price peg of one Nori token to purchase one carbon removal certificate, we had to come up with kind of a unique thing here. So we're combining forward contracts with a single price Dutch auction. And a Dutch auction or a single price Dutch auction like this works where you have, so I'll just describe it, how it'll work in our market. You'll have buyers and suppliers placing bids on both volume of CRCs and price of CRCs.
So what will happen is we'll have these auctions periodically. Our plan initially is to hold them quarterly, but we would love to get to a point where there's so much demand that we're doing these as frequently as weekly. And there will be, say, a 48-hour period during which buyers and suppliers can place their bids. And they'll place those bids anonymously. Not even Nori will be able to see what those bids are, who submitted them, or the price, or anything like that. And if you are bidding, you could place multiple bids. You could say 10,000 CRCs at $3 and 10,000 CRCs at $5, and maybe one of those gets triggered and maybe one of them doesn't. So both buyers and suppliers are going to say, "I want to sell or purchase X number of CRCs at this price per tonne of CO2."
Ross Kenyon: Really a ceiling or a floor price, right? If I'm selling, I'm saying I'm not willing to sell anything less than this. If you give me a higher price, great. And as a buyer, I'm not willing to pay any more than this if I can pay less, great.
Paul Gambill: Yeah, yeah, right. It is a way in that sense to de-risk what you're doing. Because by placing your bid, you know that you're not going to do any more than this. So let's say a supplier, a farmer has 10,000 CRCs and they want to sell them for no less than $5 per tonne. And there's a buyer who places a bid for 20,000 CRCs and they want to pay no more than $6 per tonne. Well, if they're just these two participants in the auction, then it's very simple. We say that, yes, there's a match. So the buyer and the supplier will get matched up and then they will transact. So the buyer is going to be able to buy 10,000 CRCs because that's how many the supplier had. And the buyer will pay $5 per tonne.
And notice that I keep saying dollars per tonne because that's really important to note here. So in the settlement date in the future, however long that might be, that's a detail to be worked out. Let's say it's a year from then. Buyer is going to purchase those 10,000 CRCs and they're going to be at $5 per tonne. But we need to maintain that peg of one token, one Nori token per one tonne of CO2. On that day, the value of the Nori token in the open exchange markets is $5, then this is really simple.
Ross Kenyon: On that day of settlement, you mean?
Paul Gambill: That day of settlement, yeah. This isn't now, we fast forward to October. I'm giving you the CRCs, I promise. The price of the token may be different. The token, let's say it's $5, buyer purchases 10,000 CRCs and it costs them 10,000 Nori tokens and that's it. Simple transaction. Say on that day that the token is worth $3. So it's less than that $5 settlement price. Buyer owes the supplier $5 per tonne. So they're going to pay one Nori token plus $2 in cash in order to get each CRC.
Now let's talk about the other scenario where the Nori token is actually increased in value beyond what the settlement price is. Let's say it's $7. In this case, we want both the supplier and the buyer to share in any upside from the token going up. This way, everyone benefits from the price of the token increasing, and it eliminates any bad incentives that might exist for a buyer to try to short the Nori market and drive the price down or something. So let's say it's $7. So the buyer is going to pay one Nori token, but then the supplier is actually going to pay back to the buyer $1. That way, the buyer is $1 ahead and the supplier is $1 ahead from what they thought they were doing. Everyone wins in this scenario.
Michael Leggett: The thing I'm excited about on the product side is I feel very conflicted about the forward contract auction insofar as it seems simple and obvious and intuitive, and yet it also seems complicated. I feel like it's sometimes easy to get lost in all these different scenarios. And so what I'm really excited about doing on product is building a simulation of this such that eventually anyone can come in and just use it. And like, hopefully what we want to do on product is make this intuitive, kind of got your hands on it. And I think that that's just a really important thing that we can do to product is to make this real and make sure it's intuitive to everyone that's participating in it. It should be as simple as buying eggs at the store. Maybe a little bit more complicated.
Paul Gambill: Well, that's where it's important to recognize that what we're doing here is we're giving optionality to the participants in the market. Because the spot market works just by if you're a supplier, you're a farmer and you are earning say a hundred CRCs in a year, you can list those in the spot market. They'll just go into the back of a queue and then whenever someone shows up to buy more CRCs at the front of the queue, when you get to the front, you will get one Nori token per CRC that you sell. But the Nori token value might fluctuate. You don't know what it's going to be.
But that might be worth it to you because maybe you get that cash sooner than you would receive it from the settlement of the forward contract. That's useful if it's valuable to you to get that cash flow happening faster. Or if you care about being able to set a floor price or a minimum price that you're going to receive for your CRCs, then maybe you want to participate in the forward contracts. We're putting these options out there. It enables lots of different things for the different participants to work within the Nori market in a way that suits their business and their business model. And this is something that we, as you say, Michael, we want to iterate on. We want to test out and improve as it goes. And I think we're going to learn a lot as the market gets going.
Ryan Anderson: That's also a case, I think, for buyers to get involved in this design and pilot phase of the market development because we can design the product in such a way to make it most useful for those companies and their end user needs. A question that I mentioned before that I got all the time from farmers was also shared with buyers. Well, is it worth it for me to have people, you know, have our growers paid in this effort? Because if the financial return in the optionality, as you call it, Paul, isn't there, we don't surface it for every customer, buyers and suppliers alike, then we're just continuing that uncertainty and that's going to lead to fragmentation and reduced supply when there's actually a much larger sort of pent up demand and supply potential.
Because the opportunity is vast. I mean, when we have this self-service portal live, could be that yes, there are 20 or so that come in through existing partnerships. We don't know when we put this out there, we could potentially get thousands and we could get hundreds of thousands if not millions of acres just from the US. It's possible.
Michael Leggett: I think we're going to try to crawl before we walk so I think that we will open it up but it will actually, we call it a whitelist launch or a whitelist soft launch A because the whole product's not built. I've got a boat with a hull that will float in the water. I'm looking ahead to bicycle and [unclear]. Sure, yeah. That's definitely where we're, you're right. Absolutely. When you think long-term, that's absolutely what we want to enable as anybody to show up and just participate. To clarify what we'll launch later this month is one where we actually won't let anybody just sign up for an account. We will create the account and then give them to the people that we're working with. We're trying to still just be careful about adding each layer and making sure things are working as we add more and more to the product.
Christophe Jospe: I think that the big thing about what we're talking about with this self-service portal is that right now the pilot projects that we've been working with, like you, Michael, have been taking all the data in that they provide and then entering that into the Nori app.
Michael Leggett: I am the Nori app right now.
Christophe Jospe: Yeah. So it's about taking that off of your shoulders and then working with a limited number of people so that they can do it themselves.
Michael Leggett: Super excited about that.
Christophe Jospe: Sure you are.
Michael Leggett: Yeah, I guess also for selfish reasons. But yeah, no, I think that's start of us scaling and yeah.
Christophe Jospe: And we, Nori, need to qualify you if you're working with a large supplier that has carbon farming in its network. Yeah, we want to have those conversations. And Ryan would definitely be the right person to talk to, so it's nice to have him on the air here. Ryan, I want to turn this back just to close it out a little bit around how all this fits together in terms of the peer review committee that's standing up here and sort of what you see them doing with the pilot and with the data that's coming through the self-service portal and how this kind of moves from effectively a pilot to a real market that is working.
Ross Kenyon: And one more just add on there. How is what Nori is building in this scientific peer review committee slightly different and sort of creating and plugging into something that's already there without trying to reinvent the wheel?
Ryan Anderson: I'll start with the second question first because the way that we're going about it is more similar than it is different from other voluntary and compliance carbon market initiatives where in every case that I'm aware of, when a new methodology or a standard or a verification approach has been proposed, there's some degree of public comment, expert peer review, science advisory committees that provide an outside and objective voice into the process that a registry or a marketplace is developing. So that's absolutely critical for both transparency and for the integrity and also just the objectivity of what the marketplace is doing. So I think that's our overarching objective.
Also get into the other question of what it will be doing. The peer review committee, we're not looking to them to write the methodology. It's more like, hey, we have this idea about how we're handling additionality and permanence and things that come up in every conversation in these circles about carbon removal. Here's our thinking on this. We want you to weigh in on this. We want you to provide your experience and expertise on this. We're not asking you to write it and to just talk about it ad nauseam or convene multi-day in-person summits like you might see through Intergovernmental Panel on Climate Change and how they hash out policies and guidance and standards or ISO, the International Organization for Standardization.
We're saying we're leaning on those standards and those agreed upon principles and methodologies and trying to take the best from that but also say, we're going to go about this in a different way. We're going to define things slightly differently and that's going to challenge people's thinking. And I think that that's going to, you know, getting this peer review committee input in our process as we develop the methodology and go from pilot to a full scale launch of the market, then we're going to have, I think, a lot more robustness in what we're doing and how people understand what we're doing and why it matters in the way that we're doing.
Christophe Jospe: Michael, do you have any final comments you want to put out there as far as to expect?
Michael Leggett: I mean, I think the other thing we haven't talked a bunch about is verification and the use of research in our process. I think part of good human-centered design practices is realizing you only know so much. It's really important to go talk to the people that you're actually trying to serve and make sure you're solving real problems. We are here to both solve real problems in the world of climate change, but also solving real problems for people if we're not creating value and meeting real needs, we're not going to go anywhere.
So I think to that point, we've definitely done two rounds of research with people that have been verifiers in traditional markets. We've identified a few people that we really enjoyed working with or really enjoyed those sessions and we've engaged in a contract to have them help us write the guidelines for verifications, which is kind of part of the overall methodology. And I think we've definitely been talking to buyers. Alexsandra has been talking to a bunch of them. I mean, Christophe, you've been talking to a bunch of them. Paul has been talking to them. I think it'd be great for product to start engaging with buyers soon and start that kind of discovery process of making sure the company and really the product is serving them and meeting their needs and meeting their expectations and working the way that they want and expect or delighting them. It's also possible that we built something they weren't expecting, but then they see it and they go, "Oh my gosh, absolutely, I need that," or that's going to be fantastic.
Making sure that things fit together with our customers is also an important part of that iterative approach. We've made some progress on the verification side, and I think we'll have more to say in our next release. When we come back around, we should have a lot more to say about verification and about buyers. Hold me to that. I think the final bit is our, I hope our next demo video is sooner than, but we're doing this podcast about halfway through our release, so hopefully in early May. We'll have another demo video. [Nori promotion cut from the transcript. It’s still in the audio, but it no longer applies.]
Paul Gambill: And I want to put my CEO hat on for a moment and put out there, since this is like a general, like what's been happening at Nori update. [Nori promotion cut from the transcript. It’s still in the audio, but it no longer applies.]
Michael Leggett: Yeah, come be part of this. It's just been awesome to be part of it as kind of an employee, but I'd love for more people to be part of it as an investor too in making this possible.
Ross Kenyon: Absolutely and just want to say reversing climate change is a team sport. We're not in it together. Yeah, whether you are someone who wants to pay for carbon removal or you're someone who wants to get paid for carbon removal and specifically that's just US farmers but over time we expect that to expand or you're someone who wants to verify that carbon removal is happening or you're just a smart person who wants to give input into the systems that Nori is using to estimate and quantify carbon dioxide removal. We're all in it together. We're trying to learn as quickly as we can and as responsibly as we can and really be super transparent about what it is that we're learning. And so thanks for listening. Have a great day.
