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How Nfts are being used as carbon credits

The underlying carbon reductions and advancement toward companies' climate change objectives can then be claimed.

Photo by Brian Patrick Tagalog / Unsplash

One metric ton of CO2 emissions is offset by one carbon offset credit. Compliance credits are required by local, national, or international agencies, but there are also optional carbon markets where companies can buy credits. The underlying carbon reductions and advancement toward companies' climate change objectives can then be claimed.

Why use Nfts as carbon credits?

In the past, off-chain trading was the norm for voluntary carbon credits. But this strategy has two significant flaws. Scaling is difficult, and even if certification agencies vouch for the validity of carbon offsets, there are significant quality differences across the many offsetting operations. Through open platforms that expedite the funding of carbon offsetting initiatives, blockchain technology can aid in the resolution of both issues. Additionally, it makes initiatives traceable and trackable because of its transparency. Numerous blockchain projects aim to increase the efficiency of the markets for voluntary carbon credits. Others prioritize NFTs, while some businesses, like FlowCarbon (1), issue their fungible tokens for one metric tonne of CO2 emission reduction.

Mint NFTs

The platform MintCarbon (2), supported by the software firm Deepmarkit, enables owners of carbon offset projects to mint their offsets into NFTs. A further frequent issue of the old carbon markets, dual listing of the same carbon credit, is prevented by the platform's assurance that a certification company examines all listed carbon credits. The generated NFTs could incorporate various project information, such as visual information, costs, and statistics.

The platform retains up to 10% of the value of the credits as a minting fee. Any decentralized NFT marketplace, such as OpenSea (3) and Rarible (4), is where owners of carbon credits can advertise their NFTs for resale. The transaction fee for reselling an NFT is divided between MintCarbon and the owner of the  NFT credit. The NFTs are in the ERC-1155 standard, and the platform is based on the Polygon blockchain. Developers of carbon offset projects can fractionalize their NFTs to represent a single unit of CO2 because these standards can simultaneously represent numerous token kinds, both fungible and non-fungible.


Another blockchain business that connects NFTs with initiatives that use existing natural resources is CarbonAble (5). Instead of owning the forest parcels in this case, NFT purchasers receive a certificate attesting to their participation in a project to offset carbon emissions through natural means. Owners of NFTs will be able to keep track of on-field activity, much like Moss, thanks to the integration of satellite imagery technology.

To approve a carbon offset project, it must satisfy three of the 17 Sustainable Development Goals for CarbonABLE. It aims to find and fund these decarbonization projects through selling NFTs while rewarding NFT buyers with high stake yields.