An Engineered, Nature-Based Approach to Carbon Drawdown: Our Investment in Living Carbon
By Lisa Coca, Partner, Toyota Ventures Climate Fund
In the race to net-zero, direct intervention or mitigation strategies are the preferred path for reducing or eliminating emissions, but they can be cost-prohibitive — and in some instances, impossible. The best example of the latter is Scope 3 emissions, which are under the control of suppliers or customers, and therefore affected by decisions made outside the company. While more than one-third of the world’s largest publicly traded companies have net-zero pledges, Scope 3 emissions account for 75% of companies’ greenhouse gas emissions on average. Therefore, the emissions-reduction pathway to a 1.5-degree warming target will require the ability to voluntarily purchase verified emissions reductions, so-called carbon credits. In fact, McKinsey reports that the market for carbon credits could be worth upward of $50 billion in 2030, versus $2 billion in 2020.
Despite strong tailwinds for the growth in demand of carbon credits, the market will be handicapped in the near-term by the lack of a supply of credits that are transparent, cost-effective and produced in high volumes. To date, nature-based solutions, which include forest carbon credits, have constituted the majority of available credits. However, these options have drawn significant public criticism due to a lack of trust related to provenance and data transparency that underpins the quality of the credit. As a result, buyers have turned towards engineered solutions, such as direct air capture, bio-oil, and enhanced mineral weathering, but many of these technologies are still nascent and/or have yet to come down the cost curve. They have fundamentally different energy requirements and cost profiles. Engineered credits are still at demonstration-scale and are currently cost-prohibitive for most companies, with a price tag between $600 and $1000 or more per ton.
There is a clear market need and a gap between costly engineered solutions and lower-quality nature-based solutions, which is why I am excited to announce Toyota Ventures’ investment in Living Carbon. The Living Carbon team has pioneered a new category, “engineered nature”, which leverages their proprietary biotechnology platform to genetically engineer trees so they can store more carbon.
Based in the San Francisco Bay Area and led by co-founders Maddie Hall (CEO) and Patrick Mellor, Living Carbon is on a mission to accelerate the carbon drawdown capabilities of trees on millions of acres of land including managed timberland and underutilized, abandoned and degraded land. The company incorporates genes from plants such as algae, into trees including hybrid poplar and loblolly pine trees to enhance photosynthesis and increase the rate of carbon capture. More carbon means that the plants grow more rapidly and accumulate more biomass.
Living Carbon has demonstrated that trees genetically engineered with the company’s technology have up to a 53% increase in above-ground weight than the control plants. Moreover, Living Carbon is working on two other important fronts to deliver a holistic carbon drawdown and sequestration platform. First, the company is engineering certain species with a higher tolerance for heavy metals such that the trees can grow on degraded land, including abandoned mineland. Second, the company is working to slow down the decomposition process to make the life cycle of the tree longer and reduce the carbon dioxide (CO2) released during this process. The company’s goal is for carbon projects seeded with Living Carbon trees to achieve a more predictable and more verifiable higher amount of carbon drawdown and therefore, higher quality credits.
Living Carbon’s team is composed of experts in molecular biology, biochemistry, and plant physiology. The leadership team also includes members with land management and forestry expertise enabling them to build a robust pipeline of landowner and carbon credit buyer partnerships. Living Carbon continues to pave its way towards delivering high-quality credits on an accelerated timeline, supplying credits to the market in scale within the next three to five years.
We are pleased to join the company’s Series A round led by Temasek along with Lowercarbon Capital, Prelude Ventures, and Goat Capital. Special thanks to Climate Fund analyst Isay Acenas, who played a key role in driving this deal. Visit Living Carbon’s website and the Toyota Ventures portfolio page to learn more.
