Canada’s Key Carbon, launched in 2021 as Carbon Neutral Royalty, is building a global portfolio of carbon removal projects. The idea is to generate streams and royalties of high-integrity carbon credits for its corporate backers “to meet evolving compliance standards,” said Key Carbon’s Luke Leslie (see, “Corporate buyers nudge voluntary carbon markets toward higher-quality projects”).
The Vancouver-based company, which operates as a “permanent capital vehicle,” similar to an evergreen fund, formed an agreement with InSoil (formerly HeavyFinance) to tap into its zero-interest green loans to small and mid-sized farmers in Europe.
The conditions: The farmers agree to transition to regenerative ag in exchange for a fixed share of the carbon credits generated by their farmland. Key Carbon will retain royalty rights to the credits, which will be verified by a third party to meet the requirements of the EU Carbon Removals Certification Framework.
Carbon markets
InSoil’s Laimonas Noreika said the $114 million deal will allow the climate fintech company to “reach more farmers, accelerate climate-positive outcomes, and deliver the kind of high-integrity credits the carbon market increasingly demands.”
As part of the royalty agreement, InSoil received a €3.7 million ($4.2 million) investment from Key Carbon, which it will use to expand across 2.5 million acres of European farmland by 2026. KeyCarbon estimates that target will enable the sequestration of over 35 million metric tons of carbon emissions from the atmosphere.
Low-carbon farming
EU Soil Carbon Corp, the operational arm of Key Carbon’s partnership with InSoil, will support InSoil’s carbon farming business, which provides assistance to farmers in their regenerative ag transition.
Research has shown adopting climate-smart agriculture practices can help farmers boost farm productivity through improved soil health, increase biodiversity and build climate resilience.
“As farmers across Europe face headwinds from climate change and global regulatory dynamics, financial and agronomic support from projects like these are critical,” said Noreika. InSoil has deployed over €80 million of its zero-interest loans to over 3,000 farmers since 2020.
