Carbon removal and storage technologies, such as mineralization, ocean-based carbon removal and direct air capture, represent significantly less than 1% of carbon credits available on the market today. But these climate solutions are critical to reaching global climate goals.
Though more and more companies worldwide have begun taking meaningful action to reduce their carbon emissions, carbon removal capacity is far below where it needs to be if we’re to remain within the 1.5°C warming threshold. To avoid the worst impacts of climate change, the world will need to develop 5-16 gigatonnes of annual carbon removal capacity by 2050—that’s 1 million times the current global capacity.
It’s therefore imperative to quickly enable these solutions to scale; but for the companies leading and operating these solutions, financing represents a major hurdle. Securing the up front capital required to increase production is often cost-prohibitive or even unavailable to these types of carbon removal or storage projects. The problem is that the market is too new to demonstrate commercial viability. It’s a catch 22: The voluntary carbon market lacks historical data sufficient to unlock upfront financing, yet these new project developers can only build that data as they scale, which requires upfront financing.
Patch has a solution.
Benefitting buyers and project developers alike
Patch Offtake is a multi-year carbon credit pre-purchase agreement that provides companies with a pathway to support and scale a portfolio of vital frontier climate solutions. Carbon credit project developers can translate these agreements into funding and secured revenue for multiple years, supplying them with the resources needed to expand production capacity and deliver meaningful growth in carbon removal and storage.
Leading the way on this new, forward-thinking solution, the first Offtake participants range from global management consulting firm Bain & Company to the walk it back collective, a global campaign led by Craig Cohon urging individuals to double down on carbon removal. Through Offtake, these buyers now have access through the end of the decade to a portfolio of innovative project developers that includes CarbonCure Technologies (carbon reduction and removal through mineralization in concrete), Mission Zero Technologies (direct air capture), Running Tide (multi-pathway ocean carbon removal) and Vesta (coastal carbon capture).
“Offtake enables multi-year funding with terms and buyers we would otherwise not have access to,” said Tom Green, CEO of Vesta. “Patch has taken the complexity out of forward purchase agreements, enabling us to focus our efforts on what we do best—removing carbon from the atmosphere.”
This new pre-purchase agreement streamlines the process for businesses looking to deliver outsized impact to project developers.
“Patch Offtake comes at the perfect time,” said Sam Israelit, Chief Sustainability Officer at Bain. “By addressing the needs of both project developers and carbon credit buyers, it paves the way to scale the critical solutions the whole world needs right now.”
A new type of carbon credit pre-purchase agreement
Offtake provides carbon credit buyers with a simple way to contribute to impactful carbon projects over time and enables project developers to rapidly scale their climate solutions today—not years from now. Buyers participating in Offtake benefit from:
Support for innovative solutions, no matter the size: By committing to multi-year purchases, buyers help project developers to demonstrate commercial viability sooner in order to accelerate expanded production of innovative carbon removal and storage projects. Unlike other forward purchase mechanisms, there’s no minimum investment level or volume commitment required for a buyer to participate.
A streamlined process: Leveraging Offtake means that companies get access to multi-year offtake agreements without having to negotiate or directly manage these themselves. Patch oversees the complexity and risk through standardized contracting that minimizes the time and resource-consuming negotiation process typical of traditional single-party agreements—a process that often fails to yield ideal outcomes for either party.
Secured inventory: Offtake buyers agree to purchase carbon credits through a portfolio of projects representing multiple developers and technology types. Unlike traditional carbon credit agreements, which are made between a single buyer and developer, this diversification mitigates supply and delivery risks and enables buyers to build an evolving portfolio that will maintain targeted carbon credit volumes by project type and price.
Stable pricing: Businesses secure impactful carbon removal and storage credit inventory at pre-negotiated set rates—hedging future price volatility from the start.
“Patch Offtake has been uniquely constructed to enable companies of any size and budget to take part,” explains Brennan Spellacy, CEO and Co-founder of Patch. “This means we can activate every buyer and dollar available to accelerate carbon removal and storage today.”
If you’re interested in participating in future Patch Offtake agreements as either a buyer or supported project, get in touch with us today!