Over years, a listed B2C e-commerce company had built the conviction that environmental and social responsibility was a core differentiator towards their customers. Hence, they had driven an ambitious sustainability agenda over multiple years.
The majority of greenhouse gas emissions directly generated by online retailing arose in the logistics processes, during the transportation from the manufacturer to the logistics centers and consequent shipping to customers. Identifying several levers to reduce its carbon footprint - including 100% recycled materials for any filling materials in the parcels and switching the energy mix to renewables - the need to manage the remaining unavoidable emissions manifested.
As for many businesses, despite strong ambitions, residual emissions remained a significant challenge in the short- to mid-term, with many reduction technologies not being in place at the right quality or reliability level (even when ignoring the often prohibitive cost associated with them). Consequently, the company had started supporting external climate projects across the globe based on monthly transaction data. With increasing scrutiny on climate action from both consumers and investors and an increasingly dynamic market, the challenge became to set up a reliable system for the long-term.
After compensating emissions with traditional credit resellers, rising carbon prices in retail and an increasing scrutiny of customers when it came to credit quality called for a step-up in their negative emissions strategy. As an e-commerce player, CO₂e costs were linked to customer order volumes. With a strong growth trajectory ahead, the need to supply a high-quality portfolio along with price predictability was crucial.
The existing portfolio consisted solely of traditional avoidance credits - these projects can have an important climate impact by avoiding emissions. However, the latest report by the Intergovernmental Panel on Climate Change (IPCC) suggested that removing historical emissions from the atmosphere were also essential. The need to report on these aspects of the portfolio suddenly became relevant both to consumers and to investors.
That said, carbon removal credits were relatively expensive and expected to be scarce. With a growing demand and a limited ability to invest in the future, it became paramount to combine volume flexibility of spot deals with supply- and price stability of long-term agreements.
That’s when they started working with CEEZER.
On the one hand, it was crucial that removal projects were certified with a renowned standard to ensure externally that the promised effect would take place. On the other, the supply of certified removal credits was low and expected to be scarce for the years to come. Therefore, the company wanted to build long-term relationships with leading project originators to secure supply on a monthly basis throughout the subsequent years.
After onboarding, CEEZER unlocked access to the global supply of removals and the possibility to filter for predetermined project metrics and requirements. With full volume and price visibility on the global supply, the team quickly narrowed down a suitable range of projects and technologies.
Using on-platform negotiations and the help of CEEZER’s portfolio team, a recurring monthly offtake agreement at a predetermined price and volume was set up on CEEZER. In addition to traditional credits that were bought on spot every month, the buyer now supported a Biochar project for the long-term, certified by the renowned removal standard Puro.Earth. Next to carbon removal and storage over centuries, the project offered numerous co-benefits, including increased soil fertility, habitat building for endangered wildlife, and job creation in the local community.
As a result, the company was able to launch their removal journey along-side existing high-volume compensation. Curbing price and supply risks from the get go enabled them to build relationships with leading suppliers early.