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Interview With Magnus Drewelies, Founder Of Carbon-Credit Procurement Platform Ceezer

When did you found Ceezer, and what’s the story behind it? What was your initial inspiration?

I founded CEEZER in October 2021, the idea, however, goes way back. I got to know the voluntary market in 2015 on a field trip to Madagascar. Working with a mangrove project there, I experienced real scientific rigor that didn’t match what I knew about carbon offsets. There was drive behind what people were doing and I was astonished by the amount of data that was collected before credits could even be issued. It really didn’t correspond to what was usually visible on the corporate end of things.

Magnus Drewelies

Magnus Drewelies

Back then, companies bought credits like commodities, if they bought them at all. The classical way was to spend some arbitrary marketing budget to post pictures on their websites.  Some larger players bought at the cheapest possible price to use them as means to reduce the burden of compliance schemes (that was still possible in the EU to some extent). Mostly, because the market was incredibly opaque and dispersed, the quality of credits was hardly visible, and few seemed to care. This was clearly detrimental to the more ambitious, high-quality efforts to reduce carbon.

I felt that with tighter regulations and hopefully clearer climate ambitions in the future (which have since arrived to some extent), corporate players would need to incorporate GHG emissions into their activities with the same rigor and rationality with which companies look at any other investment topic. Ideally, looking for credits with the securest or highest-impact climate effect, based on reliable data and quality indicators, reflected in prices.

That is what CEEZER essentially brings to the voluntary carbon market: A data-driven way to purchase the right credits at the right price directly from the source. I worked on decarbonization in previous jobs from the corporate side. And knowing the market already, that kind of solution was really what I was missing as a buyer.

Today this is even more critical. Understanding what a credit is issued for is more complex because the range of project types and certifiable technologies kept growing since then. Now, there is real removal available that comes with a completely different kind of impact, but also at a completely different price point. Companies need to understand why to pay $700 for a ton of negative emissions (and why it might be worth it) and how to deal with the constraint removal supply we still see for the years to come. While not every company can invest in more expensive technologies right now, there are opportunities to build balanced portfolios that make removal more accessible while maximizing climate impact. And this is what CEEZER can solve.

If you could go back to the founding, is there anything you’d do differently today, and any suggestions to other carbon tech founders?

Overall, I think speed is of the essence. We try to keep a sometimes dizzying pace at CEEZER, and I am happy we started that way. The market is extremely dynamic and sometimes it feels like we are building the plane while flying it. Many fundamental mechanisms for the carbon markets are simply not built or decided. Preparing for the next COP you realize that there is a myriad of things that still need to be solved on a policy level — where there is no clear plan yet. Not exactly how you want to think about something so existential if you ask me. However, as the market is undergoing so many changes at the same time (both driven by new and evolving regulation but also because there is now real capital involved), we probably overthought some developments that were emerging or seemed to be emerging in the early days. In hindsight, I think I would have a stronger trust in the fundamental truths of almost any market: Conflict of interest doesn’t pay off in the long run, maturing markets lead to specialization across the value chain as no one player will be amazing at everything, and being the first is not always the best. We are still early and haven’t figured everything out but we do see that our conviction to build a non-conflicted solution is paying off with the right players on both sides of the market. So if I were to give advice to other carbon founders it would probably sound trivial: Ignore the noise and look into what actually delivers value and has shown to deliver value in less dynamic markets. Then you probably look at a model that can be attractive no matter where the market is going.

Could you explain the Ceezer service to our readers, and how it’s different from other carbon credit companies?

CEEZER is a two-sided marketplace that connects project originators of negative emissions with corporate buyers. Everything is guided by proprietary, in-depth data (on the credits but also on buyers and sellers). To allow for direct trade, we put everything that is in the way of efficient interactions out of the sellers’ and buyers’ headspace. Sellers can rely on us for contracting, get support in the best pricing and track their inventory across transactions. Buyers get full transparency across the market (and the ability to browse and compare almost all existing verified projects), get insights into the key quality and risk indicators, and can purchase without needing to register across different standards and certifiers. We can manage all of the transactions automatically, meaning buyers can focus on the best impact for the best price without any operational concerns in the way. CEEZER is different because it enables mature, data-driven portfolio decisions from the whole breadth of the market at scalable volumes, from classical avoidance credits to technical removal. We take the complexity of the market and make it actionable and manageable by curating the right information for all players. This allows for better, more efficient transactions and for more focus on impact rather than cost alone. Also, we engage closely with all sides of the market, meaning we build solutions for both sellers and buyers in close collaboration. We are convinced that partnerships and strong ecosystems are needed to solve the climate challenge that is ahead of us.

In terms of companies buying Carbon Credits through Ceezer, are you seeing companies spending more on higher quality because of the transparency and UX you provide?

We currently observe an average removal share of 20% across portfolios managed on CEEZER. This is significantly higher as compared to the numbers we see in the general market. The average cost per credit is above the 50 $/t range, significantly higher than the market average. Some credits are traded at over $450 per ton. The reasons why this happens on CEEZER are threefold: 1) we make transparent why certain credits are more expensive which helps customers secure budgets within their organizations by being able to compare credits based on the long-term climate effect (for example, buyers can compare 100-year-prices where we calculate a normalized price to secure the climate effect for 100 years) and 2) we make removal credits accessible to buyers that usually wouldn’t be able to buy them due to budget or volume constraints because we can aggregate smaller demand for removals to generate significant overall offtake without any one buyers needing to commit all the budget and 3) we make buyers look at their credits like a balanced, long-term portfolio. By allowing buyers to build mixed portfolios seamlessly with the metrics to explain the effect of an additional dollar spent, they are on average more willing to invest in more expensive technologies as part of the mix. At the same time, we enable them to manage overall spend in a conscious way for multiple years.

Where do you hope CEEZER is in 3 years and in 5 years?

We have been around for less than a year. Clearly, we have pretty straightforward milestones concerning market coverage, the number of customers on both sides, and tons of CO2 removed over the platform. For example, we track closely the removal share of all portfolios on CEEZER (we currently try to get to 30% on average including larger corporations). In three years’ time, we want CEEZER to be a fundamental part of the global carbon infrastructure. We are lucky to partner with large organizations already and enable them to manage their portfolios years in advance. In 2027, we hope to have increased the average removal share significantly.  To do this, we work closely with developers and new removal projects to help them scale more quickly and get “invoice financing” in place even before they are running at an industrial scale. In five years’ time, I hope we can see the results in the overall available removal volume and the share of removal that is being bought. To do so, we already have a few collaborations in place, including some that bring more complex and long-term transaction types on our platform.

What would you aspire to do personally, if you weren’t the CEO of Ceezer?

I really enjoy working with corporations and took a very conscious decision to work on the business side of things after graduating from university. However, looking at the data problems we face within the VCM and wider climate space, I can’t ignore the fact that so much basic research is yet to be done (and much hasn’t even started). In some cases, we (as in, the global community) cannot be sure that the pathways we are working towards are the best ones. We don’t have much time left to invest in the less efficient or slower technologies. In more areas than I would hope we have hypotheses rather than proof for what will be effective.

Hence, if I couldn’t work on CEEZER right now, I would probably try to work in academia and contribute to progress on that side. I have always enjoyed scientific work and we already do some of the research we need at CEEZER internally (I keep joking I want to get my PhD while building CEEZER). However, I think the role of a scientist allows for a very different and important perspective that a startup environment doesn’t necessarily foster. So that might be interesting to do.

Speaking of costs, what room does Ceezer have to reduce costs and what does this depend on? How important are certificate sales compared to other potential end product sales in this calculation?

Already, we decrease the overall cost for many credits by making hidden fees and arbitrage obsolete. This effect is highest for traditional offsets where we found that arbitrage can still be in the 300% range. In the removal space, where sales currently work more often via direct offtake agreements and higher prices generally allow for less margin, we work closely with developers to drive prices down. First, we help project developers easily plan and budget for future vintages and get demand points. By mixing more expensive vintages into balanced portfolios, we can increase funding at the early stages of development to help scale and drive down costs. Also, we explore how to use future price developments to improve economics already today.

When it comes to certificate sales we do see them as a strong driver for early demand signals that ultimately help cost down removal technologies. There is also an increasing interest to couple carbon revenue with actual product revenue from removal products. An example we see quite a lot is biochar application in the agricultural sector. Similarly, carbon capture within cement and concrete processes allows both avoidance and removal as part of a commercial process. Down the line, CCUS (carbon capture, utilization, and storage) seems to be an important pathway for heavy emitters like the concrete and steel industry that also profits from their own reduction efforts.

From a European point of view, there is a limit to this model, as most sectors are bound to decarbonize by regulation, rendering any commercialization in the form of credits futile and non-additional. In the US, however, this can be a great complement to driving climate action on a corporate level. Also, both approaches are often used together. We hear from many industrial customers that they buy credits to compensate for residual production emissions and then sell their products as “carbon neutral”. While we do not support the label per se – we expect that this will continue to be a driver.

What are the most overlooked opportunities in cleantech and climate, in your opinion?

There are many things to work on. Some areas which are gaining a lot more momentum at the moment, such as improving the MRV solutions for GHG removal and reduction projects are certainly exciting. I personally also think some natural removal pathways have not received enough attention. Similarly, there is also technology around reducing or removing non-carbon GHGs like nitrous oxides or methane that seems to receive less attention.

Very practically, we are looking for better solutions to reliably measure adjacent effects like biodiversity at scale. With a growing market for carbon, these related topics will require the same rigor and data to ensure we do the right thing.

Similarly, I am closely tracking what is happening in plastics. Both in the production sector (can plastics capture carbon, can we use PLA and other degradable polymers to start bringing the ubiquitous pollution to an end), as well as in the environmental market developments to solve the existing pollution (VERRA already launched a plastics credit that we are piloting with some suppliers). There are ample opportunities to engage in that sector and no reason to delay the work that needs to be done.

Ultimately, I hope that some of the lessons we learned from GHG emissions so far (how to get companies to track their impact, how to incentivize mitigation via a private market, and how to integrate this into the global effort to reach a sustainable pathway) will accelerate solving some of these other challenges as well.

If you could enact some policy, what would it be?

I have been a bit frustrated with the slow progress of implementing the more complex parts of the Paris agreement. It feels like everyone would benefit from more clarity on accounting, double counting, and corresponding adjustments. If possible, I’d solve that first.

What person or organization provides you with motivation, that you’d like to share with our readers?

I love climbing. One athlete that motivated or rather inspired me is Alex Honnold. Although I would NEVER climb El Capitan without a rope, I deeply respect that he is someone that continues to push the boundaries of the sport beyond anything that was imaginable maybe 20 years ago. What I find inspiring is that he seems to be driven by an internal desire rather than a need for external recognition. Getting great things done probably requires exactly that — a real internal drive. Funnily enough, I recently learned he is doing some climate work with his foundation as well.

 
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Written By

I'm investing in positive companies and am passionate about climate action and long-term human challenges. Early partner at BEAM (United People of Climate Action) and CleanTechnica (#1 cleantech-focused new & analysis website in the world), among others.

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