A blockchain startup founded by billionaire Adam Neumann to tokenise carbon credits has been put on hold.
The founder of WeWork and his wife Rebekah are among the founders of Flowcarbon, which raised $70 million just two months ago to build an on-chain market for carbon credits.
Neumann was ousted as CEO of co-working giant WeWork three years ago when a failed flotation highlighted serious issues of governance at the company, currently being dramatised by Apple TV.
Each carbon credit represents a metric ton of carbon dioxide removed or prevented from entering the atmosphere by a project. When bought by a corporate company, they confer the right to claim an offset when retired – forever taking it off the market.
Flowcarbon, Toucan Protocol and KlimaDAO aim to convert those credits into crypto tokens, which can then be traded on the blockchain and ‘burned’ when the company retires the credit to claim an offset.
Billions of dollars of these tokens have been traded since Toucan and KlimaDAO launched in October 2021, equating to 23m carbon credits in the six months to March 2022. However just 2% of those have been used to offset emissions to date.
There has been criticism that they obscure the true purpose of carbon credits. “If people are now buying those tokens because they see it’s a money-making machine… I think that’s potentially unhealthy,” Guy Turner, the CEO of Trove Research, told The Wall Street Journal.
Now carbon credit registry Verra – the Verified Carbon Standard – has announced that credits it has created cannot be used to create new tokens due to confusion over the process.
Flowcarbon said it was waiting for the cryptocurrency markets to ‘stabilise’ before launching its Goddess Nature Token (GNT), which was intended to go live in June.
The recent $70m funding round was led by a16z crypto and included General Catalyst, Samsung Next, Invesco Private Capital, 166 2nd, Sam and Ashley Levinson, Kevin Turen, RSE Ventures and Allegory Labs.
Other participants in the token sale include Fifth Wall, Box Group and the Celo Foundation.