A London-based sustainable power startup is looking to enable small and medium-sized enterprises (SMEs) to reduce their emissions by aggregating SME decarbonisation projects on a blockchain platform.
As the world tries to reduce its carbon footprint, large corporations can direct a part of their finances or even be able to get funding from banks and other lenders to transform their energy sources to a point of earning profit.
On the other hand, SMEs generally have a harder time attracting funding because lenders consider them a risky venture.
The trap for SMEs that supply large enterprises is that if they do not reduce their emissions, they could lose contracts on account of not meeting the green requirements of their clients.
This is where Decarb.Earth comes in. Decarb.Earth is working with SMEs to reduce their reliance on fossil fuels and carbon derived energy while still keeping them in business.
With an international team of subject matter experts and thought leaders, the company is using blockchain technology to underpin transparent, accurate and verifiable smart contracts in a mission to show the value of carbon avoidance to accelerate decarbonisation worldwide.
According to Decarb.Earth’s calculations, if all SMEs in South Africa switched to solar electricity, the country could cut up to 30% of its yearly CO2 emissions and exceed its 2030 emissions target.
For its first project, Decarb.Earth aided the Hout Bay Gallery in securing a solar PV installation and the program solves a number of problems simultaneously. Decarb.Earth’s South African founder Marco Funk says,
“Issues with stability and the price of power in South Africa are well known. In the past 15 years, the price of electricity from Eskom has shot up by more than 500% in real terms. Solar energy, in the sunshine-rich environment of this country, provides a stable and predictable source of power and the platform significantly reduces both up-front costs and running costs for the SME,”
This move allows everyone in the value chain from the customers of the SMEs to the financiers to use the verified carbon-avoidance and emissions data to highlight the role they are playing in reducing global carbon dioxide (CO2) emissions.
The further we go on the journey to a green energy future, the more organisations will compete for carbon-avoidance credentials. Because of the security and transparency features of blockchain, this solution makes the platform fully accountable.
“The lack of verifiable emissions data and all the risk in smaller businesses paying for their own renewable energy installations significantly reduces access to funding,” Funk says. “On average, these projects can achieve more than a 15% return a year in a sunny country like South Africa, which is attractive to potential funders if their concerns are dealt with.”
The project could see SMEs reach a position of being supplied with cheaper, followed by free energy with a more regular supply while matching long-term green sustainability objectives.