Seattle-based carbon removal company Nori has shut down after seven years in operation and raising $17.25 million from investors. The company ran an online marketplace for buying and selling carbon credits from farmers who used sustainable practices to capture and hold carbon, thereby reducing its presence in the atmosphere. Nori had been tracking these sales using blockchain technology. CEO Matt Trudeau acknowledged the challenges in the stagnant Voluntary Carbon Market and tough funding environment as reasons for the closure, according to Nori co-founder Alexsandra Guerra.
Despite being on track to remove over 700,000 tons of carbon in 2023 and directing $6.5 million to farmers, Nori ultimately succumbed to economic pressures and market uncertainties. The company had secured a partnership with Bayer and had raised $6.25 million from investors such as M13, Toyota Ventures, Placeholder, and Cargill. The carbon removal sector has faced significant disruption and uncertainty, even as the need for carbon removal to mitigate climate change becomes more urgent. Tech giants like Microsoft and Amazon have been investing millions in carbon credits, and the carbon credit market is projected to reach $100 billion a year by 2035.
In April 2023, Nori had to lay off 37% of its employees due to tighter market conditions, leaving the company with only 17 employees. Co-founder and former CEO Paul Gambill stepped down as CEO the following month and eventually left the company in March of this year. Despite the challenges faced by Nori, Guerra expressed hope for the future of climate-tech entrepreneurs who continue to work on scaling global carbon removal. The voluntary carbon market still presents challenges, but the mission of combating climate change through carbon removal remains vital.
The closure of Nori highlights the difficulties faced in the carbon removal sector, particularly in creating accepted standards for quantifying and crediting carbon removal. This task is essential for ensuring that efforts to reduce carbon emissions are valid and impactful in addressing climate change. The need for carbon removal is widely recognized by scientists, with many agreeing that it will be crucial in preventing the most severe climate change outcomes. However, the lack of uniform standards and the fluctuating nature of the market have posed challenges for companies like Nori.
Nori’s closure comes as a blow to the carbon removal sector, which is seen as key to mitigating the effects of climate change. The company’s focus on facilitating the buying and selling of carbon credits from farmers using sustainable practices was seen as a promising approach to reducing carbon emissions. Despite Nori’s shutdown, the broader mission of combatting climate change through carbon removal remains an urgent priority. As other climate-tech entrepreneurs carry on this work, they will need to learn from the successes and failures of companies like Nori in order to effectively scale global carbon removal efforts.
The closure of Nori serves as a cautionary tale for companies operating in the carbon removal sector, highlighting the challenges of navigating a volatile market and uncertain regulatory environment. As the demand for carbon removal solutions continues to grow, it will be essential for companies in this space to adapt to changing market conditions and develop robust strategies for addressing the complexities of carbon quantification and credit standards. Despite the closure of Nori, the need for innovative solutions to combat climate change remains as pressing as ever, underscoring the importance of continued investment and collaboration in the carbon removal sector.
