Jelmer van de Mortel, Head of Acorn/Innovation Lead
Project Acorn is a new Rabobank program to enable carbon storage on a large scale for small-scale farmers in Africa, Asia and Latin America. This is being realised through a different form of agriculture that stores carbon as biomass. This storage and trading of the carbon gives farmers access to the growing marketplace of carbon emissions and allows them to develop a new income source. The platform is planned to go live at the end of October.
“Can you turn a good idea into a scalable pilot? A model that we can repeat millions of times? And can you deal with risks in a market that is still developing, or indeed, where you contribute to that development? Because those are the people we need to make project Acorn successful and that can contribute to the carbon reduction that is more than necessary in the coming years.”
Jelmer van de Mortel is completely clear about it. As the person with final responsibility at Acorn, the program for innovation of carbon storage and trading, his level of ambition is high. “Right. Our primary goal is to improve the quality of life of smallholder farmers in Africa, Latin America and Asia. A way to do this is by sustainable farming. With carbon removal units we have started this transition.”
What is Project Acorn?
Jelmer explains: “With Acorn we connect two universal values: money and carbon. We help farmers transform parts of their land into agroforestry. This means that, in addition to corn, they will also grow cashew nuts or mangoes, for example. These plants are very good at extracting carbon dioxide from the air and storing it, also known as sequestration. Indeed, the opposite of emissions. We need this urgently. Because even if we stop emitting carbon right now, not all the carbon we have produced over the past 200 years will automatically disappear. We need to store it.”
“You can add value to per carbon removal unit that is stored. And that value is tradable on the international market. For example, if an airline wants to offset their footprint. Once the trees are fully grown, they can store less carbon, but they do produce fruit. These, in turn, can be traded by the farmer. This creates an income model for the farmer during the entire life cycle of the tree. Both when the crops are sold and when the carbon is stored.”
Jelmer: “We work closely with Microsoft. We have built a platform on their technology. On that platform we register the biomass measurements. With that we can calculate the stored carbon. The data is owned by the farmer who – in the future – can hopefully make this data available to other parties for a fee. From weather index insurance to creditworthiness analyses. As far as we’re concerned, that’s a real example of cooperative working. We make knowledge and technology available, with which the farmer can set up new revenue models. At the same time, we build the relationship with the farmer and, as a bank, we can offer our services in various ways.”
“Our work in Acorn is really a game of scalability. We’re just starting out. We have a team of 20 people and are working with a few thousand farmers. By 2030, we want to work with 20 million farmers. Those are the smaller farmers in Africa, Latin America and Southeast Asia who grow on less than 10 hectares of land.”
“Rabobank’s customers in Wholesale & Rural ask us how they can make the entire supply chain more sustainable. Think importers and producers of crops and products. From cocoa to coffee, from cashews to mangoes. We offer a solution for that with project Acorn.”
Pioneers in a new market
To grow in projects like Acorn, you have to dare to think in terms of scale and relationship management. “This entire market is still under construction: you yourself are involved in growth. That means you really have to be bold in terms of scalability and stand behind your decisions. Instead of doing a project just once, we roll it out several times over different continents and with different partners. Without losing momentum.”
In such a relatively young and growing market, there are different dynamics at play that you have to be able to deal with. “That’s right. As a bank, you’re quick to approach it from the current internal processes, but that doesn’t always benefit the process. It’s pioneering. We have to build relationships and continuously look at how to move forward together.”
The relationship management is not limited to local partners. Jelmer is also looking for cooperation within the bank. “We build on the knowledge and experience of Rabo Foundation. I find it admirable what they do. They have been working with local NGOs for years and understand how smallholder farmers work. With their knowledge we can strengthen our proposition.”
Jelmer is eager to start and further expand the platform. “We are on the track in all areas. Because we trade carbon that is actually stored as biomass, it is an innovation in the field of carbon removal units. This improves the whole system of carbon emissions trading. In addition farmers have a new income model and therefore become even more interesting for us as a bank: by making carbon storage part of the transition and linking it to financial incentives. In the coming years we will demonstrate that this works.”
See how the project works in the video below: