Month: February 2024

[Webinar Recording] Biochar: Exploring This New Carbon Removal Technology

Recorded May 2nd, 2024

A special lunch & learn where we explored the essentials of biochar, a cutting-edge carbon removal technology that is quickly gaining attention across the industry.

What you’ll learn:

  • The Science of Biochar: Understand how biochar is produced and how it functions as a carbon removal tool.
  • Environmental Benefits: Explore how biochar contributes to ecological health and helps combat climate change.
  • Broader Co-Benefits: Learn about the additional advantages of biochar, including soil enhancement and waste reduction.

This session is designed for those new to the concept of carbon removals as well as seasoned professionals looking to deepen their understanding of how biochar fits into the broader context of sustainable development.

Your Hosts:
Wyatt Catron – Project Development Manager, 3Degrees
Serene Kuramarohit – Carbon Associate, 3Degrees

Watch the webinar


A Beginner’s Guide to Carbon Insetting: Fostering Sustainability in Your Supply Chain

What is carbon insetting and how does insetting work?

Companies are diligently working to reduce their direct emissions and energy purchases—known as scope 1 and scope 2 emissions—to meet corporate sustainability targets. However, the majority of emissions for most organizations stem from indirect sources within their extensive value chains, categorized as scope 3 emissions. Carbon insetting emerges as a strategic solution to mitigate these indirect emissions, offering a path to more comprehensive sustainability initiatives.

Carbon insetting allows organizations to finance emissions reduction projects directly within their value chains, offering greater control over their scope 3 emissions. This approach is especially beneficial for companies with significant agricultural supply chains, where there are large opportunities for emissions reductions.



In this guide to carbon insetting, we’ll take a closer look at:

  • What is carbon insetting?
  • Carbon insetting vs. carbon offsetting
  • How does carbon insetting work?

What is carbon insetting?

Carbon insetting empowers companies to actively reduce their scope 3 emissions by funding emissions reduction initiatives directly within their value chain. Essentially, this means companies aren’t merely waiting for suppliers to take action; instead, they’re directly facilitating emission reductions by financing projects that enable their suppliers to avoid, reduce, or sequester greenhouse gas (GHG) emissions.

For instance, a yogurt brand operating on renewable energy might achieve net-zero scope 1 and 2 emissions. However, the brand’s scope 3 emissions stem from dairy farmers—its suppliers—whose agricultural practices produce GHG emissions. Simply changing suppliers won’t address these emissions effectively, as certain value chain emissions are deeply ingrained and can’t be mitigated without altering business practices.

However, the yogurt brand could finance a carbon insetting project to lower emissions from its dairy suppliers, like adopting advanced manure management technologies to curb methane emissions. Carbon insetting offers a practical way to reduce suppliers’ carbon footprints effectively.

Though still emerging, carbon insetting holds particular promise for sectors like food, beverage, and apparel, where supply chain emissions significantly outweigh direct emissions. However, any company can adopt carbon insetting if it identifies opportunities to reduce GHG emissions within its value chain. For instance, technology firms without agricultural supply chains can still contribute by funding their suppliers’ switch to renewable energy, thereby reducing overall value chain emissions.

Carbon insetting vs. offsetting

Carbon insetting differs from offsetting, although both involve financing quantified and verified emissions reductions or removals. The critical difference lies in their implementation: insetting happens within a company’s value chain while offsetting occurs outside.

Consider a US-based snack food company opting for carbon offsets. It might procure carbon credits representing a ton of emissions reduced or removed globally, perhaps by funding reforestation in the Brazilian rainforest. Once the selected credits have been rigorously quantified under a peer-reviewed methodology and certified by a major carbon credit registry, the company might announce its purchase and retirement of the credits, but must do so separately from its reported scope 1, 2, and 3 emissions. Claiming any part of its operations or value chain as ‘carbon neutral’ or ‘offset’ poses a reputational risk, as equating purchased credits’ impact with the company’s emissions may draw scrutiny.

In contrast, carbon insetting involves financing projects that directly reduce scope 3 emissions within the company’s value chain. For instance, a company could financially support its farmers in adopting sustainable practices like cover cropping to enhance soil carbon sequestration. This direct investment not only reduces the emissions linked to sourced ingredients but also directly lowers the company’s reported scope 3 emissions. 

In both cases, voluntary corporate investment in emission reductions or removals is positive for the planet and would come with co-benefits for people and nature. However, only insetting allows a company to credibly claim reductions within its value chain and avoid the temptation to use misleading claims such as “carbon neutral.”

How does carbon insetting work?

Carbon insetting works by an organization directly funding emissions reduction projects that others within that company’s value chain implement. 

To get started in carbon insetting:

  1. Ensure a foundation for effective claims and program impact through an analysis of your scope 3 reporting and data collection capabilities.
  2. Develop an action plan that will guide your insetting process. This includes decision making around the quantification approach, risk management, supplier involvement, and budgeting requirements.
  3. Select projects within your supply chain for investment based on your criteria with the help of 3Degrees.
  4. Implement rigorous reporting and verification processes to ensure interventions are credible and defensible.
  5. Claim the GHG and non-GHG benefits following your objectives.

Sometimes measurement and verification take the form of quantifying impact by generating credits (the same way the voluntary carbon market quantifies impact), though these credits are retained for insetting purposes rather than sold outside the supply chain.  Alternatively, insetting might rely on precise emissions measurements without a formal credit registration process. In both scenarios, safeguards should be in place to defend claims and prevent double-counting of emissions benefits.

3Degrees has a long history of helping brands understand their value chain emissions and create clear carbon roadmaps for both short- and long-term climate goals. Our full-service project development capabilities, including quantifying the benefits of a wide range of technologies in line with widely recognized methodologies, enable us to work with you to create custom carbon credit projects, including insetting interventions, that reduce project risk and deliver results in line with your goals.

If you’re interested in exploring how insetting can advance your scope 3 emissions reduction goals, we invite you to contact us. Let’s discuss how we can support your sustainability journey.



Want some quick information about carbon insetting? Take a look at these FAQs:

What are the benefits of carbon insetting?
Carbon insetting not only targets the reduction of scope 3 emissions within the value chain but also fosters environmental and social enhancements. Benefits extend to improved financial stability for agricultural workers and communities, enhanced biodiversity, better air quality, and healthier soil conditions, contributing to a more sustainable ecosystem.

What is an example of carbon insetting?
Insetting can be implemented wherever emission reduction opportunities exist within a company’s value chain. A notable example is the adoption of regenerative agricultural practices, such as agroforestry, which combines trees and crops to boost carbon sequestration and can also enhance farm productivity. 3Degrees is pioneering insetting initiatives, including innovative projects like vermifiltration systems that use worms to process cow manure, significantly reducing GHG emissions.

What types of companies are doing carbon insetting?
Companies across various sectors with significant value chain emissions are exploring insetting. Early adopters typically include those in industries where supply chain emissions dominate, such as the food and beverage sector and the apparel industry. These companies are leveraging insetting to address their environmental footprint proactively.

Maximizing your earnings: Navigating the Canadian Clean Fuel Regulation as a credit creator [Updated]

Last updated: 2/15/2024

As organizations and government entities edge closer to their net-zero goal timelines, the urgency for immediate action to reduce greenhouse gas emissions (GHG) intensifies. One key measure that is becoming more popular is the implementation of state and national Clean Fuel Standard (CFS) programs. By design, these initiatives intend to reduce the carbon intensity (CI) of the fuel pools in a given market, while offering financial incentives to companies that take action to reduce their transportation-related emissions.

These programs have been implemented in British Columbia, California, Oregon, and Washington, and Canada has now joined with its own program, in effect since July 2023.  

With the transportation industry surpassing the power sector as the largest emitter of GHG emissions in the United States, the rapid launch of new CFS programs across North America is a critical response.

What are the Canadian Clean Fuel Regulations (CFR)?

The Canadian Clean Fuel Regulations (CFR) are now in full effect, regulating fuel suppliers as of July 1, 2023. The CFR represents one part of Canada’s nationwide effort to reduce GHG emissions to combat climate change. Like other CFS programs, the regulations aim to reduce the life cycle CI of transportation fuels and promote cleaner fuel alternatives.

The regulations have set CI standards for gasoline and diesel, mandating that fuel producers and importers progressively reduce the CI of their fuels to meet specified annual thresholds.  The Canadian CFR aims to reduce the average carbon intensity of gasoline and diesel consumed in Canada by 15% (below 2016 baseline levels) by 2030 and is projected to prevent 26 million tonnes of GHG emissions.

Suppliers unable to hit the outlined annual thresholds will generate deficits and must procure compliance credits from other regulated organizations or voluntary participants who generate credits by supplying low-carbon fuels or utilizing lower-carbon alternatives, such as electricity or hydrogen. Revenue earned from the sale of compliance credits by certain voluntary participants must be used to fund further decarbonization activities, such as deploying electric vehicle (EV) charging infrastructure, installing electricity distribution infrastructure that supports EV charging, or providing financial incentives for consumers to purchase EVs. The CFR program is designed to funnel funds to entities responsible for expanding Canada’s low-carbon fuel market, fostering growth in this sector. This cycle of incentive and reinvestment aims to rapidly expand the clean fuel industry for businesses and consumers alike.

Who are eligible credit creators under the Canadian CFR? 

Parties who undertake credit generation activities are referred to as Registered Creators. Registered Creators can generate credits under three unique compliance categories. First, fossil fuel producers can earn credits for projects that reduce emissions from the fuel production process. Second, credits can be generated by producers or importers of low-CI fuels like ethanol and biodiesel. Third, and perhaps the most enticing to the vast majority, credits can be generated by those supplying low-CI fuels directly to vehicles, encouraging the adoption of technologies like EVs and hydrogen fuel cell vehicles.

There are three main groupings for Registered Creators under this third compliance category: 1) electric vehicle (EV) charging network operators, for public or residential metered EV charging; 2) charging site hosts, who operate privately held commercial charging; and 3) clean alternative fueling stations, such as hydrogen.

Registered Creators, once approved, are actively generating credits annually, contributing to the program’s goals. These credits are later sold on the open market for purchase by deficit generators who have an annual compliance target. To earn credits, organizations must demonstrate that their clean fuel projects meet the eligibility criteria set out in the regulations, comply with reporting requirements, and may be subject to verification by an independent third party.

By promoting and incentivizing low-carbon technology, the Canadian CFR looks to create permanent jobs in clean technology, promote the expansion of EVs, and grow Canada’s clean fuel industry.

How can 3Degrees help?

3Degrees works with fleet operators, EV charging infrastructure providers, and alternative fueling suppliers to quantify and monetize their transportation-related emissions reductions. Our unique three-phase process ensures that your organization maximizes the financial benefit of your current assets while providing a foundation for future growth.

  • Phase 1: Planning and Opportunity Assessment

3Degrees will work hand in hand with your team to identify all eligible activities under the Canadian CFR, appraise credit value, and manage the application and approval process.

  • Phase 2: Quality Assurance and Data Oversight

Following approval, 3Degrees ensures all data and reporting adhere to the requirements and deadlines, maintaining compliance and integrity.

  • Phase 3: Credit Monetization and Risk Management

We will then look to mitigate any market risks your organization may face by arranging custom offtake arrangements.

How to get started

If your organization is interested in taking advantage of the new Canadian CFR as a credit generator, now is a great time to consider beginning the process.

We understand that the process to get started as a credit creator can be daunting, which is why we offer complimentary evaluations to help navigate any confusion and determine what opportunities are available to you as well as what that financial reward may look like. If you are ready to get started or for more information, please contact us here.


Read FAQs about the Canadian CFR here

Understanding the importance of the double materiality assessment (DMA)

Under the Corporate Sustainability Reporting Directive (CSRD), about 12,000 EU companies are obligated to disclose non-financial information relating to their 2024 performance. This will increase over the next few years towards 50,000 companies both within and outside of the EU. The CSRD establishes the European Sustainability Reporting Standards (ESRS), which cover a wide range of ESG topics, and naturally, some will be more relevant to an organisation, its stakeholders and investors than others. 

To accomplish the first step of compliance and focus their efforts, companies must determine the scope of their disclosures by performing a double materiality assessment (DMA). The DMA is an essential, required component of the CSRD designed to intentionally direct companies to go beyond their financial performance and internal operations, and understand the greater impacts, risks and opportunities (IROs) of society and the environment on the company, and vice versa.

The CSRD differs from other sustainability regulations in its approach to materiality. The ESRS consists of 10 topical standards, containing over 80 potential disclosures and many hundreds of data points, therefore it is essential for an organisation to perform a DMA to know where to focus their collection and inquiry. CSRD requires a more comprehensive approach to materiality assessment than what is currently common practice, and companies will need to extend, evolve and strengthen their existing processes. This is a key first step in any company’s preparations for CSRD disclosure. 

To set your organisation up for success, we will walk you through best practices for the DMA and stakeholder engagement required for robust CSRD compliance.  

What is new in the double materiality assessment? 

Companies often have some experience in measuring and reporting aspects of their “impact materiality” –  the effect of the company on society and the environment in which it operates –  which may determine ESG priorities such as health and safety goals and greenhouse gas emissions reductions. However, CSRD and the ESRS require a more in-depth evaluation, including:

  • Broader coverage of ESG topics, including potentially unfamiliar topics such as biodiversity and ecosystems
  • Consideration of “financial materiality”  –  how these topics do (or may in the future) financially impact its business (note that together, impact materiality and financial materiality make up double materiality)
  • Consideration of the full value chain, from raw materials to end use and disposal
  • Consideration of both positive and negative, current and potential IROs.

When it comes to the DMA, impact materiality will often be an organisation’s starting point, followed by analysis of financially material topics. Examples of impact materiality are pollution, or the use of hazardous materials, and an example of financial materiality is disruption to the supply chain due to increased droughts or flooding.

When a company undergoes a DMA, they explore interdependencies within the business model and value chain to reveal areas of opportunity. There might be an opportunity to develop resilience to predicted adverse effects or take advantage of evolving their business activity / model. The DMA approach promotes broader awareness, as each company is urged to look at itself within a wider context, one where it isn’t only the subject impacting society and environment but an object that is being impacted as well. 

Performing the DMA allows the users of the disclosures – investors, lenders, insurances, and customers – to provide decision-useful information to the board and relevant teams within the company. 

Key steps for an effective DMA 

Conducting a successful DMA requires a targeted, robust data collection and management system. Complex and wide reaching, the DMA will require significant planning and organisation. We suggest creating a designated cross-department team (including representation from sustainability, risk, and finance) responsible for this task.

  1. When performing a DMA, it is imperative to define boundaries and key terms, such as time horizons. The team should map out the business operations and value chain in as much detail as possible. For best results, it is critical to set out clear definitions and outline the scope under which the DMA is carried out. Once this foundation has been established, it’s time to identify potential material topics and IROs. 
  2. By creating a preliminary list of topics, impacts, risks and opportunities that might be material to the organisation, a targeted stakeholder engagement program can be designed. First, an organisation should explore the relevance of each of the ESRS topics on its business operations and value chain. Using existing science, reports, previous materiality assessments, desktop research, light touch internal conversations, and standards, the team can identify potential material IROs for further investigation.
  3. Stakeholder engagement takes many forms, and there are a lot of tools and sources at a company’s disposal. The optimal approach should aim to strike a balance between collecting meaningful insights and limiting administrative burden for all parties. However, it is worth noting that this phase is likely to change over time as the company’s process matures and the disclosures evolve. Engaging relevant stakeholders to gather the necessary insights on potentially material matters is an extensive process, and a hugely important step in the overall assessment. We will expand more on this in the following section. 
  4. Once stakeholder feedback and insights have been collected it is time to score the IROs and apply carefully developed materiality thresholds to determine what is material. This filtration process allows the team to confirm material IROs, as well as confirm the material sustainability topics and which details to disclose on. 
  5. The last key step is to engage senior leadership to obtain sign off on the material sustainability matters and share the outcome of the DMA as appropriate.

Focus on stakeholder engagement

When beginning to engage stakeholders, a team should map out who should be consulted and identify the preliminary work that needs to be done prior to engagement. The ESRS recognises two key categories of stakeholders: those that are (or will be) impacted — such as customers, suppliers, and local communities — and users of the sustainability statements, such as investors and industry groups. The ESRS also recognises the existence of stakeholders who cannot voice their concerns, one example being the natural world.

The process of stakeholder engagement first involves the identification of stakeholders with the right insight and the assignment of applicable topics to each stakeholder. The choice of stakeholders selected will depend on the company’s unique context, its business activity, the structure of its value chain, and the preliminary list of potential material topics. 

Tailoring engagement questions and styles to particular stakeholders will yield the most valuable responses. It’s useful to consider the intended level of contribution that can be expected from each stakeholder ahead of the consultation, and to design the engagement accordingly, for example using written questionnaires, interviews, and workshops.

Questions should be tailored to be relevant to each stakeholder and should take into account:

  • How they are impacted by a particular topic or IRO 
  • If they are in a position to provide insight on a particular topic or IRO 
  • What is their position in the value chain

Next, the team should extend an invitation to stakeholders to participate in the DMA. The way this is carried out is crucial, and incentivising stakeholder participation can help ensure success. The final step in the stakeholder engagement process is to review the responses and apply learnings. Stakeholder feedback is a valuable resource that can be used to validate the identified list of potentially material topics and inform the scoring and materiality assessment of identified impacts. It also can inform the list of potentially material risks and opportunities relating to resource use and business relationships. Stakeholder responses may raise additional questions, and in some cases, it may be appropriate to follow up for more information.

Potential challenges 

An organisation’s path to effective DMA is challenging, but thoughtful planning, a carefully selected approach, and well-tailored stakeholder engagement go a long way. The DMA allows companies to identify impacts of their organisation as well as impacts on the organisation, while keeping a balance between comprehensive reporting and administrative burden. The DMA lays the foundation for the entire CSRD, and can improve how businesses strategise and make operational decisions. An effective DMA can also benefit companies’ risk management strategy, competitive advantage, and business resilience.

Generally a new concept, the DMA reporting approach is still in its nascence, with limited guidance published on how to apply the concept in practice. Companies are responsible for creating their own materiality thresholds, and there are no clear limits or boundaries to the materiality assessment – it can extend up and down the value chain indefinitely. Even CSRD recognises that there isn’t a one size fits all approach, so companies need to think hard about the ESRS requirements, as well as their unique business activities and value chain. The right DMA approach is what will determine success.   

Working with an advisor to generate strategies for effective DMA under the CSRD can ensure compliance and that the organisation is getting the most out of the process. 3Degrees can support companies in undergoing the DMA, or guiding them to perform their own. For details on meeting CSRD compliance or additional DMA guidance, please get in touch today.