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Frequently Asked Questions about Klima Infinity

Cover image for the Klima Infinity FAQ article

The on-chain carbon market is a venue where tokenized carbon credits are supplied by real-world carbon projects, and are consumed by organizations and individuals looking to fulfil their climate-positive pledges. The on-chain carbon market is powered by Web3 technologies, and offers users the opportunity to receive greater accessibility and transparency for carbon credits than ever before.

Klima Infinity is a carbon offsetting toolkit that gives organizations access to this new market and enables them to retire tokenized carbon credits, and verifiably claim that they have offset a certain tonnage. The dynamics of this two-sided process are illustrated below:

The path of a carbon credit through the KlimaDAO ecosystem.

If you represent an organization looking to offset Greenhouse Gas (GHG) emissions, start with section “1. Organizations looking to use Klima Infinity”. If your organization is a project looking to benefit from selling carbon credits that you have generated, scroll down to section “2. Organizations looking to supply carbon credits to the market”.

1. Organizations looking to use Klima Infinity

I want to make a climate-positive pledge – how do I do that?

The process takes just three steps:

  1. Calculate your Scope 1/2/3 emissions (read more).

  2. a. Work to reduce your carbon emissions year-on-year in areas where this is feasible and cost-effective. b. Commit to monitoring and regularly reporting these emissions as part of your corporate publications.

  3. It is likely your organization cannot reduce all of its emissions to ‘zero’. In this case, your organization can commit to offsetting the residual emissions that are unavoidable.

I want to calculate my GHG/carbon dioxide emissions - how do I do that?

There are a number of calculators available (both free and paid) depending on your needs. The Klima Infinity team is available to help you calculate your emissions, or recommend the best-suited calculators – reach out here.

Do I need a simple or complex emissions calculation?

Individuals: A simple footprint calculator will work just fine – these are mostly available for free.

Companies: If you are a company that is not required to perform carbon accounting, or set SBTs (Science Based Targets), you may want to use a simple calculator to determine your emissions. The Klima Infinity team is ready to help you – reach out here.

If you have committed to Net Zero, have SBTs, and need a complex decarbonization solution to determine your Scope 1/2/3 emissions, get in touch with us.

What is a carbon offset?

A carbon offset unit represents the removal of one tonne of carbon dioxide equivalent (tCO2e) from the atmosphere, or the avoidance of one tonne of emissions.

What does CO2e—“carbon dioxide equivalent”—mean?

"Carbon dioxide equivalent" refers to the summation of multiple greenhouse gases based on the Global Warming Potential (GWP) of each gas. GWP was developed to allow comparisons of the global warming impacts of different gases. Specifically, it measures how much heat a gas in the atmosphere absorbs. The more heat absorbed, the more the gas contributes to the warming of our climate. For instance, methane has a GWP about 28 times that of CO2. Thus, one tonne of methane is equivalent to 28 tonnes of carbon dioxide, in terms of its GWP.

How does offsetting help in the fight against climate change?

Carbon credits are a high-integrity mechanism that allow carbon finance to flow from those who pollute, to projects across the globe that help to mitigate or remove carbon from the atmosphere. They are a valuable tool to cover hard-to-abate emissions that may be costly or technically challenging to eliminate today.

When you purchase a carbon credit, Klima Infinity enables you to retire this carbon credit, permanently removing it from circulation. This retirement is the point at which you can claim the benefit of the carbon offset.

Purchased offsets lead to measurable and accountable emissions reductions elsewhere in the economy, and can be used to ‘offset’ an unavoidable carbon footprint. The trade and retirement of carbon credits enables a market mechanism to emerge that puts a price on carbon.

What is carbon pricing?

One of the most powerful economic levers we have in the fight against climate change is pricing carbon. In an indirect way, the Voluntary Carbon Market helps price-in the negative externalities of emitting greenhouse gases into the atmosphere. As more actors decide to do this, the funding for carbon projects will increase steadily, and eventually reach a point where economic and social costs are accurately accounted for by the price of offsets – ultimately this makes it more viable for carbon projects to be developed and fulfil their role in helping us meet carbon budgets. This is the fundamental role of the infrastructure that KlimaDAO is building.

Can I choose the kind of credit I use for offsetting?

Absolutely – KlimaDAO has built tooling that aggregates a variety of credit types. You can also choose the specific project you want to offset. This is called selective retirement, and it comes with extra cost in terms of the percentage fee you pay (fees vary depending on the steward of the carbon pool token, e.g. Toucan, C3, etc).

You can view available projects on the KlimaDAO Tokenized Carbon Dashboard.

How do I retire credits from a specific project?

During the tokenization process (for more on this, read the “Supply-side FAQs” section below), the credits from each project receive a specific contract address (beginning with 0x…). This unique identifier enables anyone to permissionlessly retire the credits of that particular project via the KlimaDAO carbon offset aggregator.

The steps are as follows:

  1. Click ‘advanced’ underneath your selected carbon offset token to retire (e.g. BCT, UBO, NBO)

  2. Paste in the contract addresses for the specific project you wish to support, and the total number of credits you would like to retire

    1. Note, the contract address for individual projects can be found here:

  3. Enter your organization’s name for the entity the retirement will be credited to

  4. Insert your ‘retirement message’

  5. Click ‘Retire Carbon’

Can renewable energy projects be used for carbon offsetting?

In short, yes. Renewable energy sources generate little to no carbon as they produce energy from natural resources that don’t run out or use fossil fuels, like solar or wind energy. Carbon offsetting involves investing in projects that prevent or reduce emissions being released, including but not limited to renewable energy installations. Note that the two biggest carbon credit issuing standards – Verra and Gold Standard – only accept renewable projects in certain Least Developed Countries (LDCs).

Are credits from renewable energy projects ‘additional’?

A key consideration for what can or cannot be considered as carbon credit is whether it is ‘additional’. Additionality speaks to the concept that funding acquired by the carbon project via carbon offsetting must lead to the commercial viability of the project, and that without it the project would not be able to go ahead. If the funding is not ‘additional’, and the project could commence in any case, carbon credits should not be issued by the project.

Given that renewable energy installations are now commercially viable and competitive with new fossil fuel operations in many countries – often supported through state policy interventions, renewable projects can only be considered viable in countries with some of the least mature energy systems. Carbon credits from the leading carbon registries diligently consider the concept of additionality; considering whether the carbon standard which has certified a renewable energy project can be trusted is a great way to understand if the carbon offset is appropriate for use.

What happens with the revenues generated by the sale of carbon credits, and how does KlimaDAO help with this process?

Project developers cover their investment and operational costs by selling carbon credits. A portion of the revenues generated remains with the developers as profit. Entrepreneurs are thus incentivized to set up emission reduction projects that are not business-as-usual, and therefore enable climate action. The majority of emission reduction projects are located in developing countries or in economies in transition.

KlimaDAO provides tooling that makes it easy for organizations to access high quality carbon credits. KlimaDAO also provides liquidity to enable the consumption of large volumes of credits at low transaction costs and fast speeds. In this way, KlimaDAO’s transparent marketplace aims to scale up this revenue generation process for project developers. KlimaDAO’s aim is for more projects to earn more profits, spurring the flywheel of coordinated climate action.

What are carbon markets?

The objective of carbon markets is to reduce greenhouse gas (GHG, or “carbon”) emissions cost-effectively by setting limits on emissions and enabling the trading of emission units, which are financial instruments representing emission reductions. Trading enables entities that can reduce emissions at lower cost to be paid to do so by higher-cost emitters, thus lowering the economic cost of reducing emissions.

Is Carbon Offsetting just greenwashing?

To be certified, emission reduction projects must demonstrate that they are not business-as-usual. This is referred to as environmental integrity or additionality. This means that, without the additional revenues generated from selling carbon credits, these projects would not have been implemented. Supporting a certified emission reduction project ensures real benefits and maximum impact. Only additional projects are recognized and can issue carbon credits. This mechanism, which is rooted in the Kyoto Protocol, has firmly established itself and has proven its worth over the past 20 years as a central component of voluntary, non-state regulated climate protection.

What are examples of carbon offsetting projects?

1. Nature-based carbon sequestration. Biological sequestration absorbs CO2 emissions through the growth of vegetation and the continued storage of some of the carbon in plant tissues and organic materials derived from plant tissues (e.g. stored in the soil). An example project is the restoration of degraded mangrove landscapes in Myanmar. Other examples include biochar (long term carbon storage from biological sources), and afforestation initiatives (e.g. tree planting on degraded landscapes).

2. Renewable energy. Renewable Energy projects include hydro, wind, and photovoltaic solar power, solar hot water and biomass power and heat production. Many renewable energy projects have high up-front capital costs, although they may offer high rates of return, and their operating costs are often minimal once built. Carbon offsets help support these projects by providing an additional revenue stream to offset their high up-front capital costs. This wind energy power project in India is an example and helps reduce 53,000 tonnes of carbon dioxide equivalent a year by replacing polluting fossil fuel power plants.

3. Methane capture. Methane’s global warming potential is about 28 times greater than that of CO2, and thus preventing methane emissions can have significant environmental benefits. Methane is emitted by landfills, during wastewater treatment, in natural gas and petroleum systems, from agricultural activities (livestock and rice cultivation), and during coal mining. Methane is basically ‘natural gas’ and can therefore be captured and used as a source of energy. Such projects include those that capture and purify methane in wastewater treatment plants or landfills and use it for electricity production or the production of another form of energy. The West Star North Dairy project in California, USA is an example project that captures methane from a dairy farm and uses it for energy.

I have offset my NFT collection with KlimaDAO – when will the NFT partnership be announced?

Once you have filled out the collaboration request, and submitted your marketing collateral, our team will process and announce your project with a 5-working day turnaround. For more details on how KlimaDAO can help your NFT project, read our Climate Positive NFT Guide.

2. Organizations looking to supply carbon credits to the market

Can I tokenize any commodity with KlimaDAO?

No – at the moment KlimaDAO only accepts tokenized voluntary carbon credits issued by leading registries like Verra or Gold Standard.

Can KlimaDAO fund my carbon project?

KlimaDAO does not currently (directly) fund carbon projects. KlimaDAO helps with organizing a marketplace where the already-issued credits can be easily and transparently sold. For the moment KlimaDAO only accepts carbon pool tokens that have been created by carbon bridges like Toucan, C3 or Moss.

Get in touch with KlimaDAO to receive guidance on funding and registration under the major standards.

Can KlimaDAO offtake my credits in the future?

KlimaDAO does not currently do offtaking for carbon credits. We may do so in the near future.

I have Verra/Gold Standard issued credits. How can I sell these to KlimaDAO?

If your project has been registered with, and received credits from, one of the standards that are supported by KlimaDAO’s carbon bridges (i.e. standards such as Verra and Gold Standard), it is easy to tokenize the credits. The process works as below:

  1. Select one of the carbon bridges, such as C3 or Toucan. These bridges are permissionless, which means that – provided that you meet bridging criteria – you can execute the tokenization process independently.

  2. Follow the respective bridge’s process. Once complete, you will receive carbon pool credits as a result of the tokenization. Credits from REDD+ projects would result in either NBO tokens (C3) or NCT tokens (Toucan). Most other credits would result in UBO tokens (C3) or BCT tokens (Toucan).

  3. a. You can opt to sell these tokenized credits on decentralized exchanges (DEXs) such as Sushi. KlimaDAO has seeded liquidity pools on DEXs, ensuring that tokenized carbon credit pricing is real-time and fully transparent.b. Alternatively, you can convert these tokenized carbon credits to KLIMA either by selling them directly on DEXs, or by bonding them into the KlimaDAO treasury.

Currently, carbon registries are developing a framework for tokenizing offsets, and have indicated that they would not like existing offsets to be tokenized using past mechanisms relying on offset 'retirement'. KlimaDAO and our partners are working closely with various registries to develop best practices for offset tokenization in the future.

I have credits issued under a standard other than Verra/Gold Standard. Can I still tokenize them?

The carbon bridges that KlimaDAO works with have specific gating criteria. Toucan’s bridge accepts only Verra-issued credits. C3’s bridge accepts Verra, Gold Standard, and has support for other standards, such as ACR and CAR. The bridges may broaden their gating criteria over time – we recommend getting in touch with the bridges directly for the latest developments.

Disclaimer: The information provided in this blog post pertaining to KlimaDAO (“KlimaDAO”), its crypto-assets, business assets, strategy, and operations, is for general informational purposes only and is not a formal offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction and its content is not prescribed by securities laws. Information contained in this blog post should not be relied upon as advice to buy or sell or hold such securities or as an offer to sell such securities. This blog post does not take into account nor does it provide any tax, legal or investment advice or opinion regarding the specific investment objectives or financial situation of any person. KlimaDAO and its agents, advisors, directors, officers, employees and shareholders make no representation or warranties, expressed or implied, as to the accuracy of such information and KlimaDAO expressly disclaims any and all liability that may be based on such information or errors or omissions thereof. KlimaDAO reserves the right to amend or replace the information contained herein, in part or entirely, at any time, and undertakes no obligation to provide the recipient with access to the amended information or to notify the recipient thereof. The information contained in this blog post supersedes any prior blog post or conversation concerning the same, similar or related information. Any information, representations or statements not contained herein shall not be relied upon for any purpose. Neither KlimaDAO nor any of its representatives shall have any liability whatsoever, under contract, tort, trust or otherwise, to you or any person resulting from the use of the information in this blog post by you or any of your representatives or for omissions from the information in this blog post. Additionally, KlimaDAO undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed in this blog post.


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