Spain's Iberdrola sets up nature-based carbon credits business

Spanish energy company Iberdrola has ventured into the voluntary carbon market by launching Carbon2Nature (C2N), a new company focused on nature-based solutions, it said Aug. 14.

C2N will offer high-quality carbon credits through in-house or collaborative projects that improve biodiversity, nature conservation and restoration.

The initiative aims to capture more than 61 million mtCO2e by promoting projects that conserve and restore ecosystems across over 100,000 hectares, including forests, coastal ecosystems and agricultural soils, the statement said.

The company will focus on countries where Iberdrola is active. 80% of C2N's projects will be based in Latin American countries such as Brazil, Mexico, Colombia, Peru and Chile while countries the remaining 20% will be in the northern hemisphere, such as Spain, the United Kingdom and Portugal.

Carbon2Nature is already working on the development of projects in Brazil, Mexico, Colombia, Chile and Spain.

"We come to this new market with humility and a desire to do things differently, bringing all of Iberdrola's experience in sustainability to the world of nature-based solutions and the generation of carbon credits," said Miguel Ángel García Tamargo, director of Carbon2Nature.

Iberdrola, which is focuses on electric utilities and renewables, is aiming to reach net zero emissions by 2040.

Growing scrutiny

This comes as many countries and companies are investing in nature, forests, woodlands etc. to shore up climate finance and generate carbon offsets.

Nature-based solutions that help remove carbon dioxide from the atmosphere and halt emissions from degraded natural sites and agricultural land have gained popularity in recent years.

Voluntary carbon markets are currently facing questions about credibility. The efficacy of some carbon credits, especially nature-based offsets, have recently come under fire from media and academics questioning whether the programs represent genuine carbon reductions.

This scrutiny has had a major impact on prices of and demand for nature-based carbon offsets.

Platts, part of S&P Global Commodity Insights, assesses a wide range of high-quality voluntary carbon credits that fund projects that demonstrate additionality, permanence, exclusive claim and co-benefits.

The Platts CNC assessment -- which reflects the most competitive nature-based carbon credit prices -- reached $2.60/mtCO2e on Aug. 11, up from a record low of $1/mtCO2e on May 29. Platts CNC averaged $9.55/mtC02e in 2022, S&P Global data showed.