INTERVIEW: US firm targets first food waste credits by year-end
Quantum Commodity Intelligence - US developer Brightly Ventures is hoping to secure the first issuance of carbon credits from its novel avoided food waste project by the end of 2025.
The project is being certified under US-based registry Verra's VM0046 'Methodology for Reducing Food Loss and Waste', which quantifies the downstream emission reductions from activities that avoid food loss and waste by keeping food in the human supply chain.
"We're the first project developer to use this methodology," Andy Levitt, Brightly's founder and chief executive, told Quantum.
"We have to finish our validation by the end of June. We're optimistic as we're really far along with our audit firm to get all this in place. Then we move into verification, which will take place in the back half of this year," said Levitt.
"Our hope is that we'll have credits minted before the end of this year, and we're doing everything we possibly can to make that happen," he said.
Food rescue
Brightly works with over 200 food rescue organisations across the US, quantifying the methane emissions they help avoid by diverting food from landfills to food banks.
"These organisations are in the business of helping address food insecurity," said Levitt.
"But they're also dependent on government grants, which are few and far between these days, especially here in the US," he said.
"They also rely on charitable contributions and corporate contributions, so they don't have a scalable way to grow with dependable and consistent financing," he added.
Only 2% of edible surplus food in the US is rescued, with a lack of funding a consistent barrier, but generating revenue from carbon credit sales can help address this funding gap, he said.
Food rescue organisations "have all the data of all the food that they are recovering on a daily basis", and Brightly's technology platform can process that data to derive accurate measurements of the food type, and the dry matter content associated with each food type, said Levitt.
Brightly then quantifies the amount of methane that would otherwise be emitted if that food ended up in a landfill.
Volumes
The volumes of food involved are significant. "We're dealing with upwards of about 4-5 billion pounds of food [a year] that's being diverted out of a landfill," said Levitt.
"Though we need to discount that against a baseline of what was already being diverted before our project began and only claim the additionality on the delta between the baseline and what's above that on a year-by-year basis," he said.
Given a project start date of March 2020, the company is factoring in a three-year historical baseline of 36 months prior to March 2020.
"So our approach is that 2017/2018/2019 will be the three years of the baseline, and the food diverted from March 2020 and beyond is the delta," said Levitt.
"We actually break it down and apply those deltas for each food rescue organisation we support — and in auditing terms, each one is considered a 'project instance' — so if we have 20 different food rescue organisations, every one of those 20 will be its own project instance," he said.
"We measure the baseline for each of those 20, and then the delta from each of those 20 against the baseline. So it's not just a scattershot or broad-based averages, we get really hyper-specific," he added.
In terms of volumes of avoided emissions, "with our first tranche, which is multiple years, I think we're going to net out at somewhere around 750,000 tonnes of avoided methane, and then each year beyond that we'll probably be in the neighbourhood of 300,000 tonnes", said Levitt.
Avoidance
While removal credits from reduced landfill gas (LFG) emissions are well established in the market, avoidance credits from preventing food from reaching landfills in the first place are a new departure.
"Credits for avoided food loss and waste don't exist yet. Food waste credits aren't part of the solution set," said Levitt.
Quantum's assessment of US LFG credit prices currently ranges from $5.40-6.40 per tonne CO2 equivalent for vintages 2020 through 2023.
"I'm hoping to be able to maintain a premium price point for [Brightly's project credits] because they're both limited in volumes and possess unique qualities," said Levitt.
"I think that should price us out somewhere in the $20-25 per tonne range, which hopefully will only get higher as we get closer to 2030," he said.
While the issue of permanence can sometimes be problematic for avoidance credits, in Brightly's case "the permanence is triple-A level, because [the food is] either being eaten or going to landfill — it's one or the other", said Levitt.
Last month, the company announced a forward sale of an undisclosed volume of credits to US dairy products group Schreiber Foods, which made an equity investment in Brightly in 2024.
Brightly is counting on its combination of limiting methane emissions and supporting efforts to combat food insecurity, resonating with corporate buyers in the food sector and elsewhere.
"Our goal is now to create these carbon credits and tell what is hopefully a powerful story to the market about addressing not only climate change but also food insecurity," said Levitt.
"Because we give the majority of the revenue that comes from the sale of those credits back to the food rescue organisations — so they can recover more food, feed more people and keep more methane out of the atmosphere."