The Digest’s Top 10 Advanced Bioeconomy Markets and Predictions for 2021

January 5, 2021 |

1. Paying for AgTech Innovation via Carbon Pricing

You heard it here first. The absolutely biggest thing that ever happened in the renewables space, actually just happened and almost no one noticed it. When we highlighted it on DigestConnect, almost no one showed up. Amazing.

It’s a deal between POET and Farmer’s Business Network. The idea is simple. If a farmer produces low-carbon corn by deploying new technology, that will result in a lower carbon intensity score for the ethanol that’s produced, and a higher value in LCFS markets. POET is proposing to share back revenue to growers that they gain in California — that’s good for POET (more low carbon fuels to sell), good for growers (new revenue, and a justification for deploying advanced agtech). It’s not too bad for Farmer’s Business Network either — it is a way to show how a Silicon Valley tech company can realize its promise of becoming a bridge between growers and advanced technologies and services.

So, it’s a powerful start, but as they say in the world of Ginzu knives, wait, there’s more.

After 20 years of argument over the Renewable Fuel Standard and 10 years of squabbling and watching as Low Carbon Fuels standards deployed in the U.S. and Canada, there’s no doubt now that the California carbon market is stable enough, big enough and lucrative enough that private companies are now innovating as everyone thought they would in 2007 when the RFS was first passed. Now, everyone wants in. Not just fuels companies. Not just POET. Now, agtech has a way in through the LCFS via low-carbon fuels.

But the conversation is going to expand, and in 2021. Chemicals companies want access to carbon credits for delivering low-carbon chemicals. Materials companies, the same. Food companies, too. In short, where the conversation will start to head in 2021 is an economy-wide low-carbon scheme. Not a mandate, but a vibrant market where no one has to deploy anything, but those who deploy low-carbon solutions will find higher prices in the marketplace through trade-able carbon credits.

They say that crypto currency is the finance story of the 21st century. We disagree. We think Carbon Dollars may be the ultimate world currency — after all, they are global, fungible, and tied to real value and thereby hedged against runaway inflation. Whether that comes to pass or not, we see the POET-FBN deal as the most significant deal that has been struck in the bioeconomy, ever. It’s the beginning of a tsunami of good things.

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