Carbonmark Integrates Klima Protocol to Expand Onchain Carbon Liquidity

Carbonmark is excited to announce our latest supply-side integration with the Klima Protocol. For the past few months, we have worked closely with Klima to support Carbonmark API-based transactions on the Base blockchain, tapping into over 300,000 tonnes of carbon liquidity currently held in Klima protocol. 

Klima Protocol represents the latest iteration of thinking on how to efficiently price and build liquidity for carbon credits onchain. It’s an open source, rules-based market infrastructure for carbon markets, delivering transparency and real-time execution for carbon credit retirements.

Why Blockchain

Blockchain provides a native standardization layer for data products, representing everything from tokenized equities and commodities, to fractionalized ownership of real estate and intangible assets, like carbon credits and digital currency. 

When assets are tokenized and brought onchain they become programmable. This programmability provides novel opportunities to make assets behave and react in certain ways. For example, deterministic triggers can be used to automatically retire carbon credits when certain conditions are met, such as payments being received or emissions data being processed. 

When using blockchain, instead of relying on a centralized clearinghouse or siloed databases, the entire lifecycle of an asset is visible to all network participants. You can think of it as a transparent, mathematically enforced chain of custody. This continuous, unbroken provenance allows auditors, buyers, and regulators to trace a carbon credit back to its exact point of origination. 

By making the asset's history entirely public and verifiable, blockchains can eliminate the opaque supply chains that often lead to issues like double-counting and asymmetric outcomes in carbon markets.

Security and permanence on the blockchain are maintained through cryptographic hashing and consensus mechanisms. When a transaction occurs, it is verified by the network, bundled into a "block," and mathematically locked to the preceding block. To alter a historical transaction, a malicious actor would have to rewrite that block and every subsequent block, while simultaneously compromising the majority of the independent nodes validating the network—a computationally and economically unfeasible task (the cost to hijack the Ethereum network, the foundational layer for where we operate, is estimated to cost $45 to $48 billion). This immutability ensures that once a carbon credit is transferred or permanently retired, the action is tamper-proof, preventing fraud and establishing absolute, decentralized trust in the asset's ledger.

Furthermore, the aforementioned immutability, and the fact that the security of every transaction is equal across all participants, ensures an extremely high level of network neutrality. This, in turn, has ensured high confidence in builders leveraging public blockchain tooling to build together in an open manner.

Carbonmark, Klima Protocol, and a growing number of carbon market stakeholders, including carbon registries, believe that blockchain provides an elegant and secure foundation for building a carbon market with high integrity, interoperability, and technological integration potential. 

Why Klima Protocol

Klima Protocol represents a novel mechanism for building carbon credit liquidity onchain and provisioning it in an automated and secure fashion. Core to Klima Protocol’s operation are two main mechanisms: 

1. Klima’s Pricing Mechanism: a tool for assigning prices to groups of carbon credits (“carbon classes”) that takes into account the specific attributes of carbon credits across different projects, methodologies and registries. The Protocol  uses both supply & demand mechanics, as well as pricing signals provided by protocol stakeholders, to define prices.  

2. Klima’s Retirement Aggregator (RA): a smart contract that automatically routes payments and carbon credits for retirement, while communicating key data to a credit’s underlying carbon registry or issuance service. 

These tools allow the protocol to provision carbon credits with dynamic pricing, instant transaction settlement, and unique tooling to allow automated purchase and retirement features. Carbonmark leverages Klima’s ‘Retirement Aggregator’ product to interface with the carbon credits held by the protocol.

Carbonmark’s API

Core to our service offering is the provisioning of carbon retirements in a real-time manner with instant settlement secured by blockchain proof. As we operate on a public chain, all carbon retirements are fully auditable by third parties across their entire lifecycle (including transfers from carbon registries, trading activity, and ultimate retirement). 

Given the carbon credits we facilitate are tokenized, we are able to offer a number of unique features that are often absent from traditional API carbon credit services:

1. Instant settlement with full traceability to an underlying carbon registry (enabled using Circle’s USDC stablecoin)

2. Fractional retirements for credits (where registries support this feature) 

3. Programmatic offset triggers (e.g. based on incoming emissions data) 

4. Integration via Web2 REST API for wide compatibility with other software stacks 

5. Bespoke Web3 integrations leveraging Klima’s Retirement Aggregator tooling 

Taken together, we have a number of tools to flexibly integrate across a range of technology stacks. This flexibility affords new and unique services embedding carbon offsetting into other software applications, including fintech, e-commerce, and logistics platforms. 

Looking Ahead

Version 19 of Carbonmark’s API, enabling our integration with Klima Protocol, has now been released. Documentation is available here: Carbonmark API v19 Documentation

In the coming weeks, we expect additional updates on Klima’s side that will enable liquidity provisioning from a broader range of carbon standards and registries. Together with our partners, we are working to leverage public blockchain infrastructure as a foundational layer for carbon market transactions, helping connect disparate registries, marketplaces, and data providers in a highly transparent and traceable manner.

Interested in integrating our API into your app or product? Learn more at Carbonmark Docs. If you need additional support, or have already tested the API in sandbox mode and are ready to go live, feel free to reach out via our Contact form.

Additional information about Klima Protocol is available on the project’s documentation site: Klima Protocol Docs.