A drone on site at Henry Creek, Oregon. Shopify has purchased 50,000 tonnes of carbon offsets from DroneSeed, which is administering reforestation of the fire-ravaged property. (Courtesy DroneSeed)

E-commerce giant Shopify has purchased 50,000 tonnes of carbon offsets over a 100-year period from reforestation company DroneSeed.

It is Seattle-based DroneSeed’s single largest sale and will facilitate the replanting of 300 acres of forest at Henry Creek in western Oregon, using its drone technology and its subsidiary seed processor Silvaseed Company.

The sale represents 27 per cent of the project’s total available offsets. The project will be the equivalent of removing emissions from 10,874 gas-powered cars each year, the firms say.

The project site, described as a prime location for conifer trees, was burned in the August 2020 Santiam fire that ravaged Oregon’s Jefferson, Linn, Marion and Clackamas counties.

Each of DroneSeed’s drones can plant three-quarters of an acre, or 57 pounds of seed, on each flight.

The company’s reforestation is funded by its carbon offset generation and sale in partnership with Element Markets, an environmental commodities company headquartered in Houston.

DroneSeed’s partner on the Henry Creek project is EFM, a climate solutions investor that stewards approximately 100,000 acres under international non-profit Forest Stewardship Council-certified management in the western U.S. EFM has $219 million in private capital under management.

Verifying the carbon offsets

The offsets will be regulated by rules from the third-party non-profit Climate Action Reserve, a carbon offset registry created by the State of California in 2001. That means an ‘ex-ante’ protocol for reforestation or investing in the carbon stored by reseeded and replanted forests as they grow.

An FAQ page on the partnership states the offsets will “conservatively and transparently forecast how much carbon will be removed from the atmosphere as trees grow. The methodology utilizes well-established and understood tree growth rates for species and regions.”

Previously, repayment periods for reforestation projects were expected to be around 10 to 25 years. As well, past offset projects had largely been geared to mature forests.

“CAR’s new reforestation protocol is providing something new in the offset market — up-front investment for reforestation, which is a big deal for wildfire recovery. Shopify’s purchase from our first project is a phenomenal curtain raise and mic tap to announce to the many purchasers struggling to find high-quality, forward-looking carbon removal offsets like those DroneSeed offers,” said Grant Canary, CEO of DroneSeed, in a release.

The offsets will also undergo an independent verification by a third party appointed by CAR one year after the first seeds are planted. Once that happens, the offsets will be transferred to Shopify.

Currently, the drones have completed the first phase of reseeding in areas difficult for humans to access. DroneSeed will go into accessible areas in the project site and complete in-person seeding through the spring.

In September 2021, Shopify CEO Tobi Lütke was one of several investors in the $36-million Series A round of funding DroneSeed used in part to purchase Silvaseed. The acquisition of the 130-year-old SilvaSeed made it one of the largest private seed suppliers in the U.S.

“Shopify believes in the potential of reforestation to help reverse climate change, but we are also well aware of the issues around transparency, additionality, and permanence relating to forest carbon credits,” Stacy Kauk, Shopify’s head of sustainability, said in a statement on the offsets.

“DroneSeed is on a path to resolving these critical issues, which is why we’re excited to support their scale-up journey.”

Shopify’s Sustainability Fund

Shopify is involved in several other sustainability initiatives.

The Evergreen portion of its Sustainability Fund, which focuses on carbon removal, invested in nine other companies at the end of March. The investment from Shopify totalled $13.5 million.

Shopify has purchased 7,901 tonnes of offsets from the Australian company Loam, which developed a microbial seed coating that increases carbon in soils and crop yields; and 23,166 credits from Michigan’s Remora, which created a device to capture CO2 from the truck exhaust as the vehicles are being driven.

It has also formed a relationship with Twelve, which was founded at Stanford University. Shopify has purchased $2.5 million worth of Twelve’s E-Jet aviation fuel, which claims to have an over 80 per cent lower carbon footprint than traditional aviation fuel.

Other sustainability sectors in the fund include direct air capture, products, ocean, biomass and mineralization.

Since September 2019, Shopify’s total carbon removal purchase commitment from the Sustainability Fund has been $32 million. The minimum commitment is $5 million annually.