Business Model
EU CRCF Certification
Official Framework: EU Regulation 2024/3012 (December 2024)
Overview
The EU Carbon Removals and Carbon Farming (CRCF) framework establishes official certification for carbon removal projects across the European Union. This is the regulatory standard that corporate buyers require for carbon credit purchases.
Four Categories
- Permanent Carbon Removals: Direct air capture, mineralization
- Carbon Farming (Soil): Agricultural practices improving soil carbon
- Carbon Farming (Forests): Afforestation, forest management
- Carbon Storage in Products: Long-term storage in materials ← Our Category
Our Certification Path
Category 4: Carbon Storage in Products
Why Hempcrete Qualifies:
- Permanent building material (50+ year lifespan)
- Carbon stored in building structure
- Measurable carbon content
- Verifiable construction process
- Meets EU durability standards
Certification Timeline:
Step 1: Application (2-3 months)
- Prepare documentation
- Submit to certification body
- Initial review and feedback
Step 2: Verification (3-6 months)
- On-site inspection
- Carbon calculations review
- Monitoring plan approval
- Final certification decision
Step 3: Ongoing Monitoring (Annual)
- Annual monitoring reports
- Periodic re-verification
- Registry updates
- Compliance maintenance
Total to first certification: 6-11 months
Certification Costs:
- Initial certification: €8,500-21,500 (application fees + verification + documentation)
- Annual monitoring: €2,000-5,000 (reports + annual verification)
- 5-year total: €16,500-46,500
Why This Matters:
- Required for corporate sales: Corporate buyers need CRCF-certified credits
- Official EU certification: Not optional - becoming the standard
- Premium pricing: €45-60/tonne vs €30-40 uncertified (50% premium)
- Competitive advantage: Early certification = market leadership
- Regulatory compliance: Meets EU sustainability reporting requirements
Current Status:
- ✅ Framework research complete
- ✅ Category 4 qualification confirmed
- ✅ Certification bodies identified (TÜV SÜD, Bureau Veritas, SGS, DNV)
- ⏳ Cost quotes requested
- ⏳ Application preparation (Q1 2026)
Primary Business: Corporate Carbon Sales
This is our ongoing business (not a fundraising campaign).
Demand-First Approach
The Economic Challenge
Hemp is an incredible crop with validated potential (EU production +84% from 2015-2022). However, traditional hemp farming faces a fundamental economic challenge:
Traditional Model: Grow hemp → Find buyers → Sell at market price → Hope for profit
The Challenge: Farmers must sell hemp to make money, creating dependency on volatile market prices. High land costs require high returns, making profitability uncertain without guaranteed buyers.
Our Solution: Low Break-Even Point
Carbon credits pay for cultivation → Hemp becomes semi-free raw material → Low break-even point = profit even if hemp has zero market value
Key Insight (from An): We get paid to grow hemp that we get to keep. Traditional farmers must sell hemp to make money. We don't need hemp buyers because carbon credits cover our costs.
How It Works:
- Pre-Sold Carbon Credits: Buyers commit BEFORE hemp is grown
- Multiple Exit Strategies: Build cottages, sell hemp products, or store for future use
- Zero Market Risk: Not dependent on commodity prices or finding buyers
How It Works
How Demand-First Works
Buyers commit first, eliminating market risk for hemp growers
Corporate Buyer
Pre-commits €30-45/tonne
Corporation commits to purchase carbon credits before hemp is grown
Ricardian Contract
Legally binding agreement
Smart contract combines legal terms with blockchain execution
Hemp Cultivation
Risk-free growth
Community grows hemp with guaranteed buyer and payment
Traditional Hemp Model
Secret Trees Demand-First
- CCT tokens delivered to buyer
Revenue Streams (Ongoing Business)
Multiple revenue streams ensure business sustainability:
Primary Revenue (Continuous)
- Carbon Credits: €560-840 per hectare per year (sold to corporations)
- Hemp Products: €500-1,000 per hectare per year (textiles, bioplastics, construction)
- Eco-Tourism: €9-25K per cottage per year (rental income)
- Total: €10-27K per hectare (competitive with agriculture)
Platform Revenue (Continuous)
- Transaction Fees: 0.5% on marketplace trades
- Verification Fees: €50-200 per assessment (paid by buyers)
- Subscription Fees: €10-75/month from individual and business subscribers
- Crowdfunding Fees: 1-2% of community fundraising
Key Point: Secret Trees keeps 100% of revenue. No profit sharing with subscribers or investors (legally safe business model).
Hemp Products (Multiple Uses)
The Problem Solved: "What if you end up burning hemp because you have no secondary uses?"
Our Solution: Hemp biomass has 6+ commercial applications
Hempcrete Construction (€4.3B market)
- Building material for cottages and structures
- Carbon-negative alternative to concrete
- Primary use for Secret Trees Gardens
Hemp Textiles (€4.7B market)
- Clothing, fabrics, rope
- Stronger than cotton, less water
Hemp Bioplastics (€8.4B market)
- Biodegradable plastics
- Automotive parts, packaging
Hemp Bioenergy (€2.8B market)
- Biomass pellets for heating
- Renewable energy source
Hemp Nutraceuticals (€9.7B market)
- CBD products, supplements
- Health and wellness market
Hemp Insulation (€1.2B market)
- Building insulation material
- Fire-resistant, mold-resistant
Total Addressable Market: €31B+ across 6 categories
Result: Zero waste. Every part of hemp plant has commercial value. Constant revenue stream even if carbon credit market fluctuates.
B2B Corporate Carbon Credits
Target Market: Corporations seeking tax write-offs and CSR credits
Offer: Pre-purchase carbon credits at below-market rates
- Price: €30-45/tonne (25-50% below €60 market rate)
- Delivery: 12-36 months via Ricardian Contract
- Tax Benefit: Immediate write-off (30-50% savings)
- Verification: Blockchain + IoT sensors
What Corporations Get:
- Documentation for CSR Reports - Working towards EU CRCF certification (Q3-Q4 2026)
- Blockchain Verification - Transparent, tamper-proof tracking
- Real-Time Dashboard - Monitor CO₂ sequestration progress
- No Ongoing Commitments - One-time purchase, no equity/tokens
- Professional Certificate - Upon EU CRCF certification completion
Why Corporations Buy:
- ✅ Tax Write-Off: Deduct full amount in year of purchase (30-50% savings)
- ✅ Below-Market Pricing: €30-45 vs €60/tonne (25-50% discount)
- ✅ CSR Compliance: Meet sustainability targets and reporting requirements
- ✅ Blockchain Verified: Transparent, auditable carbon credits
Example ROI for Corporation:
- Purchase: €1,750 (50 tonnes @ €35/tonne)
- Tax Savings: €525 (30% corporate tax rate)
- Net Cost: €1,225
- Effective Discount: 30% + 42% below market = 72% total savings
Full business model documentation coming soon.
Optional: VC Scaling
If we want to grow faster (not required for business operations).
What VCs Fund
- Accelerated cottage construction (2-3 cottages vs 1)
- Platform team hired earlier
- 5-10 communities onboarded faster
- Marketing and sales acceleration
Why It's Optional
- Business operates without VCs: Bootstrap with €130K self-funded
- Self-funding after Year 2: Eco-tourism + carbon revenue covers growth
- Your choice, your timing: Not a "phase" or requirement
- Maintains control: Can grow organically with revenue
When to Consider VCs
- After proving model with Secret Trees Gardens
- If you want faster growth trajectory
- When you're ready to scale platform
- Your decision based on goals
Key Point: VCs are optional scaling partners, not a required next step. The business operates sustainably with or without VC funding.
Business Sustainability
Why This Model Works:
- Multiple Revenue Streams: Not dependent on single income source
- EU CRCF Certified: Official certification = corporate buyer confidence
- Demand-First: Buyers commit before hemp is grown (zero market risk)
- Competitive Pricing: €10-27K/hectare competitive with agriculture
- Self-Funding: Revenue covers growth after Year 2
This is an ongoing business, not a fundraising campaign. Corporate carbon sales provide continuous revenue. VCs are optional if you want to accelerate growth.
For detailed financial projections, see Financial Projections. For funding options, see Funding Options.