How Land Restoration Gets Infrastructure Projects Approved

What We Need to Grow, Episode 083: The Social Licence to Build. A Founder Talk conversation with Martin Beaudoin-Nadeau. Cleaned for readability; the words are the speakers' own.

A Conversation with Martin Beaudoin-Nadeau, Founder and CEO of Viridis Terra

Caleb Pedosiuk: All right, Martin, very good to have you here. Viridis Terra is your company, and you are working in the Amazon, in West Africa. You are really globally around the world. You've got Amazon involved in some of what you're doing.

And at a basic level, because for some of this, if you don't mind, I'm looking at this from a basic level to help me understand it. You are helping in an era of human history where there is this drive, this impetus to go and build. And quite often to go build, whether it's data centers, whether it's housing, whether it's commercial, people are going in and they're building and they're clearing land. And as a result of that, if you don't have part of the equation attentive to our ecosystem, what can happen is it can become uncoupled from caring for the environment, caring for creation, and instead just barreling down a road of technology and industry.

So I know that's maybe a really simple way to look at it for my sake, but could you please help us to understand the fundamental building blocks of what you guys are doing, what your company does, and then maybe bring it to some of the cool projects you're working on right now?

Martin Beaudoin-Nadeau: Thank you very much for having me. So yes, I'm Martin, the founder and CEO of Viridis Terra. We started the company a little bit more than 10 years ago. Our goal was to bring new technology and solutions to restore degraded land. So we were going after the global problem of land degradation.

There has been more than 50% of the land has been degraded in the last centuries. And it has caused a lot of problems to humanity, because we use a lot of natural resources. Everything we build, we create, we use is made of natural resources. But in the past, we were just extracting these natural resources without thinking about what's going to happen after.

And at the same time, as the population is growing, we are building more buildings, we need more roads, we need more trains, transportation, we need more energy, we need to mine more natural minerals. So every time we build new buildings or we open a new mine or a new road, we degrade nature. And we emit carbon. So all these projects have an impact on the climate and also on nature.

And at the same time, a lot of these new projects, you can see right now with data centers, a lot of these projects have a hard time to get built because of the local communities. They don't want anything to do with it. So don't build in my backyard. You see that everywhere in Canada, US, Europe, everywhere in the world. And the problem is most of these projects, they don't benefit much the communities.

And that's how at Viridis Terra we wanted to bring a solution for all these projects. For example, if you build a new data center, how can we deliver for you quality hectares restored, so we create new nature somewhere else. So that will offset the impact that you had for building your data center on water, on nature, on carbon also. At the same time, I'm creating value to the local community.

We have developed biotechnologies that can increase up to two times the productivity of the land. So we are already able to recreate forests, agricultural fields, healthy agricultural fields more quickly on degraded land than it was before. But also we have a platform that allows us to manage and automate all the operations in the field: from where we should be working, signing contracts with the landowner, doing the site preparation, restoration, reforestation activities in the field, and ensuring sustainable management of the new nature, as a new forest or agroforest, over the long term.

So that's what we have been doing at Viridis Terra. If we take a concrete example, the new project we could be involved in is the new Alto train project between Toronto and Quebec. I don't know if you heard about it, but that project will go through over 1,000 different landowners.

Caleb: Yep.

Martin: And at the same time, it will affect over 8,000 hectares of land. So these lands are right now producing food, or urban areas where there are trees or parks, or buildings, or there are forests that sequester carbon and play a very important part for climate.

And at the same time, you see that a lot of these farmers in Quebec, Ontario, they don't want anything to do with the project, because they see it will go through their land, so they're going to lose land. At the same time, they don't benefit from it, because they will have to drive an hour or two to be able to take that train, because there's only maybe six, eight, ten different points where people can take the train with the high-speed train that we're going to have.

So if you start integrating a natural infrastructure project, we think that project, you could restore and conserve over 8,000 hectares of land. Recreate what has been affected in the past, working with these landowners. So you could be working with 1,000, 1,500 different landowners. Sign long-term agreements with them. It brings them benefits where you invest on their land to move from traditional agriculture to regenerative agroforestry, or improve a forest that's been degraded somewhere else, or give payment for ecosystem services to conserve existing forests so that we will conserve it over a long period of time.

So these are how we are able to bring this impact to these local communities that will increase the social acceptability of this project. And that's one of the biggest challenges that they have in many of these projects right now. It's to obtain and maintain the social license.

And that's where we're bringing these restoration activities, natural infrastructure activities. We are able to bring a solution to these social acceptability challenges. But at the same time, they have other challenges, because climate and nature risks are increasing right now, and the board of directors and the management team of many companies, they have risk. If they don't manage it, they could get a lawsuit from some people. So that's another risk where, by creating this project, you are able to reduce that risk for the companies, for the board, for the management team. And ensure they have bigger positive impact on all levels with the great infrastructure projects they're all developing.

Another one is, usually when you build this infrastructure, you have limited additional cash available to do another type of outside project, like a natural infrastructure project where you would restore 8,000 hectares. For us, when we bring this project, our goal is to also bring financing for the project. So that project developer for the new infrastructure, the train or the data center or the mine, they don't have to pay to invest in the natural infrastructure project. They only have to commit an annual royalty to be paid to the natural infrastructure project, so that we are able to bring the investor, create the natural asset, and have the impact we are looking for.

Caleb: What has the response been like? Is this something that you feel the private sector is voluntarily responding well to? They're cooperating, some of these developers of these major projects, if it's critical minerals or there are mineral rights that companies are going after. Are some of these big companies saying, hey, look, we love this, we're approaching you or wanting to include some version of this in our proposed plans? Or is it more top-down, that government is needing to, or attempting to, step in and create laws that govern the private sector?

Martin: If you look at the current market right now, a lot of large corporations, they have net-zero, nature-positive objectives. Net zero by 2040, by 2050, or nature positive by 2030 or 2040. So right now many companies are calling us telling us, we have this objective, but we don't know what to do with it. How can we bring a solution to be able to reach these objectives? So that's where with these companies we create a project for them, we propose them a project, that will help them reach these net-zero, nature-positive objectives.

So that's one thing. They are usually large corporations. They have a vision over like 20, 30 years. They're already thinking about their customer. They want them to do more for the climate and the nature. So they are already moving voluntarily on this side.

But on the other hand, you have already many laws that are coming in. For example, in Europe you have the deforestation-free product regulation. That is starting in December, like in one month from now. Commodities coming into Europe will have to be deforestation-free. So that means if you bring coffee, if you bring palm oil or any commodities, timber, into the European Union, you need to show that it's deforestation-free. So the only way that these companies are able to have access to the commodity they need, for food, for building houses or whatever, is that they need a supply that comes from projects like the projects that we develop. That create nature, that restore degraded land so it produces these new commodities on the market.

So that's an example, but Europe also has the restoration law. If you work directly on the continent, all the new private sector projects need to follow the new restoration law, where the goal is that by 2030, at least 20% of the land is going to be under restoration. And when you reach 2050, it's about 80 to 90% of the land that needs to be under restoration.

In Canada, for example, you have the carbon neutrality law that came in for 2050. So if we come back to the Alto project between Quebec and Toronto, that project is funded by the government. The government has a carbon neutrality 2050 law in place, so that project needs to follow that law to ensure that when it reaches 2050, it will be net zero.

Same thing, the Canadian government has a Nature Plan 2030 following the Kunming-Montreal Agreement that came in in 2022 to protect biodiversity. So because this project is a government project, they have no choice but to follow these international agreements that they have pledged and the law they have put in nationally to succeed to reach their objective.

So that's where for us, usually the clients that we are going after are mostly the ones that have challenges with social acceptability, and the ones that already have to follow these new rules that have been put in place in the last two to five years, starting to be functional right now. For example, that 2030 Nature Plan is coming in very soon in Canada.

Caleb: When you add these additional regulations, like even with the EU saying that any wood that's coming in is not coming from deforested areas, or if it is, it's being offset, I'm assuming from carbon credits or some version of whatever the terminology would be that would say, look, it is, but we've reforested in other areas.

If two competitors are competing, trying to go to market, or if two products are being produced and one has a higher cost for it and the other has a lower cost and has an option to, well, maybe they won't go to Europe, but they will go elsewhere and then create demand. Maybe I'm stating an obvious question, but especially if there's an economic downturn, if there's a period of time where stimulating an economy, this would probably be a time where I think a lot of governments are looking at quantitative easing to try to boost the economy, to try to get things moving. If a lot of businesses' margins are already eaten into because of rising fuel costs, inflation, when quantitative easing happens, the devaluing of a currency, less buying power for the dollar, it just makes me wonder if one of the challenges is where there's theory of where something would work and where there's practical traction of how it would work. It seems to me maybe that's one of the challenges that could be with some of the policy of seeing these things move forward.

Martin: Yeah, well, if you look at the example with Europe with the deforestation-free regulation, to do this project you need about a premium of 10% on the commodity, on pricing. They already pay 20 to 30% for some certification, a premium on some certification that they get. And usually the 10% is on the minimum price, because the price moves.

And for example, the cocoa right now, the pricing is very high. So at 10% of the minimum price, it's almost nothing compared to the high price that you have on cocoa right now. So the impact is not that big for them. It's not a problem on the commodity side to pay a small premium to be able to bring the product into the market.

And so that's not the biggest challenge. The biggest challenge is to finance this project. Because, for example, if I sign an offtake agreement with these big companies in Europe that are ready to buy the product, and they pledge to pay a small premium to make this project attractive, after that, I have to go get investors. But if I'm working in Colombia, in Peru, or Brazil developing this agroforestry project, working with small and medium-sized landowners, many of them are near poverty. So you can imagine that some investors see that as a big risk.

We don't buy land. We sign long, 40 years, 30 to 40 years contracts with the landowner, and we share the benefits that are generated on the land. So so far for us, the challenge has been more about financing. Not about finding a buyer, but more about financing the project.

And we had some traction from 2022 to 2024 with large corporations that were investing directly in projects, but the market has changed and now they are more working towards long-term offtake agreements. So they are ready to pay a good price to have these commodities and products. But once you have the offtake, you need to find the investor. And now, because the large corporations don't invest anymore, we need to work with banks, financial institutions, funds, and usually they are looking for high returns, low risk.

And because we are considered higher risk, because we sign long-term contracts with landowners who are near poverty and they are at different risk, and it's a new emerging market, it's like renewable energy like 25 years ago. That's where we are at right now with nature-based solutions and natural capital. So for us, it's more on this side, and we are working to find ways to bring insurance, guarantee into the product to reduce the risk for the investor and the lender. So that's what we have been working on, on blended finance and innovative ways to finance the asset, to create the asset upfront so we are able to deliver the end product and the impact we are looking for.

Caleb: Is there an aspect of this that is the idea of double or triple prizes, where you have multiple wins through one solution? Is there a way where, for example, let's say that there's land that could become a regenerative land producing food that contributes to a local food system. Are there ways for someone with, say, 100 acres to say, hey, I have these 30 acres and it would do really well to have an orchard here. Is there a way for them to sort of submit that application and then, through some platform or something, have a corporation that's looking to offset their carbon or offset their impact be able to approve individually, almost at the micro or grassroots layer, to be like, hey, our company has funded these 35 farms across Ontario. And these farms are maybe people that are wanting to get into farming, but the high overhead cost is out of reach, but you could put orchards or other regenerative aspects of agriculture that could also become sources of income.

Martin: Yeah. Just an example: let's say we sign a contract with an infrastructure project developer. And then we need to mobilize, let's say, 300 hectares. Then after that, we could go in the landscape where that project is going and start a call of interest for all landowners. Can be foresters, can be farmers. Can be urban areas too.

And then we receive applications from people that have interest to do a project. Let's say one farmer says, I'm doing traditional agriculture right now using a lot of chemical inputs and my chemical inputs are increasing a lot in the last few years. Because that's what we see often, is that more chemicals are used, your soil fertility is going down, and then you need to use more and more and more, and the cost is increasing.

But usually this farmer, they don't have the capital to move from traditional to regenerative, because you have three to five years that your revenue goes down until it comes back up at the level it was, and then you use a lot less input, so you make more money. So for us we could go and sign a contract with the farmers to do the transition from traditional agriculture to regenerative agroforestry, and then they will receive all the support during that five years to do the transition. So that when they get five, six years after, they make as much or even more money than they were before, and they have a healthier ecosystem.

So that's an example of a win-win for everyone. On this side, you have that infrastructure project developer that needs to offset his loss of biodiversity and carbon emission. On the other side, you have some landowners that would like to invest to improve productivity, to improve fertility of the ecosystem, the opportunities of revenues, but they don't have the capital to invest. So we bring them together and then we get the impact we are looking for.

And the advantage is that you're also increasing the resilience of the landscape at the same time. Because if you are working with 30 different landowners in a community, and then you're creating this natural asset, the landscape becomes more resilient against extreme climatic conditions. And then it's a benefit for the infrastructure, the company that has built the train or the data center, because it protects more its infrastructure and the water source. For example, the data center needs a lot of water. We are able to protect the water source more by building this natural asset. And on the other side, you have more resilient agricultural field that the farmer can continue to manage. And when you get a drought or you get a big storm, he loses less of his crop because the ecosystem is healthier. So that's an example of a win-win situation.

Caleb: Yeah, I think there's a group, I think there's an Instagram handle called Carbon Cowboys. I think they're down in the States, but it's a group of, from what I understand, regenerative farmers. And I remember seeing this one thing where they were demonstrating some of the native grasses, reintroducing native grasses in some of the plains and some of the farmland in the States.

And they showed this one area that was very prone to drought. So you would see cash crop farmed areas that are just complete drought, and you would see right up to the line of their property that is just lush, almost waist-high natural grasses. And they would say in the morning they would walk out and up their pant legs, up past their boots, their pants are just soaked from the dew in the morning. And across there, it's parched, cracked, dried land. And they're finding whether bison or cattle, livestock that are able to thrive in that environment by introducing some of these grasses that have root structure. I think there was one demo they did where they dug down to show how deep the root structure went with some of these grasses.

But really interesting, because exactly like you said, there's a cost involved in actually going in and transferring it over to a regenerative approach.

Very cool. Well, let me ask you one last question I'd like to ask guests, which is, what is it that you feel like you need most to grow right now? Sometimes people are looking, they're raising money, some are launching a new project, new service, they're trying to get word out about things. Some are looking at expanding and need team. What is it that you would say that you need most to grow right now?

Martin: Well, I think if people, customers start to ask more products that are net zero, nature positive, I think it will help more companies to move towards these net-zero, nature-positive objectives. And so we can build more of these projects and have higher impact all around the world, in Canada, in the Amazon, in South America, in West Africa, everywhere.

So I think that's the most important thing: people need to remember that what we consume can be produced sustainably or not sustainably, and we need to make sure as much as possible that we produce it sustainably, to ensure that these resources will continue to be produced in the future. First of all, because many places used to produce goods and services and they don't do it anymore. And the World Economic Forum said there is a loss of over $10 trillion per year to the economy, because all of these lands, we're talking about almost 2 billion hectares of land around the world that don't produce anymore. That used to produce goods and services for our economy.

So if we can mobilize more people to put pressure on their suppliers, that will help a lot to move these projects forward more quickly.

Caleb: Consumer demand. Well, Martin, thank you so much for sharing more about what you're working on. And then just the website, viridisterra.com. Great. Thank you so much.

Martin: Thank you. Thank you for having me.