Carbon Tokens and ReFi: Taxation in the Blockchain Green Economy

Regenerative finance (ReFi) applies blockchain technology to environmental issues: tokenization of carbon credits, biodiversity, water, and other natural assets. For Spanish investors participating in these markets, taxation follows rules similar to other digital assets, with some specific nuances.

What Are Tokenized Carbon Credits?

Traditional carbon credits (VCUs: Verified Carbon Units) are certificates for reducing CO2 emissions. Toucan Protocol, Flowcarbon, and Regen Network "tokenize" them:

• You deposit VCUs into the protocol → you receive BCT (Base Carbon Tonne) or NCT (Nature Carbon Tonne) tokens.
• These tokens represent one ton of CO2 offset.
• They can be bought, sold, or retired ("retired" = burning the token to "use" the credit).

Key Projects

Toucan Protocol / C3

• BCT: basic carbon token (credits from various methodologies).
• NCT: credits from nature-based projects (reforestation, etc.).
• Operates mainly on Polygon.

KlimaDAO

• KLIMA: token backed by BCT.
• The protocol buys BCT and issues KLIMA with a backing of 1 BCT per KLIMA.
• Goal: increase the price of tokenized carbon to incentivize offsetting.

Flowcarbon

• GNT (Goddess Nature Token): similar to BCT but with stricter criteria.
• MOSS/MCO2 (in Brazil, one of the first to tokenize Amazonian carbon).

Regen Network

• On Cosmos, allows for the creation and monetization of ecological credit methodologies.

Taxation of Carbon Tokens

Purchase of BCT/NCT/GNT

• These are digital assets: acquisition cost = price paid in EUR.
• When sold → capital gains in savings base.

Tokenizing Own VCUs (for Carbon Project Producers)

If you have CO2 offset projects and tokenize your credits:

• You receive BCT/NCT for your VCUs → is this a barter?
• VCUs (carbon credit) → BCT (digital token).
• Position: barter → value of BCT received in EUR = transfer price of VCUs.
• If the VCUs had an acquisition cost (price paid when generating the project) → capital gains.

KLIMA: Staking and Rebase

KlimaDAO uses a rebase model (similar to OlympusDAO's (3,3)):

• You stake KLIMA → you receive sKLIMA (staked KLIMA).
• sKLIMA undergoes rebase: the number of tokens increases automatically.
• The new tokens are the protocol's inflationary "interest."

Taxation of KLIMA Rebase:

• Each rebase (increase in sKLIMA quantity) → investment income at the time of each increment.
• The EUR value of each token increment = taxable income.
• With rebases occurring 3 times a day → potentially thousands of taxable events per year.

Simplified Alternative: Declare the total KLIMA accumulated at the end of the year as investment income. This position may be defensible by analogy with accumulation funds, though it is debated.

"Retiring" Carbon Tokens

When you retire BCT from circulation to "use" the carbon credit (offset your emissions):

• The token is burned → loss of the asset.
• Taxation: The burn is a transfer of BCT at zero cost → capital loss (acquisition cost of BCT − transfer value of $0).
• Note: the environmental benefit of retiring the credit is not taxable income.

ReFi for Companies: Offsetting Carbon Footprint

Many companies purchase BCT/NCT to offset their CO2 footprint:

• The acquisition cost of the tokens → deductible business expense in corporate tax (if related to the activity).
• The token burn → the expense is already recognized; no further deduction.

The Native KLIMA Token and Its High Volatility

KLIMA experienced extremely high prices in 2021-2022 and then dropped by over 99%. For Spanish investors who bought at the peak:

• Significant capital losses.
• The loss is realized when the token is sold or burned.
• If the token is worth practically 0 but has not been sold → the loss is not yet realized.

Crystallizing Losses: Sell KLIMA at a minimal price before December 31 to deduct the loss in the current fiscal year.

Summary Table of Carbon Tokens

Updated: April 2026 | Fiscal Year: 2025