Microsoft has struck a long-term agreement with Chestnut Carbon, a US-based developer of nature-based carbon projects, to restore 60,000 acres of forest over the next quarter century. The deal is part of Chestnut Carbon’s larger project to remove 100 million tons of CO2 from the atmosphere over the next 50 years.

The offtake agreement is the second-largest carbon removal contract Microsoft has ever signed, and its largest in the US.

“It’s just a really different business model construct,” says Chestnut Carbon COO Shannon Smith of what attracted the tech giant. “We’re very fortunate to be able to have the capital to buy the land, plant the forest, and say this is a minimum of 100 years that we’re committing to restore this forest.”

‘If we can’t find it, we’ll build it’

Alternative asset manager Kimmeridge, a firm best known for investing in energy management, founded Chestnut Carbon in 2022.

According to Smith, Kimmeridge was looking for carbon credits to offset its emissions and couldn’t find anything it wanted to buy. “They decided, ‘if we can’t find it, we’ll build it.'”

Chestnut Carbon was born to create these high-quality, nature-based carbon offsets through afforestation projects (e.g., planting trees or restoring native forests) that remove carbon dioxide from the environment.

To date, the company has planted more than 10 million trees across 15,000 acres, mostly in the Southeastern US, Smith tells AgFunderNews. It aims to have 500,000 acres (roughly 781 square miles) planted by 2030.

“We own land in six states. It’s all still roughly the southeast [US], but we’ve significantly expanded our footprint,” she notes, adding that Chestnut Carbon primarily works with forestry supplier ArborGen to procure the millions of trees required for the reforestation efforts.

Read the Full Article