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Kimmeridge Launches Chestnut Carbon To Create High-Quality Nature-Based Carbon Offsets
March 18, 2022
Kimmeridge Carbon Solutions to seed Chestnut with up to $200 million
Chestnut announces concurrent strategic acquisition of Forest Carbon Works, a differentiated developer of forest carbon offsets
Forest Carbon Works focuses on ecological stewardship and unlocking access to carbon finance for small and family landowners – who collectively control nearly 300 million acres of U.S. forestry
Chestnut to embark on forest conservation and reforestation/afforestation efforts to accelerate the path to net zero
NEW YORK and DENVER, March 18, 2022 /PRNewswire/ -- Kimmeridge, a private investment firm focused on energy solutions, today announced the launch of Chestnut Carbon, LLC ("Chestnut"), a leading nature-based carbon offset platform. Chestnut will generate high-quality forest carbon offsets that are additional, verifiable, and biodiverse to accelerate the path to net zero across a range of industries. Generated credits will be verified under existing methodologies and third-party offset registries to ensure accuracy and integrity.
Ben Dell, Founder and Managing Partner of Kimmeridge, said, "As companies work towards net zero commitments and higher ESG performance standards in general, Chestnut will expand access to the carbon markets – helping to facilitate the decarbonization process. We have seen that significant GHG reductions are achievable across industries, however the harsh reality is that some emissions cannot be immediately replaced with carbon-free alternatives in a feasible or cost-effective manner. These emissions will need to be offset. While multiple technologies can achieve meaningful carbon abatement, we believe nature-based solutions sit near the low end of the carbon abatement cost curve, with the greatest potential for implementation at scale."
In furtherance of Chestnut's plan to capture the growing opportunity in nature-based offsets, the platform recently closed the acquisition of Forest Carbon Works ("FCW"), a public benefit corporation with specialized experience developing U.S. forest carbon offset projects on family-owned forestland. FCW has developed a proprietary approach that efficiently and accurately assesses carbon inventories, in turn unlocking access to carbon markets for small forest owners who are typically excluded from project development due to high costs and complex processes. As a mission-driven corporation, FCW utilizes carbon finance as a tool to support the long-term conservation of American forests and empower stewardship among the 270 million acres of family-owned forest in the U.S. FCW's entire team, including CEO and Founder Kyle Holland, will be instrumental in advancing the growth and vision of Chestnut.
Mr. Dell continued, "Kyle and the Forest Carbon Works team have built an outstanding business and we are very excited to collaboratively build a broad platform that benefits forest owners, the environment and well-intentioned corporations, alike. Combining Kimmeridge's expertise in land aggregation with FCW's experience developing forest carbon projects will quickly position Chestnut as an extremely attractive partner in the carbon offset space."
In addition to FCW's continued work of conserving intact forests, the newly combined company plans to embark on a large-scale reforestation/afforestation program in the U.S., with the goal of planting forests on 500,000 acres by 2030. This will be achieved through a mixture of landowner, state, and NGO partnerships, as well as land acquisitions.
Kyle Holland, Founder and CEO of Forest Carbon Works, said, "Our team is excited to partner with Kimmeridge to help companies reach their emissions reduction goals through our trusted nature-based offsets, while ensuring that the small forest community thrives. At FCW, we are proud to work with small landowners who have deep, generational ties to their land – empowering them with access to the revenue streams offered by the carbon market. New capital from Chestnut will accelerate the growth of our existing business operations and partnerships, while supplying the market with removal credits that we have long desired to develop. I want to thank the FCW team for all of their hard work and dedication to reach this milestone. We very much look forward to this next phase of growth."
Kimmeridge is ideally positioned to establish this platform because of its unique history as a direct operator of energy assets, with extensive experience in land management and delivering net zero energy. The Firm has long demonstrated ESG leadership in its advocacy of improved practices in the E&P sector, as evidenced by its various white papers (e.g. "Charting a Path to Net Zero Emissions for Oil & Gas Production" and "Why the Energy Industry Needs to Build its Own Carbon Offset Exchange to get to Net Zero"). Most recently, Kimmeridge played a key role in the leadership of Civitas Resources, the first carbon neutral O&G company in Colorado, of which Ben Dell is Chairman of the Board of Directors and interim CEO.
To learn more about Chestnut, please visit chestnutcarbon.com
Kirkland & Ellis LLP served as legal advisor to Kimmeridge.
Founded in 2012 by Ben Dell, Dr. Neil McMahon and Henry Makansi, Kimmeridge is an alternative asset manager focused on making direct investments in energy in the US. The Firm is differentiated by its direct investment approach, deep technical knowledge, active portfolio management and proprietary research and data gathering. For additional information on Kimmeridge and its proprietary research, please visit www.kimmeridge.com.
About Forest Carbon Works
Forest Carbon Works (FCW), which started as a service platform under leading project developer EP Carbon in 2016, is the country's first carbon credit developer that is paying small U.S. landowners for carbon captured through the conservation and sustainable management of their forests. Through a combination of advanced technology and system efficiencies, long standing expertise in carbon project development, and a hands-on approach rooted in applied forestry, FCW enables small forest owners to access and directly benefit from the complex carbon offset market. Since its inception, FCW has gained the participation of over 2,000 individual landowners and land trusts in its platform, provided free boots-on-the-ground carbon inventories for more than 60k acres, and successfully developed the smallest forest carbon projects to date, with the lowest being 54 acres located in coastal Oregon that is owned by an individual family forest owner. To learn more about Forest Carbon Works and if a carbon program is right for you, please visit www.forestcarbonworks.org.
Daniel Yunger / Hallie Wolff / Emma Cloyd
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