The carbon offset market receives another financial boost this month. The private-equity firm Kimmeridge Energy Management has invested up to $200 million into its own carbon offsets startup Chestnut Carbon.
Chestnut Carbon is a leading nature-based carbon offsetting platform. It already has experience developing such projects from start to finish. It is a fully integrated carbon offset developer, as it has proprietary measurement technology, experience with a range of verifiers and landowners. It ensures the accuracy and reliability of the carbon credits.
Ben Dell, Founder and Managing Partner of Kimmeridge, commented on the deal by saying: “… 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.”
According to Mr Dell, nature-based solutions for reducing emissions are at the low end of the carbon abatement cost curve and possess the greatest potential for implementation at scale. This opinion is popular, even though some natural CO2 offset methods like planting trees and growing sustainable forests hide the risk of being destroyed by fires or other external and unpredictable events.
Chestnut also recently closed the acquisition of Forest Carbon Works (FCW) – a public benefit corporation with specialized experience developing US forest carbon offset projects on family-owned forestland.
The company is a mission-driven corporation and aims to unlock the carbon offset market for small forest owners. There are 270 million acres of family-owned forest in the US and they are normally excluded from carbon offset projects development due to high costs and complex processes.
FCW has developed a proprietary approach that efficiently and accurately assesses carbon inventories and thus supports the long-term conservation of American forests.
“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,” adds Mr Dell regarding FCW team and CEO and Founder Kyle Holland.
The investment by Kimmeridge is substantial and marks the increased interest of investors in natural carbon sinks and the carbon offsets market. As it is hard for the industry to stop emitting carbon entirely tomorrow, carbon offsets represent an opportunity for both emissions reduction projects across the world and companies intending to reach the net zero ambition.