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Microsoft and nature-based carbon removal startup Chestnut Carbon announced today a new 25-year offtake agreement, […]]
Microsoft Inks 7 Million Ton Nature-Based Carbon Removal Megadeal – ESG Today
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Microsoft Inks 7 Million Ton Nature-Based Carbon Removal Megadeal
Mark Segal
January 31, 2025
Microsoft and nature-based carbon removal startup Chestnut Carbon announced today a new 25-year offtake agreement, with Chestnut providing Microsoft with more than 7 million tons of nature-based carbon removal credits, generated from its forest projects in the Southern U.S.
The deal marks the largest-ever voluntary corporate investment in conservation forestry in the U.S., according to Chestnut Carbon, restoring approximately 60,000 acres of land, and planting more than 35 million native, biodiverse hardwood and softwood trees.
Launched in 2022 by energy sector-focused alternative asset manager Kimmeridge, Chestnut helps reduce carbon emissions by planting and developing long-term forest projects that create biodiverse ecosystems and community benefits. Chestnut’s projects acquire marginal crop and pasture lands, and partners with local foresters, nurseries, and community members to develop an ideal forest ecosystem based on native tree species, soil, drainage, and community land use.
The new agreement will provide carbon removal credits from Chestnut’s afforestation, reforestation, and revegetation (ARR) project in Arkansas, Texas, and Louisiana. Key features of the project highlighted by Chestnut included the durability of its carbon sequestration, and additionality, with the lands not being restored in the absence of the carbon market, as well as environmental and stakeholder benefits such as improvements to native wildlife habitats, air and water quality, expansion of land use alternatives, community engagement and economic development.
According to Chestnut, the new agreement with Microsoft will enable it to grow its ARR portfolio to 500,000 acres by 2030 and to remove 100 million tons of CO2 from the atmosphere over a 50-year crediting period.
Ben Dell, CEO of Chestnut and Managing Partner of Kimmeridge, said:
“We’re excited to be expanding our collaboration with Microsoft given their market leadership in net zero commitments and the signing of a second agreement within the span of a year reaffirms their view that Chestnut is delivering high quality removal credits. We’re confident in our belief that nature-based afforestation solutions are the most attractive, scalable, and cost-effective means for removing carbon from the atmosphere today. We continue to bring high-quality credits to market for discerning customers and look forward to building on our leading position in the market.”
The new transaction adds to an initial 15-year agreement between Microsoft and Chestnut in December 2024 for up to 3 million tons of carbon credits, and marks a further expansion to Microsoft’s diverse portfolio of carbon removal projects, forming part of the tech giant’s initiative to become carbon negative by 2030. The portfolio includes several large-scale reforestation-based agreements, including a 3.5 million ton deal announced earlier this month with Brazil-based re.green, in addition to technologies including, ocean-based carbon removal, and biochar-based projects, and direct air capture (DAC) agreements.
Brian Marrs, Senior Director of Energy & Carbon Removal at Microsoft, said:
“This agreement with Chestnut Carbon is another positive step towards Microsoft’s goal to become carbon negative by 2030. We look forward to the prospect of scaling forest restoration within the United States, attracting sophisticated private capital in the process. We are glad to see the Sustainable Restoration Project diversify the ecological impact of our global carbon removal portfolio.”
Mark founded ESG Today following a 20 year career in investment management and research. Prior to founding ESG Today, Mark worked at Delaney Capital Management (DCM) in Toronto, Canada, most recently as the firm’s head of U.S. equities. While at DCM, Mark was part of the firm’s ESG team, responsible for evaluating and tracking the sustainability factors impacting portfolio companies, and assessing the suitability of companies for portfolio inclusion. Mark also spent several years in the sell-side research industry, covering the technology and services sectors. Mark holds an MBA from Columbia University in New York, a BBA from the Schulich School of Business at York University in Toronto, and is a CFA charterholder.
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