Chestnut Carbon to Deliver High-Quality Carbon Removal Credits through a Multi-year Offtake Agreement with Microsoft

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Chestnut Carbon (NASDAQ: MSFT) to Remove 362,000 Tons of Carbon for Microsoft in Phase I of the Largest U.S. Gold Standard-Registered Afforestation Project

Insights

Environmental Economist

The recent agreement between Chestnut Carbon and Microsoft to supply carbon removal credits signifies a substantial commitment by a major technology firm to address its carbon footprint. This move is not only environmentally significant but also carries implications for Microsoft's corporate social responsibility profile and can influence investor perception.

The magnitude of the deal, involving the largest afforestation project certified under the Gold Standard, underscores the growing market for carbon credits and the potential for such environmental initiatives to become a noteworthy revenue stream for companies like Chestnut. The long-term nature of the agreement provides a predictable income source for Chestnut, while Microsoft secures a stable supply of carbon credits to help meet its sustainability goals.

Investors should consider the impact of such agreements on the long-term valuation of companies, as they may lead to reduced regulatory risks and enhanced brand reputation. However, the actual effectiveness of afforestation in carbon sequestration and the permanence of such carbon removals can be subject to scientific scrutiny and market volatility.

Sustainability Analyst

The commitment to afforestation as a means of carbon removal is a forward-looking strategy that aligns with global trends toward sustainability. The deal between Chestnut and Microsoft reflects the increasing demand for verifiable and durable carbon sequestration methods. The emphasis on additional, verified and certified carbon credits highlights the importance of credibility and standards in the carbon offset market.

Stakeholders, including investors and environmental groups, are likely to scrutinize the long-term conservation and biodiversity aspects of the project. The broader environmental benefits cited, such as improved air and water quality and restoration of natural habitats, contribute to the project's appeal and may enhance the social license to operate for both Chestnut and Microsoft.

However, the scalability and cost-effectiveness of such large-scale nature-based solutions must be balanced against potential challenges, including land use conflicts, maintenance of the afforested areas and the verification of actual carbon removal achieved.

Industry Analyst

The strategic partnership between Chestnut Carbon and Microsoft can be seen as a benchmark for the carbon offset industry. This sector is poised for growth as more companies seek to meet their emissions targets through nature-based solutions. Chestnut's plan to expand its capacity to 500,000 acres indicates an anticipation of a burgeoning market demand.

For other players in the industry, this deal sets a precedent in terms of project scale and the duration of offtake agreements. It may prompt competitors to seek similar long-term arrangements with large corporations, potentially leading to increased investment in the sector and innovation in carbon removal technologies.

From an industry perspective, the success of this project could catalyze further investments in afforestation and other nature-based carbon removal strategies, potentially reshaping the landscape of corporate sustainability efforts.

Chestnut will Remove 362,000 Tons of Carbon for Microsoft in Phase I of the Largest U.S. Gold Standard-Registered Afforestation Project

NEW YORK, Dec. 20, 2023 /PRNewswire/ -- Chestnut Carbon ("Chestnut"), a nature-based carbon removal developer founded by private investment firm Kimmeridge Energy Management Company, LLC ("Kimmeridge"), today announced that it has entered into a multi-year offtake agreement to provide Microsoft (NASDAQ: MSFT) with high-quality, nature-based carbon removal derived entirely from a novel afforestation project based in the United States.

This is the largest afforestation project certified under the Gold Standard to date, and a testament to the scalability of high-quality nature-based solutions. Through a first-of-its-kind 15-year offtake agreement for nature-based credits, Chestnut will deliver 362,000 tons of projected carbon removal from its Sustainable Restoration Project Phase I and up to 2.7 million tons in aggregate across subsequent phases. Chestnut's differentiated focus on positive impact, verifiability and execution aligns with Microsoft's criteria for high-quality carbon removals.

Chestnut is growing its capacity to 500,000 acres and 100 million tons of carbon removal in order to meet the increasing demand for high-quality, cost-effective carbon removal solutions by corporations and governments across the globe.

Key features of Chestnut's Sustainable Restoration Project:

• Chestnut carbon removal credits are additional, verified and certified to the highest standards – meeting the rigorous requirements of Gold Standard, the premier crediting standard for carbon projects.
  
  
• Chestnut stands behind the durability of its carbon sequestration through long-term conservation of the land, planting biodiversity and risk mitigation practices.
  
  
• Broader environmental and stakeholder benefits include enhancing ecological systems, bolstering local communities, improving air and water quality and restoring natural habitats to their original state.

Ben Dell, CEO of Chestnut and Managing Partner of Kimmeridge said, "We're pleased to be working with Microsoft on its commendable journey to offset emissions through high-quality nature-based solutions. When launching Chestnut in 2022, we were guided by a strong belief that these solutions are the most attractive, scalable and cost-effective means for sustainability-minded organizations. We are actively building out our platform to meet demand from the most discerning customers and look forward to announcing additional blue-chip partnerships in the near future."

"Microsoft's 15-year purchase agreement with Chestnut Carbon for afforestation-based carbon removal credits is a positive step towards Microsoft's carbon negative goals. We are excited to collaborate with Chestnut and its Sustainable Restoration Project for high-quality, nature-based solutions located in the United States," said Brian Marrs, Senior Director of Energy & Carbon Removal at Microsoft.

About Chestnut Carbon

Founded in 2022 with the support of energy-focused private equity firm Kimmeridge, Chestnut Carbon ("Chestnut") is a leading developer of nature-based carbon removal credits. It generates U.S.-based, high-quality forest carbon offsets that are additional, verifiable and biodiverse to accelerate the path to net zero across a range of industries. Chestnut's expertise is bolstered by its acquisition of Forest Carbon Works, a public benefit corporation, with a proprietary approach to developing U.S. forest carbon offset projects on family-owned forestland. The Chestnut team is uniquely positioned to address carbon removal, with diverse backgrounds including forestry, carbon regulation, environment, finance and land. For additional information on Chestnut, its strategies and environmental stewardship thought leadership, please visit https://chestnutcarbon.com/.  

Media:
Daniel Yunger / Hallie Wolff / Emma Cloyd
Kekst-Kimmeridge@kekstcnc.com
917.574.8582 / 917.842.1127

View original content:https://www.prnewswire.com/news-releases/chestnut-carbon-to-deliver-high-quality-carbon-removal-credits-through-a-multi-year-offtake-agreement-with-microsoft-302019608.html

SOURCE Chestnut Carbon

FAQ

What is the name of the company behind the afforestation project for Microsoft?

The company behind the afforestation project for Microsoft is Chestnut Carbon (NASDAQ: MSFT).

How many tons of carbon will Chestnut Carbon remove for Microsoft in Phase I of the project?

Chestnut Carbon will remove 362,000 tons of carbon for Microsoft in Phase I of the project.

What is the duration of the offtake agreement between Chestnut Carbon and Microsoft?

The offtake agreement between Chestnut Carbon and Microsoft is for 15 years.

What are the key features of Chestnut's Sustainable Restoration Project?

Key features of Chestnut's Sustainable Restoration Project include additional, verified and certified carbon removal credits meeting the rigorous requirements of Gold Standard, long-term conservation of the land, planting biodiversity, and broader environmental and stakeholder benefits.

Who is the CEO of Chestnut Carbon?

The CEO of Chestnut Carbon is Ben Dell, who is also the Managing Partner of Kimmeridge.