Rayonier’s Land-Based Solutions: Advancing a Low-Carbon Economy

Rhea-AI Summary

Rayonier, a major landowner, is focusing on land-based solutions to address environmental needs and support the transition to a low-carbon economy. These solutions include:

1. Alternative land uses: Leasing land for solar and wind farms to produce clean energy. In 2023, the first solar farm on Rayonier land came online in Texas, powering 30,000 homes and avoiding 250,000 metric tons of CO₂ emissions annually.

2. Carbon capture and storage (CCS): Providing underground pore space for CO₂ storage. Rayonier announced 75,000 acres of pore space lease agreements in 2024.

3. Carbon sequestration: Maximizing carbon capture in forests and participating in carbon offset markets. In 2023, Rayonier generated $23 million in New Zealand Unit sales.

4. Bioenergy and biofuel production: Supplying wood fiber for renewable fuels and exploring opportunities in bioenergy with carbon capture and storage (BECCS).

5. Environmental conservation: Implementing conservation strategies and enhancing biodiversity through sustainable land management practices.

Positive

• First solar farm on Rayonier land came online in Texas, powering 30,000 homes and avoiding 250,000 metric tons of CO₂ emissions annually
• Announced 75,000 acres of underground pore space lease agreements for carbon capture and storage in 2024
• Generated $23 million in New Zealand Unit sales from carbon offset market participation in 2023
• Exploring opportunities in bioenergy with carbon capture and storage (BECCS) and Sustainable Aviation Fuel (SAF) production

Negative

• None.

Insights

Financial Analyst

Rayonier's focus on land-based solutions for a low-carbon economy represents a strategic pivot that could significantly impact the company's long-term financial outlook. The diversification into renewable energy leasing, carbon capture and storage (CCS) and carbon credit markets opens up new revenue streams beyond traditional timber operations.

Key financial implications include:

• New revenue from solar and wind farm leases, with the first solar project already online in Texas
• Potential income from CCS pore space leases, with 75,000 acres already committed
• $23 million generated from carbon credit sales in New Zealand in 2023, indicating a growing market
• Future opportunities in bioenergy and sustainable aviation fuel markets

While these initiatives are promising, investors should note that they are still in early stages and may take time to materially impact Rayonier's financials. The company's ability to execute on these opportunities while maintaining its core timber business will be important for long-term value creation.

Environmental Policy Expert

Rayonier's strategic shift towards land-based climate solutions aligns well with global environmental policies and market trends. The company is positioning itself at the intersection of several key climate mitigation strategies:

• Renewable energy expansion, supporting the transition to clean power
• Carbon capture and storage (CCS), critical for hard-to-abate industries
• Sustainable forest management for carbon sequestration
• Bioenergy and sustainable aviation fuel production

This diversified approach hedges against policy changes in any single area and demonstrates Rayonier's commitment to environmental stewardship. The company's participation in New Zealand's regulated carbon market and exploration of U.S. voluntary markets show adaptability to different regulatory environments.

However, the success of these initiatives will depend on continued policy support for climate solutions and the evolution of carbon pricing mechanisms. Investors should monitor policy developments, particularly in the U.S., where a cohesive federal climate strategy could significantly boost Rayonier's new business lines.

Originally published on Rayonier.com

NORTHAMPTON, MA / ACCESSWIRE / October 15, 2024 / Rayonier

What are Land-Based Solutions?

The term "land-based solutions" refers to land uses that address the environmental needs of the world. In this summary, we examine land-based solutions Rayonier is positioned to provide that could have a significant positive impact on the world.

As our world seeks to transition to a low-carbon economy, the demand for land and renewable forest products is on the rise. We believe these resources will play a key role in addressing the impacts of climate change and the excess carbon in the atmosphere.

Many strategies to enhance and sustain the health of our planet will come from the proper use of land. As a landowner responsible for millions of acres of forests, Rayonier is eager to deliver the land-based solutions our assets can provide.

These land uses address some of the key environmental needs of the world. We believe it's our responsibility to lead, innovate and collaborate with others to ensure a healthy and sustainable future. We are working closely with community and business leaders to leverage our forestlands to make the greatest positive impact.

Rayonier views land-based solutions through the following broad categories:

Positioning land for alternative and additional uses

Alternative uses include solar and wind farms, which produce clean energy, powering homes and businesses while drastically reducing the amount of carbon dioxide (CO₂) emissions required to produce that energy.

"Renewables produce energy with a lot less carbon emissions than other traditional forms of power production, such as coal and gas," explains our Vice President of Energy Resources Rob Fancher.

Renewable energy producers support a healthier environment by reducing air pollution, mitigating climate change, conserving water compared to fossil fuel plants and minimizing noise pollution. They also provide local jobs, increase tax revenue and make communities more attractive to new businesses.

"Many businesses are interested in lowering their carbon footprint and they're looking to relocate their facilities to areas that have options for renewable energy," Rob explains.

Leasing land for wind and solar farms

Sites with strong solar and wind potential are plentiful across Rayonier's ownership, which is attractive to solar companies because of our large land base and proximity to power substations.

Thanks to advancements in technology, solar power has become one of the most affordable energy sources, with the levelized cost of electricity declining more than 80% from 2008 to 2022, according to this Berkeley Lab study.

Solar makes up more than half of new energy

Due to its relative affordability and positive impact on climate, solar is now making up more than half of all new energy being introduced into the grid, as reported here by the U.S. Energy Information Administration.

In 2023, the first solar farm on Rayonier land came online in Polk County, Texas. Longroad Energy's 150 megawatt project produces enough clean energy to power 30,000 homes, avoiding an estimated 250,000 metric tons of CO₂ emissions annually.

"When we're looking for solar developers to pursue a project, we really want a reputable, trustworthy company that shares our core values and our long-term commitment to environmental stewardship," says Business Development Manager Zan Frederick. He says his team was pleased with the steps Longroad Energy took to protect the environment around the project site.

The solar farm, which includes about 600 acres of Rayonier land, implements water quality protection measures such as reservoirs and forest buffers. It also was built around wetlands to protect the ecosystems within its boundaries, with solar panels on only 1,300 acres of the approximately 2,500-acre site.

Providing Pore Space For Carbon Capture and Storage Opportunities

In addition to green energy sites, Rayonier owns land that is well-situated to provide carbon emitters, such as factories and power plants, access to pore space for carbon capture and storage-or, CCS-for their emissions.

CCS begins with the CO₂ producer, who captures the CO₂ from the atmosphere or the point source of the emissions and pipes them into an underground pipe system. This system transports the emissions to our land in liquid form. The CO₂ is then sent deep underground-a half mile or more-and injected into a rock formation that will store it permanently.

With more than half of the world's 2,000 largest companies committed to net zero emissions, CCS is expected to be a major contributor to decarbonization. CCS demand is projected to grow rapidly, with an expected compound annual growth rate of 6.2 percent annually from 2023 to 2030, reaching more than 300 Mtpa (million tonnes per annum), according to the World Economic Forum.

Our southern land base includes large tracts of land with geologic capacity for CCS. Many of these properties are within close proximity to high-purity emissions sources as well as existing pipelines and rights-of-way.

Rayonier announced in 2024 the granting of 75,000 acres of underground pore space lease agreements. These leases allow emitters to use our land for CCS. By making land available for CCS, we are facilitating a critical solution for reducing carbon emissions, while still preserving the primary use of our land for timber operations.

"By providing CCS pore space while continuing to sustainably manage the forests above, we're able to deliver even more environmental benefits through our land resources," said Rayonier Executive Vice President and Chief Resource Officer Doug Long. "We're committed to advancing these types of land-based solutions to combat climate change."

Elevating the role our forests play in capturing carbon

Trees capture and store carbon not only while they're growing, but also store carbon in the products they become, such as lumber and plywood for housing construction.

Beyond these direct product uses, we are able to leverage our foresters' expertise and change how our forests are managed to maximize the carbon captured. These management changes produce carbon credits to be sold in offset markets.

In New Zealand, we participate in the nation's regulated carbon offset market, known as the New Zealand Emissions Trading Scheme. Through this market, registered forests generate credits known as New Zealand Units (NZUs). Companies looking to offset their emissions purchase the NZUs and "retire" them once they claim that credit. In 2023, Rayonier generated $23 million in NZU sales.

Across our U.S. lands, where carbon markets are voluntary, we are exploring opportunities to elevate the carbon sequestered within the forests we manage.

Improved Forest Management (IFM) projects currently under consideration could maximize our carbon sequestration using science-driven forestry techniques. This might include extending how long timberlands grow before they're harvested, establishing alternative native species, or managing the land in a different manner.

Carbon credits can also be generated from afforestation activity, in which land that has been used for different purposes, such as cattle grazing, is converted into forests.

Rayonier is currently working on both IFM and afforestation carbon credit projects in the U.S.

Producing the wood fiber needed to fuel bioenergy and biofuel systems of the future

There is a rising need for the wood fiber we grow as manufacturing facilities seek to become more environmentally positive. Wood-based renewable fuels for airplanes, trains and vehicles as well as electricity generated through wood-based bioenergy reduce carbon emissions. Using these products in place of traditional fuels can significantly reduce the carbon intensity of the energy the world needs.

One specific area of opportunity is bioenergy with carbon capture and storage (BECCS) facilities. BECCS is a growing area of interest to address manufacturers' emissions, especially in the U.S. South, where a large portion of our timberlands are concentrated. BECCS facilities burn woody biomass for energy production and then capture and store the emitted carbon-aiming to create a carbon-negative cycle.

The demand for Sustainable Aviation Fuel, known as SAF, is also on the rise. Air travel is currently responsible for 12% of all transportation-related CO₂ emissions, according to this article by the U.S. Department of Energy. Existing aircraft can use a blend of SAF and jet fuel to reduce emissions.

Members of the International Air Transport Association (IATA), representing more than 80 percent of global air traffic, have committed to achieving net-zero carbon emissions from their operations by 2050. IATA's Fly Net Zero strategy relies on SAF for 65% of the emission reductions, which will lead to significant increasing demand for SAF in the future.

Embracing environmental and biodiversity conservation

We are committed to sustainable land management practices that balance various uses while ensuring the protection of critical natural habitats. This includes implementing conservation strategies, maintaining or enhancing biodiversity and adhering to environmental regulations to conserve the ecological integrity of significant areas under our stewardship.

We're actively involved in conservation easement solutions that permanently preclude certain activities such as high-density development or mining from taking place on those properties. These solutions make larger conservation efforts possible in areas near our ownership.

Through biodiversity enhancement efforts such as afforestation of lands from other uses back to forests, we can prioritize habitat for vulnerable wildlife species, as well as help createcontinuity of wildlife corridors and sensitive areas, all in an effort to contribute to environmental conservation.

Proud to be Part of the Solution

At Rayonier, we're proud to continuously seek more ways to be part of the solution. Through the land-based solutions we work with stakeholders to deliver, as well as our timber business's climate-smart forest management, we can play an important role in advancing the transition to a low-carbon economy and addressing the risks posed by climate change.

View additional multimedia and more ESG storytelling from Rayonier on 3blmedia.com.

Contact Info:
Spokesperson: Rayonier
Website: https://www.3blmedia.com/profiles/rayonier
Email: info@3blmedia.com

SOURCE: Rayonier

View the original press release on accesswire.com

FAQ

What land-based solutions is Rayonier (RYN) implementing to support a low-carbon economy?

Rayonier (RYN) is implementing several land-based solutions, including leasing land for solar and wind farms, providing underground pore space for carbon capture and storage, maximizing carbon sequestration in forests, supplying wood fiber for bioenergy and biofuel production, and implementing conservation strategies to enhance biodiversity.

How much revenue did Rayonier (RYN) generate from carbon offset sales in New Zealand in 2023?

In 2023, Rayonier (RYN) generated $23 million in revenue from the sale of New Zealand Units (NZUs) in the New Zealand Emissions Trading Scheme, which is the country's regulated carbon offset market.

What was the impact of Rayonier's (RYN) first solar farm project in Texas?

Rayonier's (RYN) first solar farm project in Polk County, Texas, which came online in 2023, produces enough clean energy to power 30,000 homes and is estimated to avoid 250,000 metric tons of CO₂ emissions annually.

How many acres of pore space did Rayonier (RYN) lease for carbon capture and storage in 2024?

In 2024, Rayonier (RYN) announced the granting of 75,000 acres of underground pore space lease agreements for carbon capture and storage (CCS) operations.