Quantum Commodity Intelligence – US forest carbon project developer Chestnut Carbon has grown rapidly in three years of existence. Already in 2025 the company has concluded a second offtake deal with Microsoft covering 7 million ARR credits, raised $160 million in Series B funding, announced a partnership a major Formula One racing team and issued and sold the first credits from its IFM membership programme. Quantum spoke with the company’s chief financial officer, Greg Adams.
What’s the secret of Chestnut’s apparent success in a sector where some other developers have struggled in recent years?
Chestnut was founded in 2022, backed by a private equity firm, Kimmeridge. At inception we had an infrastructure, a view about risk-adjusted returns and access to capital that a lot of other folks just don’t have. That was certainly a tremendous starting point.
Our business model is elegantly simple – we buy land, plant trees, sell carbon credits. Or in the case of improved forest management, work with third-party landowners. For me it’s ‘do one thing and do it really well’ — or in our case two things, IFM and afforestation.
We just keep it simple, and focus on delivering the highest-quality, highest-integrity product, either IFM or afforestation in our case, to our customers as possible.
We had a thesis that if we build a conservation-level forest that’s utilising native species, with biodiversity, multiple species of hardwoods and softwoods, and we build this project to the highest standards for afforestation, then discerning buyers will come. And in early 2023 we found ourselves responding to an RFP from Microsoft, and off we went.
How have you found the process of engaging with buyers?
Ultimately we’re selling reputational risk insurance. We’re catering to voluntary carbon credit buyers for whom both quality and integrity matter most. They don’t need to buy, they choose to buy.
Taking Microsoft as an example: Whatever they pay for a credit from Chestnut is going to pale by comparison if what they buy from us ends up in a negative article from a reputational standpoint.
The reputational impact to them is going to outweigh whatever money they would have paid for our carbon credit. And so we recognise that and cherish that, and we want to make sure that we are good stewards of that trust they impart in us.
It’s really a case of curating these projects, doing that best that we possibly can, and delivering on what we said we were going to do.
All your operations are currently based in the US. Is this likely to change in the near future?
We’re focussed on the US right now. I think the US affords us with certain land rights that we don’t necessarily get from other areas. Look at afforestation – what helps reinforce the confidence level that buyers have when they buy our afforestation credits? Today we own the land that those carbon projects are built upon. We have roughly 50,000 acres that we’ve purchased so far. It’s the US, so the laws of land ownership are well codified.
When we say we’re going to sell removal credits with a permanence of 50 or 100 years, we can say that with credibility because you know it’s our project, our land. That’s a harder claim to make in other jurisdictions where the laws of land ownership may be more questionable, and therefore that starts to potentially erode the confidence around permanence.
Do you envision any impact on your operations from the new administration in the US?
I recognise that the winds may have changed, but my belief is that the real way to make inroads against climate change is doing it through the for-profit lens — doing well by doing good — driving scale. So first and foremost we’re conservation for profit. We’re unapologetic in that regard.
If you think about our afforestation projects in the Southeast, it’s traditionally red states. But what do people like generally, on both sides of the aisle?
We’re building a forest, we’re creating a better habitat for wildlife, for hunting and fishing and other recreational opportunities for the communities in which we operate. We’re cleaning up water, we’re cleaning up air, we’re creating jobs, we’re paying taxes. And we’re doing all of this without any government incentives or handouts.
And so from our perspective we’re building these forests for lifetimes, extending beyond any one single administration. I genuinely believe that we have tapped into something that everybody, wherever you fall on the political spectrum, can embrace.
How do you see the market evolving in light of its well-documented integrity issues?
This market has struggled, and I think rightfully so in a lot of ways, from a lack of credibility. A lot of folks out there are purporting to do certain things, but when push comes to shove they’ve cut corners, or it wasn’t fully formed, or they bite off more than they could chew.
Particularly given the scrutiny and the issues that a lot of people in the space have faced in the last two or three years, I think ultimately we as developers need to be that much more careful and purposeful about what we’re bringing to the market.
You’re seeing fewer people buying really cheap credits as a check-the-box exercise. Because if it backfires — you’re going to get what you paid for. Part of what we’re trying to do is to demonstrate that your approach, the standard to which you’re adhering, the permanence that you are guaranteeing, your methodology, your partners, the location — all of this matters, and all of this ultimately manifests itself in quality. And I do believe there is a coalescence around quality.
I think ultimately you need to see some coalescing not just around quality, but around the quality of the developer. Because at the end of the day if I’m a buyer and I have 2030, 2040 targets, what use is it me signing up an offtake contract from a developer that may or may not be there in 2026, let alone 2030?
You as a buyer want to see us stick around. You want us to make money — not a rapacious return, but you should want to see us be profitable, because if we do so we can attract a lower cost of capital, we can create scale, be there for the long term, and we can then help you to credibly deliver against your goals and help to normalise this space.
Whatever capital is there, I think it’s getting allocated to those developers that frankly can deliver, both across the spectrum of technologies but also probably within a more narrow subset of geographies.
How do you see Chestnut fitting in this evolving space?
I think we are well-placed. Relative to others in the space I think we’ve got the team and the understanding, and the support of really great, discerning customers. But we need that market to mature, and to the extent that we can we’ll use or own success as a way to kick-start or catalyse that maturation process along the lines of ‘how do we think about the forward curve, how do we think about making this more of a tradable commodity?’ That’s certainly in the longer term where we think the market will go, but it’s going to take some time to get there.
We want to be at the front end of the cost curve. We want to be a high-quality, high-integrity, permanent solution that’s also cost-effective. Because if you do all those things but you’re not cost-effective, you’re not going to scale that business.
Are you optimistic about the prospects for meeting the challenge presented by climate change?
There’s no magic wand. It will necessitate having a myriad of different solutions. The buyers need to be discerning, and they’ll vote with their wallets.
We expect that tomorrow will be a challenge. But we’re prepared for that challenge, we’re ready for it and obviously emboldened by the success we’ve had, but we certainly don’t take it for granted. Worst-case scenario, we build forests. As of April 1, across three planting seasons since our inception, we’ll have planted 17 million trees thus far. I’m really proud of that.
