This week, the American Forest Foundation
(AFF) announced it will hold the first auction for carbon credits for its
Family Forest Carbon Program (FFCP) in
February 2025.
The American Forest Foundation Carbon
Auction
— the first of its kind for a US nature-based carbon project — will offer
buyers a transparent and streamlined way to secure high-quality carbon
credits
while supporting rural communities and family forest owners.
More companies than ever are working to curtail their climate-changing
emissions, but there remains an urgent gap in the upfront capital needed to
deploy high-quality carbon
projects
to help meet climate-mitigation targets and keep global temperature rise within
1.5°C. Globally, only 1.2 percent of the annual potential of nature-based
solutions has been
unlocked
by the voluntary carbon
market
(VCM). If this underinvestment continues, we risk not financing enough
projects to produce a sufficient supply of high-quality credits to reach our
collective climate goals. Upfront payment addresses that gap.
The AFF’s Carbon Auction will help scale financing and deployment of
nature-based solutions through a transparent, cost-efficient approach —
companies will be able to access all due diligence resources in one central
place over several weeks and then bid on credits during a one-week period in
February. This approach will also give the Family Forest Carbon Program the
upfront funding it needs to deliver measurable carbon impacts and high-quality
ecological and community co-benefits.
“Family forest owners are ready to take necessary climate action, and time is of
the essence for corporations to invest in nature-based
solutions
to meet ambitious climate goals,” said AFF CEO Rita
Hite. “This auction will be a
game-changing opportunity for buyers to secure premium carbon credits while
supporting family forest owners and rural communities.”
Tim Stout, a Vermont landowner enrolled in the Family Forest Carbon Program,
stands in the woods he proudly stewards. | Image credit: American Forest
Foundation
AFF says the Carbon Auction will reshape the VCM by:
-
closing the climate financing gap — Corporations often seek to buy
carbon credits at lower prices and pay upon delivery, yet developers need
upfront capital to kickstart their work. The auction will bridge the divide
by offering hybrid commercial terms where buyers will provide a partial
upfront payment to catalyze the project with the remainder to be paid upon
delivery. -
streamlining the due diligence process — The auction format will address
the transactional frictions buyers and developers commonly face when
transacting carbon credits — such as the protracted process of discovery,
the need to manage multiple sources of due diligence data and the lack of
insight into market prices. Through this auction, buyers will have access to
the due diligence resources in one central place and the ability to see
anonymous competing bids. -
linking payments to impact — Companies will prepay through down payments
directly tied to project milestones achieved — including landowners and
acres enrolled, and verification milestones. This method of down payments
will allow companies to tie their upfront investment to measurable impact
for communities and the planet. -
incentivizing early investment — Companies benefit from significant
discounts on credits when they prepay. This helps ensure buyers get carbon
credits at a competitive price, protecting against future price increases
while safeguarding long-term decarbonization strategies and lowering overall
costs.
By providing a share of resources upfront, buyers will be able to ensure that
the Family Forest Carbon
Program,
developed by AFF and The Nature Conservancy, has the funding required to
implement next-generation approaches to credit quality, resulting in credits
that are highly additional and that also deliver significant
co-benefits.
“The FFCP is a core element of my urgent goal to preserve our forests and
mitigate climate change, so my grandchildren (and their generation) can enjoy
this farm and the rest of Vermont the way that our family has enjoyed them over
the last 80 years,” said Tim Stout, principal of Northam Forest
Carbon and a Vermont landowner
enrolled in the Family Forest Carbon Program. “I want this farm to be a land of
hope. Look at what small landowners can do to actively participate in climate
action and build resilient forests! It’s astounding how much we, as landowners,
can do with the right support.”
“This groundbreaking auction will redefine how corporations invest in
nature-based solutions to address the threats of climate change and biodiversity
loss,” said Kevin Maddaford,
director of US and Canada Carbon Markets at The Nature Conservancy. “It will
also advance carbon market access for US family forests owners and support the
health of woodlands.”
Interested parties can find additional details and register on the American
Forest Foundation Carbon
Auction
website.
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Sustainable Brands Staff
Published Oct 16, 2024 8am EDT / 5am PDT / 1pm BST / 2pm CEST
