As climate change intensifies, nations and industries are seeking innovative ways to cut carbon footprints. Carbon credits have emerged as a key tool in this effort. Planting new trees also generates carbon credits. Apart from this, trees reduce carbon dioxide, restore ecosystems and biodiversity, and combat desertification.

MIT’s Climate Portal studied that in 2021, the U.S. released 5.6 billion tons of CO2. To absorb that, over 30 million hectares of trees—about the size of New Mexico are need. It estimated:

• A hectare of trees can absorb 50 tons of carbon, which equals about 180 tons of CO2 in the atmosphere.

But not all trees are the same. Some forests store as little as 10 tons of carbon per hectare, while others store over 1,000. So, planting trees to offset emissions or generate carbon credits is more complicated than it seems.

In this article, we will discuss everything you need to know about planting trees for carbon credits. Let’s study in depth.

How Carbon Credits Are Generated Through Tree Planting

Carbon credits help balance or offset emissions by funding projects that reduce or remove greenhouse gases. Each credit equals one metric ton of CO₂ either captured or avoided.

Tree planting is a popular way to generate carbon credits. When trees are grown specifically to absorb carbon, the project can be certified, and the credits can be sold. Companies and individuals buy these credits to offset their emissions, support sustainability goals, or meet regulations.

This system creates a financial incentive for reforestation, encouraging tree planting worldwide. Beyond carbon storage, forests also clean the air, protect the soil, support wildlife, and regulate water cycles. These extra benefits make tree-based carbon credits even more valuable for the environment and communities.

How Trees Absorb Carbon: The Science of Sequestration

Trees absorb and store carbon through photosynthesis. They take in carbon dioxide, use sunlight for energy, and store that energy as carbohydrates in their trunks, branches, leaves, and roots. As they grow, they lock away more carbon in their biomass.

Mature forests hold large amounts of carbon, but young forests absorb it more quickly as they grow. That’s why afforestation projects often plant fast-growing species to maximize carbon capture in the early years.

Trees also help store carbon in the soil. Their roots improve soil health, increasing organic matter and trapping even more carbon. This combination of tree growth and soil storage makes afforestation a powerful way to fight climate change.

In the first ten years, trees grow quickly and absorb a lot of CO₂. Young trees need plenty of energy to develop strong roots, trunks, and branches. This early growth stage is crucial for their health and long-term strength.

Afforestation vs. Reforestation: What’s the Difference?

While afforestation and reforestation both involve planting trees, they address different environmental challenges and have distinct definitions:

Afforestation

Afforestation means planting forests in areas that have never had them. This process creates new ecosystems, often in degraded or dry lands. These projects work well in places where desertification or land damage has left the land barren. By adding trees, afforestation boosts land productivity and offers new homes for wildlife.

Reforestation

Reforestation is about restoring forests that have been cut down or damaged. This process aims to bring back the ecological balance in areas that once had forests. These areas may have lost trees due to logging, farming, or urban growth. Reforestation projects help rebuild ecosystems, enhance biodiversity, and reduce the impact of deforestation.

Afforestation and reforestation help with carbon sequestration. Afforestation is special because it increases global forest cover in new areas. Reforestation focuses on recovery and restoration, tackling the damage from deforestation.

Carbon credits are generated from afforestation and reforestation projects. These projects track how much CO2 the new trees absorb. Strict monitoring and verification confirm these claims. Once verified, the sequestered carbon turns into carbon credits, which can be sold in carbon markets.

The Role of Afforestation in Carbon Credits Market

Afforestation is vital for the carbon credit market. Tree-planting projects in barren areas capture carbon effectively. Independent organizations verify and certify this process.

Companies buy certified credits to offset their emissions. The revenue from these credits supports more afforestation projects. This creates a self-sustaining cycle that benefits both the environment and project developers.

Afforestation projects align with global climate goals, such as the Paris Agreement. These goals emphasize nature-based solutions for net-zero emissions. By increasing forest cover, countries can meet their NDCs and promote global carbon neutrality.

Challenges and Opportunities of Reducing CO2 Emissions with Trees

Afforestation has many benefits, but it also has challenges. Ensuring the long-term survival of planted forests is crucial, as trees take decades to mature and require consistent care. Poor site selection, lack of maintenance, and climate change can hinder the success of these projects.

An MIT Report revealed that while planting trees could reduce CO2 emissions in about 10 years, deforestation continues at a rapid pace. It also highlighted that from 2015 to 2020, around 10 million hectares of forest were lost each year, with only 4 million hectares being restored.

This is because land is often used for farming, livestock, and mining, making it expensive to plant trees. As a result, not enough trees were planted to significantly reduce CO2 emissions.

Choosing the right tree species is important. Planting non-native or fast-growing trees can harm local ecosystems and reduce biodiversity. To get the best environmental results, afforestation projects should use native species. They should also follow sustainable practices.

Despite these challenges, tree planting projects offer great opportunities:

• New technology like remote sensing and AI makes tracking carbon storage more accurate and transparent.
• Partnerships between governments, businesses, and local communities help expand and sustain afforestation efforts.
• Financial incentives support large-scale tree planting, balancing economic growth with environmental benefits.

To combat rising CO2 emissions, afforestation and reforestation both offer solutions. However, we need to carefully consider where and how to plant trees to make a real difference in reducing CO2 levels.

The United Nations Strategic Plan for Forests

The United Nations Strategic Plan for Forests 2017–2030 was agreed upon in January 2017 and adopted by the UN in April 2017. It sets out six Global Forest Goals and 26 targets to be achieved by 2030.

The plan aims to increase global forest area by 3%, adding 120 million hectares—over twice the size of France. It emphasizes the need for collective action within and outside the UN System to drive meaningful change and support sustainable forest management.

Calculating the Value of a Tree in Carbon Credits

The carbon sequestration capacity of a tree depends on factors such as species, age, growth conditions, and geographic location.

Accurately quantifying this capacity is essential for determining the corresponding carbon credits. Recent research has focused on developing methodologies to estimate CO₂ absorption by urban tree planting projects.

Scientists have also developed formulas to measure carbon absorption from urban greening projects. This shows that carbon credits are needed to support these initiatives for improved environmental results.

The Tree Carbon Calculator uses a formula that estimates the amount of carbon stored in a tree based on its diameter at breast height (DBH), species, and growth conditions. Here’s a simple technique snapshot for calculation.

Funding and Investment: Who Pays for Tree Planting?

Funding for tree planting initiatives comes from various sources, including government programs, private investments, non-governmental organizations, and carbon markets. The voluntary carbon market has seen substantial growth, driven by corporate commitments to sustainability.

• In 2021, the market was valued at $2 billion, with projections suggesting it could reach $100 billion by 2030 and $250 billion by 2050.

Companies are increasingly investing in reforestation projects to offset their emissions. For instance, in early 2025, Microsoft announced a significant deal to restore parts of the Brazilian Amazon and Atlantic forests by purchasing 3.5 million carbon credits over 25 years from Re.green, a Brazilian start-up. This initiative, valued at approximately $200 million, is part of Microsoft’s strategy to become carbon-negative by 2030.

• KNOW MORE: Microsoft Buys 3.5 Million Carbon Credits to Offset AI’s Soaring Emissions

Market Trends: The Demand for Carbon Credits from Tree Planting

The demand for carbon credits from tree planting is growing as more companies and governments focus on tackling climate change.

• Last year a study from Nature.com found that well-planned reforestation projects could remove up to ten times more carbon at a lower cost than previously thought.
• Projects costing less than $20 per ton of CO₂ are considered affordable, making them an attractive option for businesses looking to offset emissions.

However, not all forest carbon offsets are reliable. Research shows that many projects fail to deliver the promised carbon removal, raising concerns about credibility.

Tree planting has strong economic potential, but success depends on accurate carbon valuation, diverse funding, and a solid understanding of the market. Ensuring strict monitoring and verification is key to maintaining trust and maximizing both environmental and financial benefits.

Cost of Planting Trees for CO2 Removal

The same MIT study further revealed how much it costs to remove CO2 by planting trees, considering South America as a case study. They created a “supply curve” to show the cost of removing one ton of CO2 based on how many trees are planted.

This helps us figure out the best places to plant trees, how many we can plant, and the cost involved.

• Point A (South America): Lowest cost: $23 per ton. Plentiful rainfall, low tree planting, and land opportunity costs
• Point B (Amazon Forest, Para, Brazil): Cost: $30 per ton. Plentiful rainfall, but higher tree planting costs
• Point C (Amazon Forest, Mato Grosso, Brazil): Cost: $40 per ton. Higher land opportunity costs
• Point D (Brazilian Cerrado): Highest cost: $90 per ton. Lower forestation potential, higher land opportunity costs

• Key takeaway: Regional variations in forestation costs are significant, with costs rising as land opportunity and forestation potential decrease.

• READ MORE: Laconic Teams Up with Planet to Revolutionize Forest Carbon Insights for Smarter Carbon Credits Trading 

Practical Guide to Starting a Carbon Credit Tree Planting Project

Embarking on a carbon credit tree planting project involves careful planning, adherence to legal frameworks, and consideration of social and environmental impacts. This guide provides a comprehensive overview to assist in successfully initiating such a project.

Choosing the Right Location: Soil, Climate, and Biodiversity Considerations

Choosing the right site is key to a successful tree-planting project. The soil should be fertile and well-drained to support healthy growth. Climate factors like temperature and rainfall need to match the trees’ needs. Plus, choosing native species helps maintain biodiversity, keeping the ecosystem balanced and connected.

Selecting Tree Species for Maximum Carbon Sequestration

Choosing the right tree species is crucial for carbon storage. Fast-growing trees, like poplars and willows, absorb carbon quickly, while hardwoods, such as oaks and maples, store it longer. Additionally, selecting native species helps ensure resilience and sustainability. A diverse mix not only improves soil health but also supports wildlife habitats, making the ecosystem stronger.

Long-Term Maintenance and Monitoring of Tree Planting Projects

Keeping a tree planting project successful takes ongoing care and monitoring. Regular tasks like watering, mulching, pruning, and pest control keep trees healthy. Tracking growth and survival rates helps measure carbon storage. A strong monitoring plan ensures the project meets its goals and provides reliable data for verification.

Legal and Certification Framework for Tree-Based Carbon Credits

Navigating Through Carbon Credit Certification Processes

Getting certified for tree carbon credits requires recognition from the following standards. The Verified Carbon Standard (VCS) by Verra is the most widely used, providing frameworks for validation and verification. Verra’s VCS Program supports carbon reduction in Agriculture, Forestry, and Other Land Use (AFOLU), which includes:

• Afforestation, Reforestation, and Revegetation (ARR)
• Agricultural Land Management (ALM)
• Improved Forest Management (IFM)
• Reduced Emissions from Deforestation and Degradation (REDD)
• Avoided Conversion of Grasslands and Shrublands (ACoGS)
• Wetlands Restoration and Conservation (WRC)

Understanding International Standards and Compliance

The Role of Third-Party Verification in Carbon Credit Projects

Social and Environmental Impacts of Tree Planting Projects

Community Engagement and Local Benefits

Biodiversity and Ecosystem Advantages 

Afforestation helps capture carbon and improves biodiversity. New forests provide homes for animals and increase species variety. They also fix damaged ecosystems. Other benefits include cleaner water, better soils, and natural services like pollination and climate control. Focusing on healthy ecosystems boosts these benefits.

Addressing Potential Risks and Criticisms of Tree-Based Carbon Credits

Tree-based carbon credits face challenges. These include permanence, additionality, and social impacts. To store carbon long-term, we must protect forests from deforestation and disasters. Additionality means proving the project wouldn’t occur without carbon credit funding.

Therefore, social issues like displacement and unfair land use should be addressed to benefit the local communities. Notably, transparency and best practices help build trust and credibility.

Starting a carbon credit tree planting project needs careful planning concerning ecological, legal, and social factors. As these projects help combat climate change they follow specific guidelines and involve stakeholders. Additionally, they offer lasting benefits for the environment and local communities.

Future Outlook and Trends in Tree Planting for Carbon Credits

Technological Advancements in Monitoring Tree Growth and Carbon Sequestration

New technologies like satellite imagery and AI-powered tools are transforming how tree growth and carbon capture are tracked. These innovations improve accuracy, lower costs, and enhance transparency, making it easier to verify carbon credits.

For example: Planet Labs PBC a leading provider of global, daily satellite imagery and geospatial solutions announced that they have signed a multi-year, seven-figure deal with Laconic, a company leading a global shift in climate finance, empowering governments to monetize natural carbon assets through its Sovereign Carbon securitization platform.

In this deal, Laconic can use Planet’s 3-meter Forest Carbon Monitoring product and 30-meter Forest Carbon product for the next three years.

• READ DETAILS: Laconic Teams Up with Planet to Revolutionize Forest Carbon Insights for Smarter Carbon Credits Trading 

The Evolving Market: Predictions for Tree-Based Carbon Credits

As companies and governments push toward net-zero goals, demand for carbon credits is expected to rise. Tree-based credits will stay in demand due to their added ecological and social benefits. However, stricter regulations and increased scrutiny will require stronger verification standards.

• LATEST DEVELOPMENTS:

Companies like Microsoft and Meta are investing in forest carbon credits to reach their sustainability goals. Some recent developments include:

• Microsoft Signs Groundbreaking 7MT Carbon Credits Deal with U.S.-Based Chestnut Carbon
• Meta and WRI Unveiled AI-Powered Global Tree Canopy Map

The Role of Policy Changes in Shaping the Future of Carbon Credits

Government policies and international agreements will play a major role in shaping the future of tree-based carbon credits. Incentives like subsidies and tax breaks will encourage reforestation, while stricter regulations will ensure higher credibility in carbon credit markets.

Tree Planting for Carbon Credits: Key Takeaways & Conclusion 

Key Takeaways

• How It Works: Carbon credits offset emissions (1 ton CO₂ per credit); trees absorb CO₂, storing it in trunks, roots, and soil.
• Afforestation vs. Reforestation: Afforestation involves planting trees in non-forested areas, while reforestation restores lost forests; both generate carbon credits.
• Market & Investment: The voluntary carbon market was $2B in 2021 and is projected to reach $100B by 2030; Microsoft committed $200M for Amazon reforestation by 2025.
• Challenges & Opportunities: Challenges include deforestation risks, climate change, and verification issues, while opportunities lie in AI monitoring, corporate funding, and government incentives.
• Project Essentials: Success depends on site and tree selection, certification (e.g., Verified Carbon Standard), and ongoing maintenance.
• Future Trends: AI & satellites enhance tracking, stricter verification boosts trust, and corporate demand for high-quality carbon credits rises.

Conclusion

Tree planting for carbon credits offers a dual advantage: combating climate change and fostering environmental and social benefits. Adhering to certification standards, leveraging technological advancements, and engaging communities ensure project success and credibility.

As market demand grows and policies evolve, tree-based carbon credits will play a vital role in global decarbonization efforts. By addressing potential risks and embracing innovation, these projects can deliver impactful and lasting contributions to the planet’s future.

• FURTHER READING: How Carbon Credit Projects Contribute To Sustainability and Profitability

The post Planting Trees for Carbon Credits: Everything You Need to Know appeared first on Carbon Credits.

Sylvera, a carbon data company in London, has teamed up with BlueLayer, a digital infrastructure provider. Their groundbreaking partnership seeks to change the carbon credit market. The partnership brings the first live carbon project and inventory data set. This aims to improve transparency, efficiency, and market access.

The initiative seeks to close the gap between supply and demand. It will also direct billions to finance essential carbon credit projects.

Bridging the Gap Between Carbon Credit Buyers and Suppliers

Projections show that the carbon credit market will grow tremendously. By 2030, it could grow to $7–$35 billion, according to MSCI. Several factors are driving this expansion. 

Demand for carbon removal credits is rising. Many view them as more credible, even though they cost more. Companies with ambitious climate goals for 2030 will likely rely on carbon credits to offset emissions. Buyers now focus on high-quality credits. They prefer projects with strong standards and clear transparency.

Looking further ahead, MSCI projects the market could reach $45–$250 billion by 2050. This growth will be driven by urgent corporate demand, as many companies approach their net-zero deadlines. 

The market will also shift toward removal credits, which could make up two-thirds of its value. These trends highlight the increasing importance of carbon credits in global climate strategies.

However, carbon market have long been hindered by inefficiencies and lack of transparency. Buyers face challenges in finding high-quality credits that align with their sustainability goals. Project developers face slow processes when responding to buyer requests and getting funding. 

Sylvera and BlueLayer’s partnership tackles these problems. It streamlines data exchange and boosts market access for buyers and developers.

This partnership uses BlueLayer’s digital tools and Sylvera’s carbon ratings skills. Project developers can show their carbon projects to buyers. Buyers also get real-time access to inventory, pricing, and project details. This helps them make better procurement decisions.

This is all done in a standard format for verified buyers. Buyers get real-time data with Sylvera’s Connect to Supply solution. This tool helps them easily evaluate and buy quality carbon credits.

What are the Advantages for Project Developers?

This initiative helps project developers make money while keeping control of their data. By joining BlueLayer, developers connect with a large buyer network looking for quality credits. Some of the core benefits include:

• Increased Visibility: Developers can connect with a wide range of buyers, boosting carbon credit sales for both pipeline and issuing projects.
• Simplified Data Management: The platform lets developers manage carbon operations in one spot. This makes it easy to share data with potential buyers.
• Efficiency in Data Exchange: Using standardized templates and automation speeds up responses to buyer requests. This reduces manual work in sales and due diligence.
• Data Control: Developers choose what info to share, who to share it with, and when. This keeps their project data private and helps transactions go more smoothly.

How Do Buyers Benefit from It?

Buyers in the carbon credit market struggle to find reliable project information. But with Sylvera and BlueLayer’s partnership, they can now access real-time data. This includes key details from more than 200 developers. They focus on projects that reduce carbon through nature-based and engineering efforts.

The key advantages for buyers include:

• Real-Time Data Access: Live inventory, pricing, and project details let buyers decide quickly and wisely.
• Expanded Project Opportunities: Buyers can source credits from pre-issuance and issued projects. This gives them a wider range of investment options.
• Trusted Due Diligence: Sylvera’s carbon ratings and monitoring tools help buyers check project quality. This way, they can reduce risks before buying.

Unlocking Billions for Real Climate Action

The partnership aims to unlock more than $2 billion for carbon projects. Already, over 80 projects have been introduced to buyers. These projects cover a total demand of 4 million carbon credits.

The collaboration aims to boost market liquidity. It will also drive more investment in climate solutions and speed up progress toward global net-zero targets.

BlueLayer Co-founder and CEO Alexander Argyros provides exclusive insights on this significant market development, highlighting these key points:

Solving Industry Challenges with Innovation

Argyros pointed out that the carbon market has great potential. However, it is held back by slow, manual processes. Developers have a hard time reaching buyers. Buyers, in turn, don’t have the data they need to invest confidently.

In fact, verification delays could cost project developers up to $2.6 billion, per a report by Thallo. These delays may also prevent the deployment of 4.8 gigatonnes of carbon credits by 2030. This shortfall is equivalent to not offsetting the annual emissions of 37 million U.S. citizens by the end of the decade.

Argyros notably commented that:

“This partnership is providing much-needed digital infrastructure, powered by BlueLayer’s API, for both suppliers and buyers, creating a faster, more connected, and more efficient market. Together, we’re leading the way when it comes to data standardisation and technology inoperability, enabling a seamless exchange of information to match buyers with high-quality project developers able to meet their specific investment criteria.”

Driving Market Growth and Investment

With over $2 billion in potential capital mobilization, Argyros emphasized BlueLayer’s role in shaping the future of carbon credit trading. As the first end-to-end operating platform for project developers, BlueLayer provides the necessary tools to scale businesses, maximize revenues, and streamline certification.

The partnership with Sylvera boosts visibility by connecting developers to a large buyer network. This way, their high-quality projects get the investments they need to grow.

Ensuring Data Security and Transparency

Transparency and trust are critical to the success of carbon markets. According to Argyros, BlueLayer’s platform standardizes data while maintaining security and auditability through an end-to-end ledger system.

With this, developers keep full control of their information. This ensures data integrity and helps buyers make informed and confident decisions. 

Echoing Argyros points, Sylvera’s Co-founder and CEO Allister Furey noted:

“A successful global carbon market demands high-quality data to ensure that every credit traded reflects a real, measurable reduction in emissions. Partnering with Bluelayer enables us to remove barriers, simplify processes, and facilitate stronger connections between buyers and developers – on the foundation of end-to-end carbon data. It’s another big step in driving meaningful climate action and real progress as we continue to mature these markets.”

A New Era for Carbon Markets

The Sylvera-BlueLayer partnership sets a new standard for carbon market efficiency. It aims to speed up the shift to a clearer, larger, and better carbon credit market. A market that supports real climate action while making carbon trading more accessible and reliable for all stakeholders.

• READ MORE: Carbon Credits in 2024: What to Expect in 2025 and Beyond ($250B by 2050)

The post Sylvera and BlueLayer Launch World’s First Live Carbon Data to Unlock $2B Investment appeared first on Carbon Credits.

Xpansiv has launched a new data series for North America’s Renewable Energy Certificate (REC) markets. This product merges data from Xpansiv’s CBL spot exchange, Xpansiv Connect™ portfolio system, and OTC prices from Evolution Markets.

This combination offers a clearer view of the market. Users can track individual RECs in both spot and forward markets. They can access key details like RPS status, state, price type, vintage, and registry. This helps users better understand REC trends and market movements.

Source: Xpansiv

Why Renewable Energy Certificates (RECs) Matter in Clean Energy

Renewable Energy Certificates (RECs) track clean energy from sources like wind and solar. Since renewable electricity mixes with other sources on the grid, RECs help verify and claim renewable energy usage. Many businesses use International Renewable Energy Certificates (I-RECs) to meet their sustainability goals and offset carbon emissions.

Technically, “An I-REC is a tradable certificate representing the environmental attributes of one megawatt-hour (MWh) of renewable energy generation. They are recognized by the GHG Protocol, CDP, and RE100 for reporting Scope 2 emission.”

Xpansiv: Enhancing Market Insights with Reliable Data

Nathan Rockliff, Xpansiv’s Chief Strategy Officer, highlighted the importance of this launch. He noted,

“Xpansiv’s new consolidated REC data product harnesses our comprehensive market infrastructure to provide an unmatched, detailed view of the REC markets. This offering is the first of our enterprise-wide initiatives to enhance the utility, integrity, and coverage of environmental commodity data, accelerating the global energy transition and driving real impact.”

The platform offers daily insights into more than 120 REC types across seven ISOs. It includes executed trade data, firm orders from CBL, and indicative prices from Evolution Markets. Historical data dating back to 2019 adds depth and accuracy. With Xpansiv Connect, users can track both spot and forward REC instruments in real-time, improving market visibility.

CBL Overview

Record-Breaking REC Trading Volumes

This launch comes at a time of peak REC trading activity. In 2024, more than three million RECs were exchanged on CBL—an 18% jump from the previous year. January alone saw transactions exceed $27 million, setting a new record.

Xpansiv’s REC data is now available through its API, web platform, and third-party data partners, making it easier than ever for market participants to access critical insights.

• RECENT: Voluntary Carbon Market Growth: Nature-Based Credits Double Xpansiv CBL Trading Volume

EXCLUSIVE: 

The CarbonCredits team connected with Xpansiv to explore their REC data product in greater detail. An Xpansiv spokesperson provided valuable insights worth noting.

CC: What makes Xpansiv’s consolidated REC data product a game-changer for market participants?

Xpansiv: We designed the new consolidated data product to bring a new level of robustness and utility to REC data by combining spot and forward market data, with unique instrument identifier reference data. Integrated unique identifiers enable multi-sourced trade, order, and indicative spot and forward prices to be mapped to a single instrument.

With that improvement, RECs can be modeled precisely by spot/forward price, vintage, RPS, registry, and other attributes, which is difficult to do with legacy data formats.

CC: How is Xpansiv leveraging Evolution Markets’ spot and forward prices to enhance REC market insights?

Xpansiv: Spot and forward prices are essential inputs into a REC data series. Sourcing that data from recognized market leader- Evolution Markets ensures that the prices are the product of a rigorous assessment process over a broad range of RECs. Further ensures continuity for the new product’s five-year historical data series.

The new product includes Evolution Markets data as well as firm order and trade prices from the CBL spot exchange.

In 2024, CBL’s REC market traded a total of 3.15 million MWh, an 18% increase. The notional value traded was $158 million, a 41% jump.

Lastly, but importantly, the new data series is built using unique instrument identifiers from the Xpansiv Connect portfolio management system. Xpansiv Connect is integrated with 14 REC and carbon registries and has issued more than a billion instrument identifiers since launch.

The careful consolidation of those three diversified market and reference data sources is what makes the new data product so powerful and useful.

CC: Why are CBL REC trading volumes surging, and what does it mean for the future of renewable energy markets?

Xpansiv: CBL REC volumes are growing because the exchange and its post-trade Xpansiv Connect portfolio management system provide real credit, liquidity, and operational benefits to market participants.

Xpansiv’s CBL spot exchange provides direct access live, firm bids and offers, instant execution, and automated, T+0 settlement, through direct integrations with leading REC registries.

OTC market participants settle trades via the exchange for two primary reasons.

The first is trades can be settled between CBL participants without bilateral trading or credit counterparty agreements.

The second is, as with exchange-matched trades, CBL’s post-trade infrastructure provides automated settlement for OTC trades, speeding settlement cycles and reducing errors and failures.

CC: If the US REC market hits $40 billion by 2033, how will Xpansiv’s data innovation fit into this growth?

Xpansiv: The US REC markets, and, in fact, REC markets globally, are projected to grow sharply from both traditional sectors as well as significant demand to support the proliferation of new data centers being driven by the artificial intelligence boom.

High-integrity markets and reference data are integral parts of successful commodity and financial markets. Our institutional-grade infrastructure is built to enable environmental commodity markets to scale, which we think is essential to attain a timely energy transition.

The new consolidated REC data product is the first of our enterprise-wide initiatives to enhance the utility, integrity, and coverage of environmental commodity data, accelerating the global energy transition and driving real impact.

That goes for established REC and carbon markets, as well as nascent markets in sustainable aviation fuel, or SAF, energy, and recycled plastics, to name a few that we’re working on.

Xpansiv’s Role in the Energy Transition

Xpansiv operates a leading market infrastructure for environmental commodities, including carbon credits and RECs. It also manages registry systems for energy and environmental markets and oversees North America’s largest independent solar renewable energy credit trading platform.

Xpansiv provides advisory and transaction support in carbon, renewable energy, and energy transition markets through its Carbon Financial Services and Evolution Markets divisions. Xpansiv Connect™, its multi-asset environmental portfolio management system, further enhances data transparency, supporting the industry’s push for accountability in sustainability efforts.

Strong Investor Support

Xpansiv’s investor base includes Blackstone Group, Bank of America, Goldman Sachs, Aramco Ventures, Macquarie Group Ltd., S&P Global Ventures, Aware Super, BP Ventures, Commonwealth Bank, and the Australian Clean Energy Finance Corporation.

U.S. Renewable Energy Certificate Market Set to Hit $50 Billion by 2033

The U.S. Renewable Energy Certificate (REC) market is on track for major growth. According to S&P Global, REC generation is expected to rise from over 950 million MWh in 2024 to nearly 2.7 billion MWh by 2033.

Wind and solar will lead the way, with their combined share increasing from 81.7% to 92.5% over this period. The sharp rise in renewable energy output is the key driver behind market growth.

The U.S. REC market is projected to approach $40 billion by 2033 in the base case. However, in an optimistic scenario, it could reach nearly $50 billion—$10 billion higher than the base estimate.

Source: Xpansiv Launches Consolidated Renewable Energy Data Product, Setting a New Standard for REC Market and Reference Data – Xpansiv

• FURTHER READING: Xpansiv Joins Forces with S&P Global and CME to Supercharge Australia’s Carbon Credit Market

The post Xpansiv Boosts Transparency in North America’s Renewable Energy Certificate Market. EXCLUSIVE Interview Inside appeared first on Carbon Credits.

Chestnut Carbon, a nature-based carbon removal company, has raised $160 million in Series B financing. This funding will help expand its afforestation projects across the United States. 

Nature-Based Carbon Removal: A Booming Market

Nature-based carbon removal solutions are key to fighting climate change. Afforestation and reforestation play a big role in this effort. The global market for nature-based carbon credits could grow a lot soon. 

McKinsey reports that by 2030, demand for voluntary carbon credits may hit 1.5 to 2 gigatons each year. Nature-based solutions will likely play a big role in this growth.

Analysts estimate that the global carbon credit market could reach $100 billion by 2030 and $250 billion by 2050. Nature-based solutions could contribute a major share. 

As companies aim for net-zero targets, the need for verified carbon credits is growing. This trend highlights the role of Chestnut Carbon. The company commits to creating large, nature-based carbon removal projects.

Chestnut Carbon’s $160M Funding: A Game Changer

The $160 million funding round has existing investors, like Canada Pension Plan Investment Board. It also includes new investors, Cloverlay and DBL Partners. Additional support came from limited partners of Kimmeridge, Chestnut’s founding firm. These partners include university endowments, family offices, and institutional investors.

This funding will help Chestnut Carbon grow its Sustainable Restoration Project. The goal is to sequester 100 million metric tons of carbon over time.

Chestnut promotes biodiversity and supports ecosystem health by turning degraded farmland into forests. This work also makes a big difference in the VCM.

Chestnut’s Approach to Carbon Removal: Turning Land Into a Carbon Goldmine

Chestnut Carbon started in 2022 and focuses on afforestation. This means planting trees on unused farmland and pasture with the goal of capturing and storing carbon. The company distinguishes itself with these:

• Land Acquisition: Chestnut has acquired more than 35,000 acres in six U.S. states. These include Arkansas, Louisiana, Alabama, Mississippi, Oklahoma, and Texas.
• Gold Standard® Verified Carbon Credits: These credits meet strict quality and integrity standards. This makes them appealing to companies focused on sustainability.
• Chestnut uses special data tools and growth models. These help improve forest development and capture carbon effectively.
• Long-Term Sustainability: The company aims to create lasting, strong forests. These forests do more than store carbon. They also help restore soil, retain water, and protect biodiversity.

How the funding will be used

With the new $160 million, Chestnut Carbon will speed up its growth in three main areas:

1. Land Purchases: More land acquisitions will enable rapid expansion and project execution.
2. Technology Investment: Chestnut uses advanced data modeling and their own tech to track tree growth. This helps predict carbon sequestration rates and makes project development easier.
3. Talent Growth: The company will grow its team of experts in forestry, environmental science, carbon finance, and land management. This will help scale operations effectively.

Investors see Chestnut Carbon as a leader in the emerging nature-based carbon removal sector. Nancy Pfund, Founder and Managing Partner at DBL Partners, highlighted the promise of Chestnut’s model, saying:

“With our investment in Chestnut, we see the potential to raise the bar by helping to create the industry leader in providing high-quality carbon offsets at scale.”

Remarking on this massive fundraising, Ben Dell, CEO of Chestnut and Founder and Managing Partner of Kimmeridge noted:

“The Series B financing allows us to continue to build out our platform to meet the growing needs of sustainability-conscious organizations and advance our position as a leading provider in the international carbon markets.”

The Corporate Shift Toward Carbon Offsets

Chestnut Carbon is growing because more companies need high-quality carbon credits for their increasing corporate commitment to sustainability.

Companies in technology, manufacturing, and finance are investing in carbon offsets. They want to reduce their environmental impact and reach net-zero emissions.

In 2023, carbon pricing revenues hit a record $104 billion. This shows that more companies are using carbon credits for sustainability.

Microsoft leads the way by buying over 3.3 million tons of carbon removal credits. This is part of its goal to be carbon-negative by 2030. The tech giant recently signed a deal to buy 7 million carbon credits from Chestnut. 

• READ MORE: Microsoft Signs Groundbreaking 7MT Carbon Credits Deal with U.S.-Based Chestnut Carbon

Microsoft announced a big deal to help restore parts of the Brazilian Amazon and Atlantic forests. They will buy 3.5 million carbon credits from Re.green, a Brazilian start-up, over the next 25 years. This initiative seeks to reduce greenhouse gas emissions. These emissions are rising because AI and data centers need more energy.

Other major corporations are also making substantial investments in carbon credits. Delta Air Lines has bought millions of carbon credits. This helps offset its emissions. It shows the airline industry’s commitment to sustainability.

Also, companies like Alphabet (Google’s parent) and Disney are big buyers of carbon credits. Shell topped the list, followed by Microsoft last year. 

• RELATED: Shell and Microsoft Are The Biggest Carbon Credit Buyers in 2024: What Projects Do They Support?

In 2024, the voluntary carbon market was very active. Corporations used credits valued at $1.4 billion. This is just below 2022’s peak of $1.7 billion. It shows that companies are still committed to carbon-offsetting efforts.

These investments help companies reach their sustainability goals. They also aid global efforts against climate change. By backing projects that cut greenhouse gas emissions, corporations are key players in moving toward a sustainable future.

The Challenges Ahead—Can Chestnut Fix It?

Big afforestation efforts could help. However, challenges still exist in expanding nature-based carbon removal solutions, including:

• Land Availability: Securing large tracts of suitable land remains a key hurdle.
• Verification Delays: The carbon market often has slow verification processes. This can delay credit issuance and affect project financing.
• Market Maturity: The voluntary carbon market is still growing. It needs clearer standards and stronger buyer trust in credit quality.

Chestnut focuses on careful checks, quality credits, and sustainable practices. This helps them face challenges effectively. This approach sets a standard for future nature-based carbon removal projects.

Chestnut Carbon’s $160 million fundraising is a big milestone for the voluntary carbon credit market. As companies aim for net-zero goals, they will need more trusted, high-quality carbon credits. Chestnut’s approach sets a new standard in the carbon market, opening doors for large, sustainable solutions to remove emissions. 

• FURTHER READING: Carbon Credits in 2024: What to Expect in 2025 and Beyond ($250B by 2050)

The post Chestnut Carbon Lands $160M to Supercharge Nature-Based Carbon Credit Market appeared first on Carbon Credits.