Deal boosts carbon credit market visibility

MADISON, Wis. -- The visibility of the forest carbon credit business received a big boost in December with the purchase by international energy giant BP PLC of majority control of Finite Carbon, the largest player in the U.S. forest carbon credit market.

Finite Carbon pays forest landowners to increase the capacity of their forest land to absorb carbon via planting, increased growth, and avoided conversion of the land to other uses. Finite Carbon has 50 active projects on 3 million acres of U.S. forest land, but is seeking the ability to expand given the demand for carbon credits by companies that emit large amounts of CO2.

“Putting a price on carbon can make it possible for anyone with the ability to protect, plant, or improve forests to generate revenue from their efforts,” said Sean Carney, Finite Carbon’s CEO. “ However, there is currently limited infrastructure to quantify, monitor, and verify these actions at scale. Thanks to this unique partnership with BP, Finite Carbon now has the resources of a global energy company behind it to help address this enormous environmental challenge and help small landowners access this market.” Carney will remain as CEO following the transaction.

BP relationship with Finite Carbon began with a $5 million investment last year. BP is a huge buyer of carbon credits, and also trades them through a business unit BP Target Neutral.

Finite Carbon has largely purchased carbon credits from large landowners to date.

But it recently announced a new effort to connect efficiently with smaller landowners.

“CORE CarbonSM is the first web-based platform designed to enable small landowners to access the carbon offset market. The technology removes barriers, including high transaction monitoring and reporting costs, which prevent small landowners from accessing the carbon market and instead enable them to generate new annual income through long-term commitments to good land stewardship,” according to the company’s website.

“With our free digital platform, landowners will be able to receive payments for sustainable management that removes carbon dioxide from our atmosphere. By leveraging mapping technologies and our user-friendly online enrollment process, small landowners, families, and land trusts are now able to enroll all or a portion of their land holdings to receive carbon offset revenue.”

A similar program to enable small forest landowners to sell carbon credits is being tested by the American Forests Foundation and The Nature Conservancy in Pennsylvania and Vermont.

Carbon credits averaged about $20 per ton in 2020, increased from $16 per ton in 2018.