American Forest Foundation to Launch First U.S. Nature-Based Carbon Credit Auction in Early 2025

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Oct 15, 2024, 09:00 ET

New Approach for Carbon Buyers to Secure High-Quality Credits and Support Family Forests

WASHINGTON, Oct. 15, 2024 /PRNewswire/ -- The American Forest Foundation (AFF) will hold the first auction for the Family Forest Carbon Program's carbon credits in February 2025. The American Forest Foundation Carbon Auction — the first of its kind for a U.S. 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.

Tim Stout, a Family Forest Carbon Program enrolled landowner from Vermont, stands in the woods he stewards.

More companies than ever are working toward net-zero goals, 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% of the annual potential of nature-based solutions has been unlocked by the voluntary carbon market (VCM). Under this status quo, 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 American Forest Foundation Carbon Auction will help scale financing and deployment of nature-based solutions through a transparent and cost-efficient approach where 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 time 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 Rita Hite, CEO of the American Forest Foundation. "This auction will be a game-changing opportunity for carbon buyers to secure premium carbon credits while supporting family forest owners and rural communities."

How the American Forest Foundation Carbon Auction will reshape the VCM:

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.

"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 U.S. and Canada Carbon Markets at The Nature Conservancy. "It will also advance carbon market access for U.S. family forest owners and support the health of woodlands."

Interested parties can find additional details on the American Forest Foundation Carbon Auction website. Early registrants can attend introductory webinars and take advantage of the user-friendly system designed to streamline transactions and minimize time spent evaluating opportunities. The auction will be conducted on the Prosfora platform, which is built on Lydion Vault technology that facilitates the secure packaging, exchange and productization of data assets.

For more information and to register, visit the American Forest Foundation Carbon Auction website.

About the American Forest Foundation

The American Forest Foundation is a national conservation organization that empowers family forest owners to make a meaningful conservation impact. The organization's flagship program, the Family Forest Carbon Program, helps landowners implement forest management practices to protect the health of their woodlands and help the planet. To learn more about the American Forest Foundation and the Family Forest Carbon Program, visit forestfoundation.org/carbon.

SOURCE American Forest Foundation