Recent forestland acquisition includes CCO transfer, demonstrating maturing forest carbon offset market.
This month, The Nature Conservancy acquired 100,000 acres of Kentucky and Tennessee forestland owned by Corrigan TLP, LLP and managed by Molpus Woodlands Group, LLC. The property is home to the Ataya improved forest management project, which is registered with California ARB. In addition to being an excellent conservation story, the transaction itself demonstrates the importance of carbon offsets and revenue streams in land transactions.
Since the inception of forest carbon offset markets, there has been some uncertainty surrounding just how forest carbon projects might affect forestland sales, with some arguing carbon projects would be seen as an encumbrance which could constrain future forestry buyers. This latest transaction not only included the transfer of a forest carbon offset project, but it included the acquisition of 2 million carbon offsets, as well. This is a clear demonstration that carbon offsets, and projected carbon revenue streams, are conveyable assets. TNC plans to manage the property as a working, sustainable forest. To us, that says TNC considers carbon offsets to be a forest product, alongside harvest revenues, hunting leases, and other revenue sources typically associated with forestland. We believe that is the right approach. The continued development of forest carbon offset projects on forestlands owned by equity investors and the subsequent transfer of these properties, indicates that carbon projects are seen as an attractive attribute, not an encumbrance, a clear signal that carbon offset markets are maturing.