Climate Impact Partners Signs 1M “Staggered Spot” ARR Agreement with GreenTrees
Climate Impact Partners has inked a deal for one million ARR credits from US-based GreenTrees on behalf of a Fortune Global 500 company, the businesses told OPIS this week.
The deal will deliver a combination of issued credits from GreenTrees’ Mississippi Alluvial Valley Reforestation Project along with a portion of credits it will receive from its next verification, according to a news release seen by OPIS.
While several OPIS sources have noted a shift in buyer behavior from spot purchases to forward deals with new projects in recent years, there are still those that want to prioritize delivery, Climate Impact Partners CEO Sheri Hickok said.
“We have clients that say, ‘I only will take issued tons because I’ve been burned so many times,'” Hickok said. “We have other clients that say, ‘We’re going to invest up front, and we’ll give some flexibility on timing.’ So they structure it in a way that enables some flexibility around delivery versus just a hard commitment. You have the full bandwidth.”
With this agreement, CIP has brokered purchases for nearly 2.5 million credits from the project since 2020, Hickok said.
The businesses declined to discuss the financial terms of the agreement. OPIS assessed its ARR vintage 2022 Tier 1 range, which represents credit volumes of more than 100,000 metric tons, at $12.15/mt to $44.20/mt on Tuesday.
GreenTrees’ project is composed of over 140,000 acres in the Mississippi River valley held by over 600 landowners who have opted into the reforestation project. Roughly 7,000 acres have been replanted to date, according to a GreenTrees spokesperson.
The purchase will help the project continue to pay landowners to reforest and enroll more acreage, said Chandler Van Voorhis, manager of ACRE Investments, which developed the GreenTrees project.
“We have one landowner who is putting their grandkids through school, in part, using carbon dollars,” Van Voorhis said. “These transactions, while they’re great from an industry standpoint, the impact that they’re having in the lives and the landscape that we operate in is enormous. It gives us the running room to do more, and it builds confidence. Landowners have wondered, ‘Is this market really there? Am I going to get paid if I make this transition?’ A transaction of this size is going to have massive impact when they get word of it.”
The project has issued just under 7.8 million credits since 2010, of which 4.4 million have been retired, ACR registry records showed. Registered under the ACR Afforestation and Reforestation of Degraded Land methodology, it is one of the few ARR projects that hold a Core Carbon Principles Label from the Integrity Council for the Voluntary Carbon Market.
It also has earned a BBB rating from MSCI, Van Voorhis said.
These factors, along with the Science Based Targets initiative’s signal last year that it would accept a share of nature-based removal credits to account for residual emissions, have provided signals to CIP and ARR buyers, Hickok said.
“Ratings are informative to us, but they don’t make our decisions for us,” Hickok said. “We do due diligence on every project we work with to form our own opinion. We actually fail 25% of projects that are BBB rated.”
SBTi’s forthcoming guidance on the use of carbon credits and its Corporate Net Zero Standard update remain in draft form. It plans to finalize the former by the end of next year, the organization said in May.
“I still have high hopes that we’ll see something ahead of 2027 that gives a stronger indication of the framework update,” Hickok said. “Do we want to see that sooner than later? Absolutely. Are we waiting for that? No. And I don’t think all corporates are waiting either. This agreement that we’re talking about today, these million tons over 18 months, essentially is a signal of that corporates are confident in their climate goals and are moving forward regardless.”
–Reporting by Henry Kronk, hkronk@opisnet.com; Editing by Jeremy Rakes, jrakes@opisnet.com