Dealflow | November 4, 2022

ImpactAlpha Deal Spotlight: Nature-based solutions

Roodgally Senatus
ImpactAlpha Editor

Roodgally Senatus

ImpactAlpha, November 4 — Demand is surging for high-quality nature-based carbon offsets, and developers are scrambling to supply them. Houston-based ZeroSix, formed by a group of oil and gas veterans, is developing carbon credits backed by shuttered oil and gas wells.

Wall Street is also getting in on the action. This week, T. Rowe Price subsidiary Oak Hill Advisors led a $1.8 billion acquisition of 1.7 million acres of forest. Oak Hill, along with its partner Anew Climate, plan to generate less than 20% of revenues from timber harvesting, down from more than 80% under the previous owner.

Anew says the firm has become one the 10 largest timberland owners in the U.S. – and the only one focused on forest carbon markets. 

Blue carbon

Mangroves are even more effective than forests as carbon sinks, with the ability to store up to 10 times the carbon of terrestrial forests (see, “Conservation of mangrove forests could get a boost from carbon credits).

This week, Respira International and Climate Impact X, sold about 250,000 metric tons of carbon credits from the Delta Blue Carbon Project in Pakistan, one of the world’s largest mangrove restoration projects, at $27.80 per ton. Over its lifetime, the project is expected to sequester around 142 million tons of carbon.