JPMorgan, Microsoft back new financing model to scale nature-based carbon removal projects

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🗞️ Driving the news: Chestnut Carbon has secured a landmark $210 million credit facility, led by JPMorgan and backed by a 25-year carbon removal offtake agreement with Microsoft
• This marks the first project finance structure applied to a voluntary afforestation carbon removal project in the U.S., representing a significant advancement in scaling nature-based climate solutions using mainstream financial tools

🔭 The context: Nature-based carbon removal—particularly afforestation—has long struggled to access infrastructure-scale financing due to perceived risks and lack of standardised revenue models
• Chestnut, founded by Kimmeridge in 2022, acquires degraded agricultural land in the U.S. South and restores it with native forests to generate long-term, high-integrity carbon credits
• Earlier this year, Microsoft signed the largest voluntary U.S. conservation forestry offtake to date, committing to over 7 million tons of carbon credits from Chestnut's forests

🌍 Why it matters for the planet: Nature-based solutions can play a critical role in global decarbonization and biodiversity restoration but remain underfunded
• By adapting traditional infrastructure finance to the carbon markets, this model opens the door to more scalable and cost-efficient investment in carbon removal
• The initiative could accelerate afforestation on marginal lands, supporting both climate and ecological goals, while setting a precedent for future carbon credit-backed financing

⏭️ What's next: Chestnut plans to use the facility to rapidly expand its afforestation footprint, targeting over 100,000 acres by 2030 and removing 100 million tonnes of CO₂
• The replicable model—developed in collaboration with advisors like ERM and Marsh—may catalyze similar deals across the sector
• For Microsoft, the credits will contribute to its goal of becoming carbon negative by 2030
• Financial institutions are expected to monitor this deal closely as a benchmark for funding future nature-based removal projects

💬 One quote: “This transaction marks a meaningful step forward in demonstrating how nature-based carbon removal can scale through structured, high-integrity financing.” – Brian Marrs, Senior Director of Energy & Carbon Removal, Microsoft

📈 One stat: Chestnut’s 25-year offtake deal with Microsoft covers more than 7 million tons of carbon credits—the largest voluntary corporate investment in conservation forestry in U.S. history

See on illuminem's Data Hub™ the sustainability performance of Microsoft, JPMorgan, and their peers Stripe, Salesforce, and Google

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