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

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By illuminem briefings

· 2 min read


illuminem summarises for you the essential news of the day. Read the full piece on ESG Today or enjoy below:

🗞️ 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

Click for more news covering the latest on sustainable finance

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