UK supermajor BP has acquired a majority stake in US-based forest carbon offset developer Finite Carbon in a deal that the companies say will help extend access to carbon offset markets to small landholders.
The move builds on a $5 million investment in the company that BP made last October and brings Finite Carbon under the wing of BP Launchpad, the operator’s business accelerator programme.
Finite Carbon’s business involves identifying and developing projects that allow landowners to generate revenue by protecting forests rather than harvesting them for timber.
The resulting carbon storage generates carbon offsets which can be verified and traded on markets — an attractive proposition for oil and gas companies such as BP that have set out ambitious CO2 emissions-reduction goals.
While Finite Carbon has to date worked mostly with larger landowners such as land trusts, timber management companies and Native American tribes, company president Sean Carney said the additional investment will help “digitise the process” of verifying compliance, making it easier to set aside smaller plots of forest as carbon sinks.
BP’s investment has helped the company hire more foresters and develop tools to use satellite imagery to monitor forests.
Current low timber prices have helped renew landowner interest in forest preservation, Carney told Upstream.
David Eyton, BP’s executive vice president of innovation and engineering, said in a release: “Finite Carbon has the potential to build a global platform for managing and financing natural climate solutions. Deepening our partnership will allow them to accelerate their development and expansion.”
Finite Carbon currently has some 50 carbon projects covering 3 million acres in the US that the company said have generated more than $500 million in revenue for landowners.
BP said its increased investment will help Finite Carbon deliver a further $1 billion to landowners by 2030.
The company is rolling out a new web-based platform that it claimed enables millions of landowners “to get a real-time value assessment of how much income their forestland could generate in the voluntary carbon market”, which has traditionally been off-limits to many due to high transaction, monitoring and reporting costs.
Carney said encouraging smaller landowners in the US and other countries to participate in offset market will boost decarbonisation by creating “lots of small actions at a global scale”.
BP said its “global footprint” will enable Finite Carbon to expand its operations internationally and that access to BP’s technology infrastructure will help it “scale up the voluntary carbon market, while also supporting efforts to restore, maintain, and enhance biodiversity”.
Much of the carbon offset market in the US to date has been centred on Califirnia, the only US state so far to implement a cap-and-trade scheme for offsets.