Finance & Investment

First US Nature-Based Carbon Credit Auction Coming in 2025

The American Forest Foundation Carbon Auction will offer companies a transparent and streamlined way to secure high-quality carbon credits while supporting rural communities and family forest owners.

Published 1 month ago | About a 4 minute read

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This week, the American Forest Foundation (AFF) announced it will hold the first auction for carbon credits for its Family Forest Carbon Program (FFCP) in February 2025.

The American Forest Foundation Carbon Auction — the first of its kind for a US nature-based carbon project — will offer buyers a transparent and streamlined way to secure high-quality carbon credits while supporting rural communities and family forest owners.

More companies than ever are working to curtail their climate-changing emissions, but there remains an urgent gap in the upfront capital needed to deploy high-quality carbon projects to help meet climate-mitigation targets and keep global temperature rise within 1.5°C. Globally, only 1.2 percent of the annual potential of nature-based solutions has been unlocked by the voluntary carbon market (VCM). If this underinvestment continues, we risk not financing enough projects to produce a sufficient supply of high-quality credits to reach our collective climate goals. Upfront payment addresses that gap.

The AFF’s Carbon Auction will help scale financing and deployment of nature-based solutions through a transparent, cost-efficient approach — companies will be able to access all due diligence resources in one central place over several weeks and then bid on credits during a one-week period in February. This approach will also give the Family Forest Carbon Program the upfront funding it needs to deliver measurable carbon impacts and high-quality ecological and community co-benefits.

“Family forest owners are ready to take necessary climate action, and time is of the essence for corporations to invest in nature-based solutions to meet ambitious climate goals,” said AFF CEO Rita Hite. “This auction will be a game-changing opportunity for buyers to secure premium carbon credits while supporting family forest owners and rural communities.”

Tim Stout, a Vermont landowner enrolled in the Family Forest Carbon Program, stands in the woods he proudly stewards. | Image credit: American Forest Foundation

AFF says the Carbon Auction will reshape the VCM by:

closing the climate financing gap — Corporations often seek to buy carbon credits at lower prices and pay upon delivery, yet developers need upfront capital to kickstart their work. The auction will bridge the divide by offering hybrid commercial terms where buyers will provide a partial upfront payment to catalyze the project with the remainder to be paid upon delivery.
streamlining the due diligence process — The auction format will address the transactional frictions buyers and developers commonly face when transacting carbon credits — such as the protracted process of discovery, the need to manage multiple sources of due diligence data and the lack of insight into market prices. Through this auction, buyers will have access to the due diligence resources in one central place and the ability to see anonymous competing bids.
linking payments to impact — Companies will prepay through down payments directly tied to project milestones achieved — including landowners and acres enrolled, and verification milestones. This method of down payments will allow companies to tie their upfront investment to measurable impact for communities and the planet.
incentivizing early investment — Companies benefit from significant discounts on credits when they prepay. This helps ensure buyers get carbon credits at a competitive price, protecting against future price increases while safeguarding long-term decarbonization strategies and lowering overall costs.

By providing a share of resources upfront, buyers will be able to ensure that the Family Forest Carbon Program, developed by AFF and The Nature Conservancy, has the funding required to implement next-generation approaches to credit quality, resulting in credits that are highly additional and that also deliver significant co-benefits.

“The FFCP is a core element of my urgent goal to preserve our forests and mitigate climate change, so my grandchildren (and their generation) can enjoy this farm and the rest of Vermont the way that our family has enjoyed them over the last 80 years,” said Tim Stout, principal of Northam Forest Carbon and a Vermont landowner enrolled in the Family Forest Carbon Program. “I want this farm to be a land of hope. Look at what small landowners can do to actively participate in climate action and build resilient forests! It's astounding how much we, as landowners, can do with the right support.”

“This groundbreaking auction will redefine how corporations invest in nature-based solutions to address the threats of climate change and biodiversity loss,” said Kevin Maddaford, director of US and Canada Carbon Markets at The Nature Conservancy. “It will also advance carbon market access for US family forests owners and support the health of woodlands.”

Interested parties can find additional details and register on the American Forest Foundation Carbon Auction website.