LONDON, July 27 (Reuters) - Trading house Hartree Partners
has joined with a company reducing deforestation to help it
build up a portfolio capable of generating 20 million voluntary
carbon credits a year.
Nature-based carbon offsets can be generated through schemes
such as planting trees, agricultural projects or protecting
forests that would otherwise be destroyed.
Hartree said its investment with project developer Wildlife
Works will help to develop more than 20 projects which will
reduce emissions from deforestation by around 20 million tonnes
of carbon dioxide each year and 600 million tonnes over the
30-year life of the projects.
No financial details of the deal were disclosed.
Carbon credits from the projects, in Asia, Africa and Latin
America, would be verified using established standards such as
the Voluntary Carbon Standard and the Climate, Community and
Biodiversity standard, with issuance expected from 2023.
The trading house has already had discussions with potential
buyers who are large corporations or financial institutions,
Ariel Perez, Partner at Hartree Partners told Reuters.
Currently nature-based carbon offsets can trade around $5 a
tonne but Perez said as demand rises he expects the credits from
the portfolio could fetch from $9 to $30 a tonne, depending on
the varying costs of paying landowners not to cut down trees.
"As inflation continues to increase and as the world runs
out of existing carbon budget we think there is going to be
upwards pressure on the price," he said.
A private sector task force on scaling up the voluntary
carbon market said earlier this year the market will need to
grow 15-fold to meet goals set under the Paris climate agreement
and could be worth $5-$50 billion by 2030.
Many global companies such as oil major Shell have
pledged to reach net zero emissions, and said they will seek to
use some nature-based offsets, to help compensate for emission
reductions they are unable to cut from their operations.
(Reporting By Susanna Twidale; editing by David Evans)
