Intercontinental Exchange (ICE) plans to auction 500,000 nature-based carbon credits for GreenTrees.
ICE is a leading global provider of data, technology, and market infrastructure. It operates large exchanges such as the New York Stock Exchange and clearing houses that help people invest and manage risk across asset classes.
GreenTrees tops the list of reforestation program operators in the United States by credit issuance. It’s wholly owned by ACRE Investment Management LLC.
ICE Nature-Based Carbon Credits Trading
The deal with GreenTrees promotes ICE’s expertise in the space of carbon trading.
Last May, ICE created its first nature-based futures contract called NBS future. It trades under the contract code NBT that delivers verified carbon unit (VCU) credits.
ICE NBT futures have several certifications. These include Verra VCS Agriculture, and Forestry and Other Land Use (AFOLU) Projects. It also has certifications from the Climate Community and Biodiversity (CCB) Standard.
- An entity can generate NBS carbon credits via different schemes like planting trees or protecting forests.
ICE has a 10-year history in doing carbon auctions. In fact, it has conducted carbon allowance auctions on behalf of the UK Government since 2012.
ICE has operated environmental markets for about 20 years, offering customers access to the largest markets in the world.
Over this period, ICE traded:
- 100+ billion tons of carbon allowances,
- 250+ million renewable energy certificates, and
- about 3 billion carbon credits that’s equal to ~1.4 billion Renewable Identification Numbers.
Last year, ICE traded almost $1 trillion in the notional value of carbon allowances. This corresponds to more than half the estimated global annual energy emissions.
ICE’s Managing Director of Utility Markets Gordon Bennett commented that:
“Leveraging our long history in environmental markets and our global customer base… our goal for the carbon credit auctions is to bring price discovery and transparency to the primary market… This allows buyers to invest in high quality carbon credits from leading carbon credit project developers.”
One of those project developers that ICE refers to is the GreenTrees. And their deal allows ICE to host auctions of voluntary carbon market credits for the first time. It involves half a million sales from GreenTrees reforestation credits.
GreenTrees Reforestation Program
As per Manager and Co-Founder of GreenTrees, Chandler Van Voorhis,
“Forestation is nature’s technology for removing carbon and represents the most viable, scalable, cost-effective means for answering climate change now and in the future… GreenTrees is the only carbon removal project that is open to small, medium and large landowners, covering acres from as low as 7 acres, up to 3,500 acres.”
GreenTrees’ approach enables landowners to enjoy carbon income in the earlier years.
The design of its approach not only gets the forest up fast but also trains the slower-growing hardwoods to grow up and straight. This, in turn, produces more valuable timber that one day will deliver long-term asset value.
By partnering with GreenTrees to plant forests, measure the carbon they capture, and sell the credits, landowners get an extra revenue stream. It also gives landowners a way to protect their land while contributing to restoring a vital ecosystem that can fight climate change.
According to Van Voorhis, GreenTrees can now connect one of the largest global networks of companies to landowners with ICE hosting the auctions of their reforestation carbon credits.
Each auction will give 250,000 Emission Reduction Tons (ERTs) from GreenTrees’ reforestation projects. The American Carbon Registry (ACR) will issue those ERTs.
- Each ERT represents one metric tonne of CO2 removed from the atmosphere.
The trading powerhouse believes that firms will increasingly invest in emissions reductions and removals. And as demand rises for these assets, price risk management will also become more important.
ICE aims to host two carbon credit auctions for GreenTrees in the 4th quarter this year.