Climate Trust Capital, an independent firm of the mission-driven nonprofit The Climate Trust, has launched a first-of-its-kind investment fund to commit $5.5 million into innovative, U.S.-based carbon offset projects in forestry, grassland conservation, and livestock digesters. Fund I will be the first in a series of Climate Trust Capital-led investment funds built to appeal to institutional and impact investors. Our active involvement with projects accelerates deeper greenhouse gas reductions and helps to create healthy yields of credits and fruitful revenues from their sale.
Climate Trust Capital is assembling additional impact investment dollars into the carbon fund. We provide upfront finance based on the ten-year value of carbon credits from your project. The upfront investment can be used as a substitute for equity to finance project costs like construction, development or land acquisition. This is a guaranteed minimum carbon value for you!
When credits are generated, we will sell those on your behalf at the highest possible premium—capitalizing on our buyer network—and share the proceeds after recouping our initial upfront payment. This arrangement is in place for 10 years, and in the 11th year, 100% of credit proceeds go to you. This revenue share rewards project owners as carbon prices increase over time.
Climate Trust Capital also provides the appropriate level of technical support to ensure optimal project performance. This includes developing a carbon-monitoring plan for data collection, data aggregation, and verification.
We Invest in You
We take our returns last. Climate Trust Capital is in a unique position to value carbon credits over the long-term. We offer up to 50% of carbon credit value upfront and make our returns on a longer timeline via a revenue share over the 10-year term.
In order for Climate Trust Capital to consider your project, you must first submit an application for conservation finance. Be prepared to describe your project so we can understand its eligibility and quantify its emission reductions. Our timeline is dependent upon factors such as project owner turnaround that may accelerate or slow the process, however a typical cycle is approximately nine months.
Climate Trust Capital works to accelerate project implementation, and develop financing solutions for forestry, grassland conservation, and livestock digester projects. At this time, we are seeking project proposals from experienced project owners and developers in the following domestic offset sectors: Improved Forest Management (IFM), Avoided Conversion forestry (AC), Avoided Conversion of Grasslands (ACoGS), and Livestock Manure Digesters. Apply for conservation finance.
Our current minimum credit volume for projects over a ten-year period is 100,000 tons for forestry, 75,000 tons for livestock digesters, and 50,000 tons for grasslands conservation. Climate Trust Capital will conduct an analysis to confirm the projected credit delivery volumes.
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Livestock digesters have the unique potential to rapidly scale-up climate solutions. Digester projects offer a host of beneficial revenue streams, from improving the economic and environmental performance of dairies, to clean energy, organic fertilizer, and diverting waste from landfills. Furthermore, there is a growing demand for livestock digester carbon offsets in compliance and voluntary carbon markets. We consider projects that operate under California Air Resources Board’s Livestock Projects Protocol, and may consider projects on a case by case basis that operate under CAR’s U.S. Livestock Project Protocol Version 4.0.
Implementation of sustainable land management practices has the potential to increase stored carbon, provide habitat for a rich diversity of flora and fauna, and enhance recreational opportunities in local communities. The Trust’s forestry team finances U.S. forestry projects that have the potential to increase carbon sequestration working with land trusts, private owners and timber management companies. Encouragingly, forestry projects recently became the largest source of offsets for California’s cap-and-trade program. We primarily consider projects that operate under the California Compliance Offset Protocol U.S. Forest Projects; and may consider projects on a case by case basis that operate under ACR’s Improved Forest Management for Non-Federal U.S. Forestlands Protocol, ACR’s Improved Forest Management for U.S. Timberlands Protocol, CAR’s Forest Project Protocol, and VCR’s Methodology for Improved Forest Management: Conversion from Logged to Protected Forest Version 1.2.
Learn more in our FAQ: Forest Carbon Projects.
Over the past decade several economic and policy driven factors have led to the increased cultivation of corn and soybeans in the United States. To a large extent, this has resulted in the conversion of intact grasslands into land used for commodity crop production. Increased crop production leads to increased tilling, which has adverse environmental impacts through higher rates of soil erosion, decreased water quality, and the loss of below ground carbon. In order to address this issue and help reduce the pressure to convert grasslands into croplands, new protocols have been developed for quantifying the greenhouse gas benefits gained through the avoided conversion of grass and shrublands. We consider projects developed under both methodologies—CAR’s Grassland Project Protocol Version 1.0, and ACR’s Avoided Conversion of Grasslands and Shrublands to Crop Production.
We are committed to preventing a disastrous rise in global temperatures by funding quality projects that accelerate the pace of carbon mitigation. To expedite the pace of project development, we have found that early-stage finance is critical—offering greater potential for impact and supporting a vital stage of project development.
For almost two decades, The Trust has played an integral role in climate finance. Under the mandate of the Oregon Carbon Dioxide Standard, The Trust has been responsible for acquiring carbon offsets, and selecting and managing pollution reduction projects on behalf of regulated utilities.
Since its inception, The Trust has committed $34 million to projects that will reduce 5.5 million tons of carbon dioxide across a broad array of sectors. We expect to deploy $5.5 million to projects in 2017, with an additional $5.5 million+ over the next two years.
With our years experience investing in projects, The Trust is well-positioned as an investor and carbon manager. Our success is based on our technical proficiency with offset protocols and emerging carbon market policies, as well as our track record commercializing carbon credits in both the voluntary and compliance markets.
The Climate Trust and Climate Trust Capital leverage four distinct traits in executing our upfront funding model; traits that deliver for our partners.
A deep technical and sectoral knowledge: Our experienced team will guide investments into qualified earlier stage projects for higher impact.
Active management: Our team takes an active role in supporting early-stage projects to ensure the expected yield of credits, with particular focus to steward the project through to the monitoring, reporting, verification and sale of credits.
Reputation for integrity: The Trust’s reputation for environmental integrity and innovation has made it a trusted partner to buyers in both the compliance and voluntary carbon market.
Preferred Supplier: The Trust has successfully commercialized close to $10 million in offsets with a diverse number of voluntary and compliance buyers. We have earned a preferred-status relationship with several companies allowing us to easily transact the offsets in our portfolio.
By using The Trust’s existing programs to mitigate the policy and market risks associated with emerging environmental markets, Climate Trust Capital’s investment fund will demonstrate how limited, but precious, public support can be used to mitigate risks in order to leverage the investment of private capital at scale.
Because investments are repaid through credits that represent a verified reduction in greenhouse gas emissions, Fund I will tie financial performance directly to verified environmental performance. Not only will this create a new source of capital for conservation projects, we believe that making environmental credits a financeable asset class can result in paradigm shifts to help restore and protect our planet.
Invest with Purpose
“Our financing of community-based dairy biogas projects in the Pacific Northwest has been strengthened by The Climate Trust over a number of years. The Trust encourages innovation as a means to reach our joint goals, particularly to create new revenue streams that support local family-scale dairy farms and economic development.”
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