Carbon transaction signals new revenue source for forest landowners

Ecotrust Forest Management struck a deal this week to sell forest carbon credits generated by forest land on the Olympic Peninsula to a private equity fund.

The transaction provides a model for the kind of deal that may become more common for forest land owners if federal regulations create a market for carbon.

Ecotrust Forest Management, the for-profit subsidiary of Portland-based Ecotrust, made the deal with Equator LLC of New York and New Forests Inc. of Sydney, international investment and asset management firms that jointly manage the Eco Products Fund, a private equity fund. Structured under the Climate Action Reserve’s new Forest Project Protocol, the deal guarantees that the carbon credits — expected to be in the hundreds of thousands over the next 100 years — generated by Ecotrust’s 3,276-acre Sooes property on the Olympic Peninsula will be purchased by Eco Products.

“We grow amazing trees in the Pacific Northwest and they’re tremendously carbon-rich,” said Bettina von Hagen, CEO of Ecotrust Forest Management. “We’re in a time when the forest products industry is at an all-time low. These carbon offsets offer another alternative.”

Research firm Ecosystems Marketplace reports that the average price per metric ton of carbon dioxide equivalent — the standard form of measurement for offsets — in the voluntary forest carbon market was about $10 in 2009.

Von Hagen said that the terms of the transaction prevent her from revealing the price per ton paid by Eco Products, but did say the deal was in the six-figure realm.

“Monetizing a sale in the six figures is of great importance to companies and to land owners,” von Hagen said.

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