How Chestnut Carbon plants America's largest forest

Chestnut Carbon just raised $160M to plant America's largest forest

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Hey there! 👋
Skander here.

Offsets used to mean shaky math and forests that might not last. That era is over. Today, high-quality credits demand decades of permanence, rigorous monitoring, and financial structures that hold up under scrutiny.

Chestnut Carbon is trying to turn that chaos into infrastructure: own the acres, plant biodiverse native forests, measure like an asset, sell long-dated offtake to blue chips, and finance with non-recourse debt.

And they just raised $160M to plant America's largest forest, so time for a Climate Drift Breakdown.

🌊 Let’s dive in

PS: We just walked through all the deals of July in the community. Join us next time.

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Free readers get the basics: Our take, 1 sentence pitch, Description, Funding, Problem, Market, and Impact.
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Company Breakdown: Chestnut Carbon

Chestnut Carbon just raised $160M to plant America's largest forest

🌊 The Climate Drift Take

The carbon removal market is at an inflection point: growing corporate demand meets scaling quality concerns. Nature-based solutions promise the cheapest path to gigatonne removal, but permanence and additionality questions persist.

Chestnut's bet is clear: own the land, control the quality.

By acquiring marginal farmland outright and committing to 100+ year forest restoration, they want to build climate infrastructure, not just selling credits.
Their $210M project financing with JPMorgan proves the model is bankable and a first for US afforestation.

Latest comes a Microsoft backing for 7 million tons over 25 years, and $200M in project financing.

🌊 The Driftie Take:

"The carbon credit ecosystem is incredibly motivated to build finance-grade infrastructure that rebut any perceptions of it being shaky. Producing and buying low-quality credits isn’t in any organization's best interest. Standards for quality are improving, durable removal is scaling, and the market is maturing fast. Companies like Chestnut Carbon and other nature-based and engineered carbon removal suppliers (like Mast!) are proof of this momentum."

Brady Paron
Director, Carbon Market Partnerships
Mast Reforestation

🚀 1 Sentence Pitch

Chestnut buys marginal U.S. land, plants biodiverse native forests, verifies removals, and sells long-dated carbon removal to blue-chip buyers.

⚡ Company Description

TLDR: Founded in 2022 by energy PE firm Kimmeridge, Chestnut develops large-scale afforestation projects by purchasing degraded agricultural land and replanting native forests.

In 2022 energy-focused private equity firm Kimmeridge couldn't find quality carbon credits to buy, so it started Chestnut Carbon to become America's largest afforestation project developer.
The company acquires marginal crop and pastureland across the Southeast US and transforms it into biodiverse native forests. Unlike many carbon offset providers, Chestnut owns the land outright, over 35,000 acres across six states (Arkansas, Louisiana, Alabama, Mississippi, Oklahoma, Texas), ensuring long-term permanence.

The company has already planted 17 million trees and aims to restore 100,000+ acres by 2030.

💸 Funding Raised

TLDR: Equity 360M USD equivalent commitments since 2022 plus a 210M USD project finance facility in 2025.

Series B (February 2025): $160 million led by Canada Pension Plan Investment Board, with new investors Cloverlay and DBL Partners. Additional backing from university endowments, family offices, and other institutional investors via founding firm Kimmeridge.

Project Financing (July 2025): $210 million non-recourse credit facility led by JPMorgan, with CoBank, Bank of Montreal, and East West Bank—the first financing of its kind for a US voluntary carbon removal afforestation project. This facility is backed by Chestnut's 25-year Microsoft carbon removal agreement.

Initial Funding (2022): Up to $200 million commitment from Kimmeridge at founding, including the acquisition of Forest Carbon Works.

❓ Problem

TLDR: Corporate net-zero commitments create massive demand for high-quality carbon removal, but most credits lack permanence, additionality, or verifiable impact.

The voluntary carbon market faces a credibility crisis.

Carbon Offset Explained - Part 2

Despite corporate demand for carbon removal hitting record highs (95 million credits retired in H1 2025 alone) buyers increasingly reject low-quality offsets that lack additionality or permanence.

Nature-based solutions could deliver over a third of needed CO2 reductions by 2030, yet receive less than 3% of global climate funding. US companies need 7-9 billion tons of annual CO2 removal by 2050, but most available credits come from questionable projects with unclear durability.

🌍 Market

TLDR: CDR market projected to grow from $842M in 2025 to $2.85B by 2034, with biomass-based removal dominating early growth.

The carbon dioxide removal market is experiencing explosive growth. First-quarter 2025 saw 780,000 CDR credits contracted: a 122% surge over 2024. Market forecasts project CDR value will grow from $842 million in 2025 to $2.85 billion by 2034. Biomass-based CDR (including forestry projects like Chestnut's) accounted for 94% of total volumes in H1 2025. Premium credits command prices 40% higher than base credits and 250% higher than low-quality ones. Microsoft alone has contracted hundreds of millions in carbon removal, with their Chestnut deal representing one of the largest US nature-based agreements.

🌱 Climate Impact & Potential

TLDR: Targeting 100 million tons of CO2 removal over 50 years while restoring native ecosystems

Chestnut's current projects will sequester an estimated 100 million tons of CO2 over their 50-year crediting period. Their 30,000+ planted acres represent America's largest afforestation project listed on any registry. The Microsoft deal alone covers 60,000 acres of forest restoration, planting 35 million native trees. Unlike temporary solutions, Chestnut's approach creates permanent forests that continue carbon sequestration for centuries while providing co-benefits: restored wildlife habitats, improved air and water quality, increased biodiversity, and local economic development.