Chestnut Carbon stated it has signed a new long-term offtake agreement with Microsoft for the delivery of high-quality nature-based carbon removal credits to be generated as carbon removal from Chestnut’s ARR project in the Southern United States, covering Arkansas, Texas, and Louisiana. The new offtake agreement follows the signing of the initial offtake agreement between the two companies December 2023.

This is one of the most significant nature-based and engineered carbon removal projects in the US, Chestnut has signed a deal to supply Microsoft with over 7 million tons of carbon removal credits over the next 25 years. Beyond this, the project will also see restoration of approximately 60,000 acres of land through planting more than 35 million native trees.

Scaling Up Carbon Removal Efforts

Brian Marrs, Senior Director of Energy & Carbon Removal at Microsoft, said, “This agreement with Chestnut Carbon is another positive step towards Microsoft’s goal to become carbon negative by 2030. We look forward to the prospect of scaling forest restoration within the United States, attracting sophisticated private capital in the process. We are glad to see the Sustainable Restoration Project diversify the ecological impact of our global carbon removal portfolio.”

With this latest deal, Chestnut will significantly scale its carbon removal portfolio. By 2030, Chestnut plans to expand its ARR portfolio to 500,000 acres, removing 100 million tons of CO2.

The Chestnut Sustainable Restoration Project

The Chestnut Sustainable Restoration Project stands out for its focus on creating long-lasting ecosystems of native forests at scale. Unlike other projects, it focuses on planting biodiverse hardwood and softwood trees, offering a broad range of environmental benefits. Microsoft’s new agreement with Chestnut directly supports the continued growth of this initiative.

Chestnut’s Sustainable Restoration Project stands out for several key features that ensure its effectiveness and long-term impact. The project, registered with the Gold Standard, issues high-quality carbon removal credits based on actual carbon sequestration, not avoidance. Chestnut ensures long-term durability by conserving land, planting biodiverse species, and implementing risk mitigation practices to sustain carbon storage.

Also read: Microsoft Expands Carbon Removal Partnership with re.green

The project restores marginal agricultural land to native forests, creating value that wouldn’t exist without the global carbon credit market.

Beyond carbon removal, the project provides significant environmental benefits, including enhancing native wildlife habitats, improving air and water quality, and supporting economic development through community engagement and alternative land use strategies.

Lhyfe, a producer and supplier of renewable energy is raising up to € 11 million in funding from Sweden’s Klimatklivet investment program, facilitated by the Swedish Environmental Protection Agency and co-funded by the European Union. Lhyfe will fund the construction of a new renewable hydrogen production facility in Vaggeryd, Jönköping County, southern Sweden.

Vaggeryd is an important location strategically between Stockholm, Gothenburg, and Malmö. Therefore, it can supply hydrogen and meet the region’s growing demand.

Increasing Demand for Hydrogen for Transport Decarbonization

With transport sector decarbonisation, the demand for renewable hydrogen will always keep going up. In this respect, the new production facility will introduce green hydrogen production with a capacity to produce up to 4.4 tons a day using a 10MW electrolyser. The facility’s hydrogen will support the development of a network throughout southern Sweden.

The green hydrogen will power transport, heat local industries, and support production, playing a bigger role in reducing emissions.

A Key Step in Sweden’s Green Hydrogen Strategy

Lhyfe’s Vaggeryd plant will be a key step in Sweden’s green hydrogen development strategy. It will begin production in 2027 and provide customers with its first kilogram of renewable hydrogen. This project adds to Lhyfe’s previous Klimatklivet grant for a Trelleborg facility, expanding the hydrogen network in southern Sweden.

The Vaggeryd project’s investment will cover 35% of costs, supporting development, design, equipment, and construction efforts.

Also read: Lhyfe and Masdar Partner to Boost Green Hydrogen Production

Lhyfe is a green hydrogen leader with facilities in France and Germany and additional facilities under construction across Europe. Lhyfe’s Bouin plant has been running since 2021, and by mid-2024, the company will employ 200 people across 12 countries.

Sara Wihlborg, Country Manager for Lhyfe Sweden, said, “We are delighted to have been awarded this investment support, which marks our second project in Sweden to receive backing from Klimatklivet. Green hydrogen is a key enabler in the transition, strengthening the competitiveness of Swedish industry while increasing domestic energy security with locally produced energy.”

She added, “Additionally, the waste heat generated during the production process will be utilized in the existing district heating network in Vaggeryd. Lhyfe already delivers green hydrogen to industrial customers in Sweden, and with the two facilities now granted Klimatklivet support, Lhyfe ensures a robust and competitive supply solution for green hydrogen for our customers in Sweden moving forward.” 

The hydrogen production process will also generate waste heat to support Vaggeryd’s local heating network.

The next steps include securing approvals, permits, and a final investment decision to move the project forward. After securing the permits, Lhyfe will build the facility and create a strong green hydrogen network in Sweden.