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BP invests and gets majority stake in US forest offset firm Finite Carbon

The oil and gas giant ramps up its investment in the largest carbon offset developer in the U.S., as it increases focus on natural climate solutions in support of its net-zero targets.

Aerial view of forest with road through it

Photo by Geran de Klerk on Unsplash.

BP has brought the Americas' largest developer of forest-based carbon offset projects into its stable, having snapped up a majority stake in Finite Carbon through its business accelerator Launchpad, the oil and gas giant announced last week.

The deal — financial details for which were not disclosed — aims to support the expansion of Finite Carbon, which identifies and develops projects that enable landowners to generate revenue from the protection, restoration and sustainable management of forests, BP said.

The move, which builds on BP's existing interest in the company, will see Finite Carbon brought under the BP umbrella within its Launchpad division.

It marks the latest move from a major fossil fuel firm into the burgeoning carbon offsets market, as carbon intensive companies increasingly seek to invest in natural solutions such as forest, peatland and mangrove restoration so as to offset emissions on their pathway towards net-zero targets.

The practice remains hugely controversial, with many environmental campaigners arguing the approach distracts from the need to cut emissions and often fails to deliver promised emissions reductions.

But advocates of offsets maintain they provide a means of tackling emissions from hard-to-decarbonize sectors, protecting and expanding forests, and enhancing biodiversity and climate resilience.

Putting a price on carbon can make it possible for anyone with the ability to protect, plant or improve forests to generate revenue from their efforts ... However, there is no infrastructure to quantify, monitor and verify these actions.

Some carbon intensive firms also have argued that investments in offsets are not a replacement for wider efforts to curb emissions. Earlier this year BP promised a "rapid transition" to net-zero by 2050 by stepping up its investment in non-oil and gas activities, before announcing plans over the summer to cut its oil and gas production by 40 percent while ramping up clean energy and technology investment over the next decade, including in nature-based solutions.

David Eyton, BP's executive vice president of innovation and engineering, said Finite Carbon had the potential to build a global platform for managing and financing natural climate solutions.

"Deepening our partnership will allow them to accelerate their development and expansion," he said. "Finite Carbon's progression through BP — from venturing investment to majority ownership and introduction to Launchpad — is a great example of how we are applying our unique innovation ecosystem to foster innovation and build material energy businesses in support of our net-zero ambition."

Finite Carbon has 50 forest projects across 3 million acres in the U.S., which it claims have registered more than 70 independently verified offset schemes and generated more than $500 million in revenue for landowners.

By teaming up with BP, Finite Carbon said it would benefit from the oil giant's global footprint and technological infrastructure to help expand its operations and scale up the voluntary carbon market.

Sean Carney, the company's founder, explained the increased investment from BP would help deliver a further $1 billion in revenues to landowners by 2030 from its existing business, as well as from its new web-based CORE Carbon platform that aims to help smaller landowners access the offset market.

"Putting a price on carbon can make it possible for anyone with the ability to protect, plant or improve forests to generate revenue from their efforts," he said. "However, there is no infrastructure to quantify, monitor and verify these actions. Thanks to this unique partnership with BP, Finite Carbon now has the resources of a global energy company behind it to help address this enormous environmental challenge and help small landowners access this market."

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