BP has acquired a majority stake in the largest US carbon offset project developer Finite Carbon, as it works towards its 2050 net zero carbon ambition.
BP has ramped up its existing interest in the company through its business accelerator BP Launchpad. The deal aims to boost Finite Carbon's expansion, including into new geographical markets.
Finite Carbon pays landowners to protect, restore and manage forests sustainably, generating carbon offset credits that can be traded on markets. The firm has 50 projects on three million acres in the US and generated over $500mn in revenue for landowners. The increased investment from BP will help to deliver a further $1bn to landowners by 2030 from the firm's existing business lines.
BP declined to comment on the value or size of the acquisition. It invested $5mn in Finite Carbon last year.
"Nature-based solutions have the potential to remove up to 12Gt of carbon dioxide emissions per year and are set to become a key component of carbon management strategies," UK bank Barclays said, adding it sees BP's acquisition as a "small incremental positive."
But forest carbon sequestration remains controversial, with a number of campaigners arguing it represents a business as usual option for oil firms, distracts from the need to cut emissions and is unproven at the scale required to achieve climate goals.
"Oil majors are increasingly citing forest projects and other "nature-based" offset schemes as a means to reach their climate targets while continuing to pump out oil and gas. If such strategies fail, further climate destruction will be locked in, and there are many reasons for concern," US-based NGO Oil Change International said in September.
