EFM has finalised a multi-year offtake agreement with Microsoft alongside a fund investment that together secure Microsoft’s access to up to 3 million nature-based carbon removal credits from EFM’s investment platform.
The deal includes an offtake agreement for the delivery of up to 700,000 credits through 2035, from a recently acquired property in Washington State’s Olympic Peninsula that EFM is transitioning to climate-smart forest management.
Additionally, Microsoft’s Climate Innovation Fund (CIF) invested in EFM Fund IV, which aims to mobilise $300 million for climate-smart forestry across the US. This is CIF’s first forestry investment in the United States and helps Microsoft secure future streams of up to 2.3 million additional high-quality credits with significant ecosystem and community benefits.
Bettina von Hagen, CEO of EFM, said, “Microsoft’s support marks a pivotal step in accelerating support for high-quality improved forest management projects. Their leadership sets a strong precedent for the carbon market and reinforces the importance of natural forests as a scalable natural climate solution in the US.”
Brian Marrs, Senior Director of Energy & Carbon Removal at Microsoft, said, “Microsoft recognises the important role of high-quality, nature-based solutions in meeting our Carbon Negative by 2030 goals.”
Scaling impact
EFM Fund IV’s first investment, 68,000 acres in Washington State’s Olympic Peninsula, exemplifies the company’s FSC-certified, climate-smart strategy.
The property had been industrially managed for close to a century by the prior owner. EFM’s approach diversifies the revenue streams from forests to include carbon credits and conservation easements alongside revenue from conventional forest products.
EFM Fund IV will initially focus on securing forest properties in the Western US, while also exploring other domestic markets where climate-smart management can create a competitive advantage for investors, alongside benefits for local communities. By enhancing the ability of the country’s working forests to function as robust carbon sinks, the fund will support the long-term forest health and economic sustainability of these natural assets and the communities that rely on them.
Improved forest management
EFM said that Microsoft’s long-term offtake agreement and investment in Fund IV will help raise the bar for Improved Forest Management (IFM) carbon projects, signaling their potential as scalable and effective climate solutions.
IFM is a carbon market methodology that encompasses a suite of sustainable forestry practices aimed at increasing or maintaining forest carbon stocks and improving forest health. These practices include extending the rotation age of trees, reducing the impact of logging operations, and promoting selective harvesting.
By implementing these strategies, IFM projects can not only increase the carbon storage of commercial forests, but also improve biodiversity, enhance water and soil quality, and provide socio-economic benefits to local communities.
Recent innovations, such as the adoption of dynamic baselines, have strengthened the integrity of IFM projects.