NativState
20% Gross Revenue Royalty on a portfolio of U.S. Improved Forest Management carbon credits.
Operator
NativState LLC
Location
USA, Arkansas, Louisiana, Mississippi
Stage
Issuing
Commodity
Emission Reduction Tons (ERTs)
Terms
Purchase Price
US$5.6M
NativState is an Arkansas-based forest carbon project developer focused on aggregating small-to-medium forest landowners into Improved Forest Management (“IFM”) projects being developed under the American Carbon Registry (“ACR”). Green Star acquired several gross revenue royalties on NativState's carbon credit-issuing portfolio of IFM projects in the southeastern United States. The Royalties are expected to deliver to Green Star premium voluntary carbon credits over a 20-year period, with a total consideration for the Royalties of US$5.6 million to be paid over a series of tranches.
Highlights
- Immediate credit-issuing and cash-flowing royalty for Green Star: Project ACR 783 in Arkansas became Green Star’s first carbon credit-issuing investment with approximately 180,000 carbon credits expected to be delivered under the Royalty in 2024. Approximately 75% of Green Star’s attributable carbon credits from the Royalties are expected to be delivered in the first five years.
- Expansion of Green Star’s North American nature-based portfolio: The Royalties on NativState's IFM projects complement and diversify Green Star’s existing portfolio of North American nature-based carbon credit solutions.
- Aligned and defensive royalty structure: Green Star and NativState have agreed to several defensive mechanisms, including minimum carbon credit volumes to be delivered over the 20-year royalty term.
- Multiple Royalties with strong investment metrics: The Royalties consist of a 20% Royalty on Project ACR 783 and 10% Royalties on an additional 60,000 acres across Arkansas, Louisiana, Mississippi, and Missouri, to be developed by NativState and registered as future ACR projects. At prevailing carbon credit prices, the Royalties are expected to provide significant net present value accretion and allow for an attractive payback period.
- Partnership with rapidly growing carbon developer: NativState, with over 300,000 acres under management, is striving to become the largest U.S. aggregator of small-to-medium forest landowners. Green Star is proud to be building a long-term partnership with NativState by funding American forest landowners keen to participate in both IFM practices and voluntary carbon markets.
Asset Description
NativState LLC (NativState) is a forest carbon project developer in the United States with a growing portfolio of Improved Forest Management (IFM) projects in the southeastern United States, including projects that are already carbon offset-issuing.
Below is a summary of ACR projects that Green Star Royalties is funding with NativState.
PROJECT ACR 783 – THE S&J TAYLOR FOREST CARBON PROJECT, ARKANSAS
Project ACR 783 is a verified and already-issuing project and represents approximately 18,000 acres of sustainably managed forestland across Southcentral Arkansas. This project is expected to generate approximately 1.5 million carbon offsets over the next twenty years. Green Star now owns a 20% Royalty on this project, which issued and sold its first carbon offsets in March 2024 with a second carbon offset issuance expected later in 2024.
The S&J Taylor Forest Carbon Project aims to conserve Saline River bottoms riparian hardwoods and pines in Arkansas. Project ACR 783 aims to maintain forest CO2e stocks by certified and sustainable management while accomplishing significant carbon sequestration and providing important co-benefits to the Ouachita watershed, local communities, and improved water resources to downstream communities throughout the Gulf Coastal Plain Region. Large tracts of riparian bottomland hardwoods that are part of this project act as essential buffers from runoff to the river and to the habitat of the endemic freshwater Arkansas fatmucket mussels.
UPCOMING ACR PROJECTS
As part of the royalty agreement, NativState will continue to enroll forest landowners across the southern United States into future ACR projects that will be subject to 10% Royalties, until total acreage under the Royalties reaches 60,000 acres, excluding Project ACR 783. These future IFM projects are expected to be located in Arkansas, Louisiana, Mississippi, and Missouri.
About NativState
NativState LLC is a forest carbon project development company partnering with small-to-medium sized landowners across the southern United States to deliver access to global carbon markets. It works with landowners to improve and conserve their forests while realizing a financial return based on the creation of high-quality carbon credits sold to companies seeking to meet and exceed their carbon emission reduction goals. NativState empowers forest owners with the ability to manage their properties sustainably and provide the co-benefits of improved water quality, improved wildlife habitation, and improved overall health of the forest itself.
For more information about the project as well as the latest updates, please visit
www.nativstate.com.