The American Forest Foundation Carbon Auction: What We Learned

This past week, buyers and investors participated in the first-ever American Forest Foundation Carbon Auction. To everyone who joined us during auction week and everyone who followed along, we want to thank you for being part of this pivotal event. 

The voluntary carbon market is still taking shape, and we at AFF know we need to be leaders in helping shape this market—from the way we enroll landowners and design high integrity credits to the way credits are bought and sold. Being a leader means learning on behalf of the entire community—often learning out loud and learning in public. 

The AFF auction was exactly this—our chance to test new approaches to buying and selling carbon credits, to inform all who work in the voluntary carbon market. And from the perspective of the rapid learning for our community—it was a resounding success! 

We tested three things: 1) could we streamline the due diligence process for buying credits, 2) could we use an auction platform to transact and bring more transparency, and 3) would buyers be willing to purchase credits through partial prepayments that provided upfront financing while protecting the buyer from downside risk. In short, here’s what we learned:  

• Yes, buyers are interested in and already purchasing credits through prepayment contracts. Outside of the auction, AFF has already finalized prepayment contracts with buyers and is pursuing additional prepayment contracts as a result of the auction process. This early-stage funding is essential especially for small holder projects that require upfront costs to enroll landowners and support on the ground implementation of high integrity carbon credits. 

• No, the auction format did not meet buyers’ procurement needs and timelines. Despite widespread interest in the auction, with over 250 organizations participating in pre-auction activities and 45 bidders signing up, at the end of the day no buyer submitted a bid. As the auction week went on, we heard from buyers and investors that, although they were interested in the auction, they ultimately could not make the format work within their systems for procuring credits. Instead, multiple registered buyers and investors have reached out to engage bilaterally to purchase the available FFCP credits.   

• Yes, the Data Room shortened and simplified the due diligence process. Offering all necessary documents for due diligence in a data room streamlined discussions, gave buyers confidence, and reduced the amount of time spent curating individual conversations. As AFF and buyers pursue bilateral agreements for FFCP credits, by skipping this typical back and forth on due diligence, we are now one step closer to delivering impact to nature and rural communities. 

 So What’s Next? 

Thanks to positive buyer feedback, the Data Room will now be a permanent resource for any buyer interested in investing in FFCP. If you’ve already registered, you can access the Data Room anytime through your login and if you would like to begin reviewing FFCP’s due diligence records, you can still register here. And stay tuned for new features in the coming months. 

Outside of the auction platform, we’re also continuing to engage with interested buyers and hope to have more announcements on that front soon. If you are interested in purchasing our high-quality credits but weren’t able to make the auction platform fit with your needs, please reach out to John Ringer, Senior Director of Environmental Markets at jringer@forestfoundation.org.

AFF is also continuing to work with buyers and other project developers to find new ways to streamline and improve the way carbon credits are bought and sold. From purchasing through prepayment contracts to developing new ways to scale this market, we hope you join us in this effort.  

We will continue to share and build on the learnings we have discovered. Until then, thank you again for being part of the first AFF Carbon Auction. We hope you join us in continuing to innovate and strengthen this market—for family forests, our community, and the planet.