October 17, 2024 | Carbon Credits |
In February 2025, the American Forest Foundation (AFF) will launch a groundbreaking carbon credit auction through its Family Forest Carbon Program (FFCP). Designed to support rural communities and small forest owners, the auction offers businesses an efficient way to purchase high-quality nature-based carbon credits while addressing critical funding gaps in climate mitigation projects.
Traditional payment upon delivery models delay project implementation, but the AFF auction structure could accelerate action. The AFF Carbon Auction introduces a hybrid financing model that provides partial upfront payments to project developers. This ensures early project initiation and ties corporate investment to measurable milestones such as enrolment and verification progress. Buyers secure carbon credits at competitive prices, protecting them from future market volatility while supporting long-term decarbonization goals.
Nature-based solutions (NbS), such as sustainable forest management, have immense potential to mitigate climate change, but remain underfunded, with only 1.2% of their annual potential tapped by the voluntary carbon market (VCM). According to the International Union for Conservation of Nature (IUCN), NbS could deliver 30% of global climate mitigation by 2030 and generate cost savings of US$393 billion by 2050.
Removal credits will dominate the auction, providing both environmental and financial benefits. In addition, the FFCP empowers small forest owners with technical assistance and financial incentives to enhance carbon storage while delivering co-benefits such as improved water quality, biodiversity and forest resilience. By encouraging early investment and providing transparency, the AFF auction aims to transform VCM in the US by filling funding gaps and encouraging corporate participation.
