Natural Capital Exchange (NCX) connects companies that are aiming to reduce their carbon footprint and incentivizes them to delay harvesting and allow their forests to pull more carbon out of the atmosphere. NC State entered a partnership with NCX in July 2022.

Alex Macintosh is the leader of NCX’s U.S. origination team and is responsible for initiatives that attract forest landowners and land managing institutions such as NC State. According to Macintosh, NCX sees forest carbon as a new and emerging market for forest landowners that previously were only able to generate revenue from timber markets. 

“Any landowner will have slightly different motivations and incentives,” Macintosh said. “But the folks that we’re working with typically have management objectives that rely on generating revenue from their property. And the reason that’s a good fit for our program is because we really think of our carbon marketplace as changing management, incentivizing it using economics to create a market based system where we can and try to address climate change.”

According to Macintosh, NCX engaged with NC State’s College of Natural Resources because of their good forestry program and employees that are well respected in the broader forestry community.

“I think specifically the university was interested in this learning opportunity, both in generating revenue that can be used to fund financial aid or student programs across the different forest assets, but also as a way to sort of engage and have folks learn about this new sort of forest management opportunity and trend that we’re seeing with carbon markets,” Macintosh said.

According to John Sanders, a forest manager with the College of Natural Resources’ forest assets team, NC State’s relationship with NCX began in May 2022. NCX did an analysis based on aerial and satellite imagery in order to report how much carbon was on NC State properties, and what has potential to be harvested. These numbers were reported back as harvest deferral credits, and the management team then decided how many harvest fertile units they were willing to defer. 

“When you tell them how many credits you’re willing to defer, you also tell them at what price you’re willing to defer those credits,” Sanders said. “We set our price low, because we wanted to ensure that we would be in the market. And according to our harvest schedule, we had a lot of acres that were not in the harvest plan that we could defer credits and make a little money off of them, even though we’re not planning to harvest them internally. And so it gave us the option to generate income off a standard that we wouldn’t otherwise be generating income.”

According to Sanders the College’s relationship with NCX began in May 2021, and their contract lasts from July 2021 until June 2022

“We need to make sure that we stay within the threshold of our harvest plan to make sure we don’t harvest over the allowable amount, based on the agreement with NCX now that we can continue to harvest,” Sanders said. 

There is a huge expectation for projected growth in this industry, and more companies are publicly announcing statements of wanting to go net zero and reduce their carbon footprint, according to Macintosh.

“We’re hearing that more and more companies are doing this and there are potentially, in the future, additional regulations that could come into play that would make this market really take off,” Macintosh said. “We’ve grown pretty steadily over the last 16 months to the point now where we’re under contract with over 3000 landowners, representing about 5 million acres of forest land.”

Sanders said the money made from the NCX agreement helps further the management of the forests, and the surplus is contributed towards student scholarships and research opportunities. Students also have the opportunity to participate firsthand in the partnership. 

“We have a crew of students that work for us that are what we call scholarship students,” Sanders said. “And they’re able to work on these tracks that we’ve sold the carbonyl. And the funds that we’re going to get are going to help support the work, help pay these workers. And we have one student in particular that actually participated in a promotion video that NCX did for our college and our relationship.”

Sander said the largest benefit from the College’s relationship with NCX is the ability to generate income from areas that aren’t as productive. 

“It gave us alternatives,” Sanders said. “It’s also helping to sequester carbon and avoid, especially for private landowners, any kind of help to avoid change of use scenarios. Whether that’s in the near future or down the road, it will help.”