Hartree Partners invests in nature-based voluntary carbon offset projects

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LONDON, July 27 (Reuters) - Trading house Hartree Partners has joined with a company reducing deforestation to help it build up a portfolio capable of generating 20 million voluntary carbon credits a year.

Nature-based carbon offsets can be generated through schemes such as planting trees, agricultural projects or protecting forests that would otherwise be destroyed.

Hartree said its investment with project developer Wildlife Works will help to develop more than 20 projects which will reduce emissions from deforestation by around 20 million tonnes of carbon dioxide each year and 600 million tonnes over the 30-year life of the projects.

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No financial details of the deal were disclosed.

Carbon credits from the projects, in Asia, Africa and Latin America, would be verified using established standards such as the Voluntary Carbon Standard and the Climate, Community and Biodiversity standard, with issuance expected from 2023.

The trading house has already had discussions with potential buyers who are large corporations or financial institutions, Ariel Perez, Partner at Hartree Partners told Reuters.

Currently nature-based carbon offsets can trade around $5 a tonne but Perez said as demand rises he expects the credits from the portfolio could fetch from $9 to $30 a tonne, depending on the varying costs of paying landowners not to cut down trees.

"As inflation continues to increase and as the world runs out of existing carbon budget we think there is going to be upwards pressure on the price," he said.

A private sector task force on scaling up the voluntary carbon market said earlier this year the market will need to grow 15-fold to meet goals set under the Paris climate agreement and could be worth $5-$50 billion by 2030. read more

Many global companies such as oil major Shell (RDSa.L) have pledged to reach net zero emissions, and said they will seek to use some nature-based offsets, to help compensate for emission reductions they are unable to cut from their operations.

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Reporting By Susanna Twidale; editing by David Evans

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