Post-Webinar Insights: North American Forest Carbon; A Surplus Waiting on Demand

Post-webinar insights from cCarbon’s flagship State of Sector report

Our new flagship report, North American Forest Carbon: State of Sector, maps a market that has quietly built itself a problem. On 7 July we launched it alongside three people who know the trees and the rulebook better than most — David Stevenson (Finite Carbon), Nathan Truitt (American Forest Foundation) and Dr Jennifer Jenkins (Rubicon Carbon). What follows is the condensed argument, sharpened by where the panel agreed with us — and where they pushed back.

Key takeaways

• The risk is quality and clearance, not headline volume. A structural ~56 Mt IFM surplus — roughly ten years of demand, built at a 4× creation ratio — is mostly older, avoidance-heavy credit. Only about 15 Mt (27%) is CCP-eligible today.
• These credits are perishable. 87% of all IFM volume ever retired went within four years of vintage, 94% within five. Much of the surplus is now older than the stock buyers retire.
• CCP is becoming the gate to the next wave of demand — but the legacy book’s fate turns on transition, not labelling alone. The panel pushed back on us here, hard.
• SBTi’s Ongoing Emissions Responsibility framework is the swing factor. Forestry captures the near-term majority. The caveat from the panel: higher premium, lower volume.
• The relative surplus only clears if SBTi demand shows up. On today’s ESG demand the bank barely moves — about a decade of cover through 2030. With SBTi buying, cover falls back toward a healthy three to four years.
• Opportunity is tightly concentrated. Washington is supply-short and premium; California is sliding toward surplus; Canada stays narrow; Mexico is the one surplus with somewhere to go — and IFM, not ARR, carries North America.

How the bank built

The surplus is what happens when supply front-runs the demand that must absorb it. North American forestry retirements did grow — from about 2.2 Mt in 2021 to roughly 6 Mt in 2025 — but issuance leapt from 3.4 Mt to nearly 22 Mt over the same window, a creation ratio close to four to one.

Through the integrity wars of 2022–25 the broader voluntary market shrank from 153 to 123 Mt; North American forestry was treated as sheltered ground, and it was, yet the demand boom the supply side had priced in never arrived. What is left is roughly 56 Mt of stock — ACR IFM around 39 Mt plus Mexican CAR forestry around 16 Mt — about ten years of current demand sitting in the bank.

Perishable, not just plentiful

That overhang would matter far less if credits kept. They don’t. Buyers retire young stock: 87% of all IFM volume ever retired went within four years of vintage, and 94% within five. The surplus built in the imbalanced years of 2022–23 is now ageing past the point where most credits have historically cleared. As Jennifer Jenkins reminded the room, quality is largely a matter of buyer perception — “just because the credit’s older, it doesn’t mean it’s of less quality.” The market, though, behaves as if it does, taking fresh stock first and leaving the older, avoidance-heavy book behind.

Quality over volume: where the book strands

Headline volume is the wrong risk signal. Layer three axes together — CCP eligibility, credit type and vintage — and the book splits sharply. Only about 15 Mt is genuinely premium: CCP-eligible, removal-tagged and new enough. At the other corner sit roughly 22 Mt of four-plus-year-old, non-CCP credit — on the order of a quarter-billion dollars of value — that is most exposed to a fire-sale and then a write-down. The uncomfortable part is that the developers holding that stock are the very actors the market needs to fund the next wave of removal and afforestation projects.

The CCP gate — and a panel that pushed back

Our thesis is that ICVCM’s Core Carbon Principles become the gate to SBTi-led demand, and that the static-baseline v1.3 book sits outside it. The panel was not fully convinced. Jenkins put the challenge directly: the assumption that v1.3 will never be CCP-eligible is “quite questionable, or debatable.” Both she and Stevenson argued the removals inside the older methodologies are “essentially the same” as those in 2.1, and that the real story is movement rather than stranding.

“Most of these projects are going to transition if they can,” Stevenson said, adding that Finite has “moved a lot of the 1.3 tons, so we know that they sell.” He also made the case for ratings as the due-diligence layer for buyers without in-house teams — “especially for the 1.3 projects.” The nuance we take away: CCP is a gate to liquidity more than a price premium, and transition is the key that fits it.

SBTi: the swing factor

SBTi’s final Corporate Net-Zero Standard, published mid-way through our writing, is the single biggest swing factor. Its Ongoing Emissions Responsibility framework asks firms to cover a share of ongoing emissions with high-integrity credits from 2027 — comply or explain publicly why not — hardening to a removals mandate from 2035. Crucially, long-lived removals are a minimum of only 10% by 2035, which leaves the larger balance open to nature-based, short-lived removals, where forestry sits.

We expect ICVCM’s CCP to be recognised as SBTi’s first admissible grade, and on the optimistic case that pulls North American forest-carbon demand back toward double its current level by 2030. Nathan Truitt, who helped shape the framework, drew the parallel to VCMI’s earlier claims code and argued firms “might as well get started, so that at least we can get used to those compliance obligations” — while cautioning that “the price premium will be higher than you’ve projected, but the volumes will be lower.”

Does the surplus clear?

Only if that demand materialises. On today’s ESG-style demand alone, the relative surplus — the bank index, or years of cover — barely moves, it stays close to a decade right through 2030 even as the absolute pile grows. Layer in SBTi’s Ongoing Emissions demand and the picture changes character, with cover falling back toward a healthy three to four years by 2030. The route back to balance needs a trifecta — steady ESG growth, some moderation in new supply, and real corporate uptake of the framework. The hardest of the three to credit is supply discipline, given how well-stocked the ACR 2.1 pipeline already is.

Pricing bifurcates rather than lifting

A rising tide does not lift this market; the segments separate. Low-cost Mexican removals anchor the floor, current-methodology CCP-eligible IFM trades at a premium to the legacy book, and genuinely scarce afforestation reprices well above everything else — Truitt reckoned the best US ARR is already “over 100 bucks per ton.” Legacy avoidance and the building compliance surplus, meanwhile, compress toward cost. (We keep our specific price paths proprietary; the direction, not the level, is the point here.)

IFM carries North America

Truitt was candid on afforestation. Landowners “have a very important vote” on whether their land becomes a project, the cost of accessing ARR land has proved “way higher than any of us thought,” and the economics push the best US projects north of a hundred dollars a ton — leaving them exposed to cheaper, equal-quality supply from elsewhere.

That is why IFM does the heavy lifting: “I’m much more bullish on the future of IFM in a North American context than I am ARR.” The catch he owns for the whole sector is real — “there are still massive problems with IFM in the eyes of buyers: leakage number one, permanence behind that. We as a community have work to do.” It is precisely why getting the CCP label onto the IFM protocols matters so much.

The compliance backdrop: tight, soft, narrow, bright

The compliance markets that have anchored forestry demand are diverging. Washington is the tight one — under Ecology’s proposed new Forestry protocol, credit issuance falls by around a third and the offset bank stays in deficit through the mid-2030s, keeping it structurally short and landowner-favourable. California is softening the other way: its larger Non-DEBs pool crosses five years of cover by 2029 and ten by 2033, and because the compliance protocol has not moved to the latest methodologies, those credits carry no CCP and drift toward the back of the voluntary queue.

Canada stays a narrow, fragmented mosaic of four systems pulling in different directions, with the new Canada–BC framework a wildcard worth watching rather than pricing in. Mexico is the bright spot — the CCP-endorsed, ejido-based CAR Mexico Forest Protocol feeds an ETS heading into its operational phase, giving Mexico’s surplus both a domestic compliance sink and an international integrity premium. Almost alone in this report, it has somewhere to go.

What to do now

Whether you hold ageing stock, originate supply or buy into this market, the move rhymes: get ahead of the transition. Value the legacy book honestly, carry the latest CCP-eligible methodology, and lock partial forward offtake before scarce high-integrity supply tightens further. Truitt’s advice to buyers was the same in reverse — “if you think you’re going to need CCP-tagged removals in 2035, you should start having discussions now, because the supply of those high-quality credits is very, very tight.” The through-line for everyone is simple enough: not being able to sell is the real risk.

Read the full analysis → North American Forest Carbon: State of Sector

To compare notes or share a perspective, I’m at hhorner@ckinetics.com — always glad to talk. And if you are holding stock to value or a portfolio to position, cCarbon runs the report as an advisory bundle: Offsets Pro access with consulting hours, or bespoke transition and valuation work applied to your specific projects and credits.

— Harry Horner, Head of Strategy, cCarbon