ESG News just published Citi Closes $72 Million Carbon Removal-Linked Note for Texas Biochar Project.
ESG News reports that Citi has closed a $72 million, 3.5-year principal-protected Carbon Removal-Linked Note to finance Applied Carbon’s biochar operations in Texas. Instead of conventional coupon payments, investors receive returns linked to carbon credits the project issues and delivers, which Citi calls its first outcome bond tied to verified removals. Applied Carbon runs mobile pyrolysis units that turn crop residue into biochar in or beside farm fields, producing and applying the material in a single pass. A 2022 offtake agreement with Microsoft covers a portion of the project’s future credits, and Applied Carbon says it plans to expand deployments across Texas with Citi and Nuveen as partners.
Our take (Heads-up): The structure is the real news here: outcome-linked debt for a removals developer is still rare, and principal protection plus a Microsoft offtake makes it sellable. What the article does not say matters - who the investors are, what share of credits Microsoft covers, pricing, or which registry and methodology verify issuance. Those details decide whether this is a repeatable template or a one-off.
-> Read the full piece at ESG News
Captain Drawdown is flagging this. The reporting is ESG News’s. Go read them directly, not a rewrite from us.
Source: esgnews.com