Green Star Royalties, the world’s first carbon credit royalty and streaming company boasts funding top-notch North American nature-based climate solutions. It’s a joint venture between Star Royalties Ltd. Agnico Eagle Mines Limited, and Cenovus Energy Inc.
In a recent announcement, Star Royalties, via its partner Green Star, signed a “definitive royalty agreement” with NativState LLC to acquire several gross revenue royalties on a carbon offset-issuing portfolio of Improved Forest Management (IFM) projects in the southeastern United States.
NativState, an Arkansas-based forest carbon project developer, offers small to medium landowners an opportunity to realize the full carbon potential of their forests. They aggregate them into IFM projects registered under the American Carbon Registry (ACR).
Green Star’s Royalty Portfolio: Unlocking the Investment Plan
Green Star expects the royalties to generate high-quality voluntary carbon offsets over 20 years. The total payment of $5.6 million will be made in several installments in U.S. dollars unless specified otherwise.
The key strategies of the investment plan defined by Green Star are:
1. Expanding Green Star’s North American nature-based portfolio:
Acquiring the Royalties on NativState’s IFM projects enhances and broadens Green Star’s existing portfolio of North American nature-based carbon offset solutions.
2. First carbon offset-issuing royalty for Green Star
Green Star’s first carbon offset-issuing investment, Project ACR 783 in Arkansas, is projected to deliver around 180,000 carbon offsets in 2024. It includes approximately 120,000 carbon offsets upon closing. Green Star anticipates that about 75% of its share of carbon offsets from the Royalties will occur within the first five years.
3. Aligned and defensive royalty structure
Green Star and NativState have established defensive mechanisms, including minimum carbon credit volumes to be delivered throughout the 20-year royalty term.
4. Multiple Royalties with strong investment metrics
The Royalties encompass a 20% Royalty on Project ACR 783 and a 10% Royalty on an additional 60,000 acres across Arkansas, Louisiana, Mississippi, and Missouri, slated for development by NativState and registration as future ACR projects. At prevailing carbon offset prices, the Royalties are anticipated to yield significant net present value accretion and offer an attractive payback period.
5. Stable and rising demand for premium North American carbon offsets
Premium North American nature-based carbon offsets are witnessing increasing demand amidst limited supply. Current market pricing for these premium avoidance and removal carbon offsets are approximately $13-15/t CO2e and over $20/t CO2e, respectively.
6. Partnership with a rapidly growing carbon developer
NativState, managing over 300,000 acres, aims to become the largest U.S. aggregator of small-to-medium forest landowners. Green Star is pleased to forge a long-term partnership with NativState, financing American forest landowners eager to engage in both IFM practices and voluntary carbon markets.
Transaction Terms and Impact on Green Star’s Carbon Offset and Revenue Profiles
The transaction immediately provides Green Star with carbon offsets that can be monetized. Over the next 20 years, they’ll keep getting more offsets, with about 75% of them coming in the first five years.
source: Green Star Royalties
However, the transaction terms and conditions are significant for the financial gains of both parties. They include:
- Green Star will acquire the Royalties for $5.6 million, with payments made in installments tied to ACR registration milestones.
- In return for its investment, Green Star will receive a 20% Royalty on Project ACR 783 and a 10% Royalty on an additional 60,000 acres, slated for enrollment by NativState as ACR projects.
- Each Royalty will span a 20-year term starting from the first carbon offset issuance date of the ACR project.
- Carbon offsets will serve as the direct payment method for the Royalties.
- Green Star and NativState have agreed to defensive mechanisms, including minimum carbon offset delivery requirements over the 20-year royalty period.
Enhancing Carbon Sequestration through Improved Forest Management (IFM)
Improved forest management encompasses methods that either reduce emissions from forests or enhance carbon removal and storage. Techniques such as decreasing harvest volumes, extending forest rotations, etc. lower emissions from forests. They generate credits for the curbed emissions.
The conservation plans also elevate carbon storage above the baseline, guaranteeing excellent carbon sequestration.
From an economic perspective,
- These projects achieve increased net carbon stocks by either sequestering carbon through photosynthesis from expanded or maintained forest cover compared to the baseline or by curbing greenhouse gas emissions through reduced timber harvesting.
- Acceptable IFM practices, like extending rotations, implementing thinning, adopting fire prevention methods, and altering harvesting techniques, must comply with the selected carbon registry methodology.
CarbonDirect reports,
“Improved forest management has the potential to increase total stored carbon annually by 200 million to 2.1 billion tonnes without compromising the wood product and ecosystem benefits that come with managed forestlands.”
In the United States, timber harvesting is the most widespread disruption across forested areas, with most of the harvested timber sourced from private lands. Therefore, significant decisions about forest and land management can profoundly impact the capacity of forests to sequester carbon.
Presently, “premium avoidance carbon offsets” in the U.S. market are valued at about $13 to $15 per metric ton of carbon dioxide equivalent (t CO2e), while removal carbon offsets fetch over $20 per t CO2e.
Carbon Offsets and Habitat Protection: The Mission of Project ACR 783
Project ACR 783, also known as the S&J Taylor Forest Carbon Project spreads across 18,000 acres of sustainably managed forestland in Southcentral Arkansas.
Forest project: work in progress
source: NativState
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Green Star holding a 20% Royalty stake in Project ACR 783, is anticipating to produce ~ 1.5 million carbon offsets over the next two decades.
Notably, Project ACR 783 focuses on maintaining forest carbon stocks through certified and sustainable management practices to achieve significant carbon sequestration in the designated areas.
With its partner NativState, they are aiming to generate sustainable revenue streams through forest management and voluntary carbon markets (VCMs). The latter dedicates itself to conserving valuable hardwoods such as oak, gum, cypress, hickory, and pine forests within the Gulf Coastal Plain eco-region.
Besides carbon revenues, Project ACR 783 will also promote:
- Landscape stability
- Increased biodiversity, and
- Enhanced habitat protection for critical species
Alex Pernin, CEO of Star Royalties, has highly applauded NativState’s approach to the sustainable business model and its carbon offset issuance profile. He noted,
“We are proud to announce this multi-royalty investment in NativState’s portfolio of high-integrity IFM projects in the southeastern United States. This thoughtful transaction transitions Green Star into free cash flow generation and provides desirable economic returns while expanding and diversifying our existing premium North American portfolio.”
- FURTHER READING: US Department of Agriculture to Invest $300M to Boost Carbon Data in Agriculture and Forestry (carboncredits.com)
The post Green Star Royalties Invests $5.6M In NativState LLC for Carbon Offset Portfolio appeared first on Carbon Credits.
Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.
The earnings calls that quietly reframed climate from sustainability question to operating risk.
Three earnings calls in the last 18 months tell the story without any help from a press release.
Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.
You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.
Where climate risk has already appeared in earnings
The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.
Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.
Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.
What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.
The three commodity exposures that hit margin first
For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.
- Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
- Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
- Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.
TCFD and ISSB disclosure changes
The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.
For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.
The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.
What procurement and finance can do now
Three actions matter near-term.
Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.
Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.
Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.
Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.
If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
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