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Latham Advises on Landmark Forest Carbon Credit Agreements

December 8, 2023
Cross-office, cross-practice team advises Emergent as it entered into first-ever agreements with forest-rich host governments to supply emission-reduction credits to buyers in the public and private sectors.

As part of Latham’s ongoing support for Emergent, a multi-disciplinary team from across the firm’s global network has advised Emergent as it entered into first-ever landmark agreements with forest-rich host governments to fund carbon abatement projects and the reduction of deforestation.

These landmark agreements, potentially worth over US$60 million in total will involve the purchase of emissions reduction credits from 2017 to 2019, and are the first globally to involve funds from multiple corporate buyers alongside the public sector.

Through the Lowering Emissions by Accelerating Forest finance (LEAF) Coalition, Emergent initiates forestry projects in developing countries that generate carbon credits for sale in global markets. LEAF has become one of the largest ever public-private efforts to help protect tropical forests, to benefit the communities who depend on them, and to support sustainable development, a critical requirement of the journey to global net zero carbon emissions. 

On December 2, 2023, Costa Rica and Ghana became the first forest governments to sign Emissions Reductions Purchase Agreements (ERPAs) with Emergent to supply high-integrity jurisdictional REDD+ emissions reduction and removals credits to LEAF Coalition buyers. All credits will meet the Architecture for REDD+ Transactions’ (ART) The REDD+ Environmental Excellence Standard (TREES), guaranteeing the highest levels of environmental integrity and social safeguards. The agreements are backed by purchase guarantees from the governments of Norway, the United Kingdom, and the United States, covering a percentage of the credit volumes.

Latham has been advising Emergent since 2019. This effort has involved more than 25 lawyers across offices in the US, UK, EU, and Asia.

“This project represents a milestone in the development of a vibrant market for jurisdictional forestry projects,” said partner JP Brisson, who led the Latham team advising Emergent on these landmark agreements. “Our team — which involved lawyers from the firm’s Energy Transition, Economic Sanctions, Arbitration, and Tax groups — is delighted to support such an important initiative.”