Chestnut Carbon has raised $250 million in 2025, marking the voluntary carbon market’s largest fundraise so far this year and signaling resilient demand in a sector seeking to bounce back from a two-year slump in investment.
The New York-based company, which develops forestry projects that remove carbon dioxide from the atmosphere, said Tuesday that it secured $90 million in its latest funding round, bringing its total haul this year to a quarter of a billion dollars. The raise surpasses the $162 million secured in July by Climeworks, a developer of direct air capture technology.
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It comes as the voluntary carbon market struggles to recover from a steep contraction in recent years, with concerns over the quality of credits and accusations of greenwashing weighing on demand and pricing. Investment has plummeted since 2022, when the sector saw Climeworks and peer Svante raise $650 million and $318 million, respectively. The largest investment over 2023-2024 was Heirloom Carbon’s $150 million fundraise in December.
“A lot of the criticism of the carbon markets has been fairly leveled,” Chestnut’s chief financial officer, Greg Adams, said. “We want to deliver the best-quality projects and products to our customers and make carbon markets a more viable investment.”
Earlier this year, Chestnut signed a long-term agreement with Microsoft to provide more than seven million metric tons of afforestation, reforestation and revegetation, or ARR, carbon-removal credits. The partnership, expected to restore some 60,000 acres by planting over 35 million hardwood and softwood trees in the U.S., has been viewed as a vote of confidence in a sector where many corporate buyers have remained cautious.
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