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Domain Capital Group and its subsidiary Domain Timber have announced the sale of almost 1,300 acres of timberland to a utility in Richmond, Virginia, to develop a solar project on the land, a move that is said to help reduce carbon emissions in the area in addition to adding renewable energy.
Domain maintains a portfolio of more than 23,000 acres of timberland designated for renewable energy projects, mostly for solar and wind. Closing of this transaction keeps the company on track towards their projected 75 sales in 2023, which amounts to over 17,500 acres from their total inventory of 254,000 acres.
As timberland is typically used for commercial wood products, a sale towards renewable energy development allows for such land to contribute towards decarbonization efforts rather than hurt the environment.
“We believe this is a clear example of Domain’s strategy to realize value above traditional core timberland returns through the implementation of ‘highest and best-use’ land sales and other value-added initiatives,” said Alton Owens, vice president of investments and environmental assets at Domain Timber Advisors.
Cutting Down Trees for Renewable Energy Projects: Contradictory Progress?
As trees play an important role in capturing carbon, maintaining biodiversity, and a multitude of other environmental benefits, clear-cutting timberland in order to develop a solar project maintains some clear contradictions.
However, according to a study out of Columbia Law, solar panels actually reduce more carbon emissions per acre than trees. The solar industry has grown immensely as the world attempts to limit global warming to 1.5 degrees Celsius by 2050.
With this growth, the placement of solar projects has become a point of contention as environmental damage in their development goes against the ultimate goal of their installation. According to the study, though, solar projects are rarely placed on forested land, and such projects appear to offset more emissions per acre than trees can sequester.
Typically, trees should not be cut down for the majority of solar projects, and deforestation should be avoided when possible. Yet, as much of Domain’s timberland is sold and cut anyway, supporting renewable projects on this land helps offset the benefits lost.
“While the forested habitat will ultimately be converted to a different land use, we believe that solar energy development is an important tool in reducing our nation’s greenhouse gas emissions, mitigating climate change, combating loss of biodiversity, and decreasing reliance of foreign energy resources,” said Owens. “This was a meaningful transaction for our client and a step forward for our mutual efforts in promoting sustainability.”
Domain Timber currently has $64 million designated to environmental investments, including wetland and stream mitigation banks, habitat conservation banks, fishery banks, environmental enforcement solutions, and direct environmental restoration projects.