Unpacking the 2021 Summer NCX auction: detailed results
Gordon Vermeer
Gordon Vermeer
29 July, 2021 min read

In our recently-concluded Summer 2021 carbon auction, NCX has gone under contract to defer the harvest of over 16 million tons of timber in the next year, taking a big stride in boosting forests’ standing carbon storage by increasing their average age.

The Natural Capital Exchange (NCX) forest carbon program launched in Q1 of this year. Underlying NCX is the belief that when it comes to our planet’s forests, society fails to pay landowners for all of the benefits their forests provide, and that putting carbon on the same economic footing as timber is a critical response to that failure.

That’s why we’ve made NCX as practical and as simple as possible for landowners. The summer auction results bear witness to how appealing this simplicity is: over 570 forest landowners from across 16 states had their NCX bids accepted at a price of $12 per Harvest Deferral Credit (HDC), going under legal agreement to defer timber harvest on their properties and deliver an expected climate impact of about 500,000 MT CO2e. Participating carbon credit buyers include Microsoft*, Rubicon, Patch, Lune, and Cargill, among others.

How does the NCX auction work again?

NCX runs in 1-year cycles, with a new cycle kicking off every three months. The 1-year program beginning on July 1 of this year is our Summer 2021 cycle; the inaugural run back in April was ‘Spring 2021’.

In April through June of this year, interested landowners enrolled in NCX by signing up to our free landowner platform, confidentially sharing their property boundaries, and receiving an assessment of the carbon potential on their property. (Having closed the Summer 2021 cycle, Fall 2021 is open now across the entire contiguous 48 states!)

Then came time to bid in the procurement auction: almost 900 landowners expressed the prices at which they were willing to defer timber harvest on their property. Bids for our Summer cycle were due on June 8. In the following week, NCX ‘cleared’ the market, anonymizing all landowner bids, assessing their characteristics such as geographic location and landowner size, and then accepting the lowest-priced bids for our procurement quantity.

Why the price fell this cycle

The NCX team can often be heard to say, “Measurements make markets.” But what’s so good about markets (and auctions) anyway? Our Spring 2021 recap laid out three crucial benefits that our auctions achieve: they ensure society’s climate dollars are being spent where they have the most impact; they ensure equity for landowners; and they sort through the complexity of buyer preferences.

When you run an auction, you ensure a match between supply and demand, and you uncover a market price. Since supply and demand fluctuate over time, price should be expected to adjust, too.

Between the Spring and Summer 2021 cycles, the price of a Harvest Deferral Credit (HDC) decreased from $17/HDC to $12/HDC. This primarily reflected a surge in supply; as noted above, the number of participants and the number of HDCs bid into the NCX auction each increased about 5x between Spring and Summer. NCX’s procurement quantity increased markedly as well, reflecting our current and anticipated buyer orders of carbon credits, and the quantity of harvest deferral anticipated to be required to fulfill those orders–but on balance, the growth in supply outpaced demand, resulting in a lower clearing price this cycle.

Clearing the market

As in the Spring cycle, our market clearing process included dividing bidders into cohorts based on landowner size, type, and state, and then analyzing these cohorts both separately and as a whole. While these individual cohort supply curves displayed some variation, we once again determined that a consistent price across all cohorts would best serve our buyers and sellers; however, we continue to anticipate modest price differences across cohorts as the market matures, driven by buyer preferences.

The NCX team also paid close attention to the impact of the $12 HDC price on bidder acceptance rates. In the Spring cycle, we accepted bids from 83% of the landowners who submitted them; in this cycle that dropped to 64% (and lower among some cohorts). Auctions, by nature, are designed to select a set of ‘winning’ bids from among all those submitted. If NCX were able to accept all participants, we wouldn’t need an auction! But at the same time, we value the effort and intent reflected by landowners going through the NCX enrollment, assessment, and bidding processes, and so we don’t decline bids lightly.

Detailed results and cycle comparison

Relative to the Spring cycle, participation in the Summer cycle tilted even more toward small- and medium-size landowners, continued validation that NCX is successfully increasing their participation rates in new markets and revenue opportunities that have historically been difficult to access.

Category Spring 2021 Summer 2021
Number of accepted
Share of contracted
harvest deferral
Number of accepted
Share of contracted
harvest deferral
Small (<750 acres total area) 60 4.2% 353 12.2%
Medium (750-5,000 acres) 32 10.9% 187 34.9%
Large (>5,000 acres total area) 27 84.9% 37 53.0%
Total 119 100% 577 100%

*Figures may not sum due to rounding

NCX also succeeded in rolling out to five new states in two entirely new regions, albeit regions with rich histories of forest management and strong bases of engaged landowners:

NCX Region State Share of total participating acres
Spring 2021 Summer 2021
Southeast Alabama 20% 11%
Arkansas 11% 8%
Florida 3% 0.4%
Georgia 6% 25%
Louisiana 30% 12%
Mississippi 6% 7%
North Carolina 1% 5%
South Carolina 3% 4%
Tennessee 1% 2%
Texas 18% 18%
Appalachia New York 2%
Pennsylvania 2%
Lake States Michigan 2%
Minnesota 0.1%
Wisconsin 2%
Total 100% 100%

*Figures may not sum due to rounding

Lastly, as expected, accepted bids showed a close correlation between total property acres and the amount of harvest deferrals accepted:


Forest landowners make NCX possible. The summer 2021 cycle, powered by almost 5x more landowners than the spring cycle and spanning 16 states, demonstrates how an efficient, data-driven approach to forest carbon will scale quickly and deliver verifiable impact to net-zero leaders. As always, the trust of our marketplace participants is our number one priority, and we offer this recap of the results as an indication of our commitment to transparency. If you haven’t already done so, please join us on NCX today!

*As part of Microsoft’s FY21 Carbon Removal portfolio announced in January 2021.

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about the author

Gordon Vermeer

Gordon Vermeer

Chief Financial Officer | NCX Program Director
Gordon is the CFO of NCX and leader of the program team. He earned his MBA from the Haas School of Business at UC Berkeley with a focus on finance and natural capital markets. He began his career at the forestry and farmland investment arm of GMO, performing research and analysis relating to a $2 billion global portfolio of rural landholdings.