Forestry-as-a-Service
How might creative entrepreneurs unblock barriers to America’s massive reforestation goals?
Opportunity Overview
Forests are one of the most important solutions we have to slowing down climate change. Deforestation alone is estimated to account for 14 to 21% of man-made emissions. Forests also serve as habitats to 80% of the world’s terrestrial biodiversity. A recent intergovernmental report highlights the vital importance of forest protection to tackle both climate change and biodiversity loss together.
In this article, I focus specifically on reforestation in aid of broader forest protection efforts. I provide a brief tour of the new reforestation technologies and business models that are being tested out. I then review some of the forecasted bottlenecks that could slow down efforts in the US. Finally I share ideas on how creative entrepreneurs might alleviate these barriers.
Current Landscape
Outside the forestry industry, the demand for reforestation can come from multiple sources: global initiatives (e.g. 1t.org, Trillion Trees); consumer businesses with tree planting related products (e.g. Ecosia, Ourforest, Facedrive); and corporate compliance requirements (e.g. Glencore rehabilitation of disturbed lands).
On the supply side, a number of startups around the world are answering the reforestation call. I categorize them into three buckets:
First, there are drone reforestation companies that rely on drones to survey sites for data collection (e.g. presence of animals and vegetation) and shoot out seeds packaged in special vessels. This approach improves the survival rate of seedlings compared to more established rapid reforestation practices (e.g. dumping seeds from a helicopter). Drone startups have emerged all around the world, including 🇺🇸 DroneSeed, 🇨🇦 Flash Forest, 🇬🇧 Dendra Systems and 🇦🇺 AirSeed Technologies.
Second, there are remote sensing companies that keep trees healthy and uncut. Some companies monitor risks by applying machine learning to satellite imagery, weather and other data. One reforestation use case they offer is predicting and detecting wildfires. 🇺🇸 Terrafuse, 🇺🇸 Kettle, 🇺🇸 Jupiter and 🇳🇱 Overstory are a few examples. There are also companies that remotely facilitate the trading of carbon offsets in the forestry sector, which provide incentives to keep trees uncut. NCX and Pachama are two prominent examples.
Finally, there are companies that focus on degraded land restoration. There are 2 billion hectares of degraded land estimated to be available for rehabilitation. These companies leverage unique strategies to tackle the difficulties of planting on challenged soils. For example, 🇳🇱 Land Life Company uses a proprietary biodegradable Cocoon that nurtures a seedling through its first year.
🇺🇸 Terraformation also targets reforesting desertified lands and brands itself as a “global forest accelerator”. They offer products that help anyone in the world grow forests at scale:
Modular off-grid seed banks that can restore up to 2,000 to 17,000 hectares;
A 1,200 square foot nursery kit that can be assembled by two people;
Solar-powered reverse osmosis desalination to provide low-cost irrigation; and
A suite of software applications (e.g. seed collecting and seed banking) to manage all aspects of a restoration project.
Customer Value and Carbon Benefits
The main presumed advantage of tech-enabled reforestation is being able to plant trees cheaper and faster compared to traditional methods. Note that costs vary significantly based on local terrain factors (e.g. site accessibility, infrastructure availability, whether soil is degraded) and what is included (e.g. initial planting costs vs. maintenance).
I compiled some data points to illustrate the assumed advantages, although benchmarks should always be used with caution. My baseline number comes from a recent study which estimates a cost of $30 billion to reforest 33 billion trees across 26 million hectares in the US (i.e. $1.1 per tree and $1,262 per hectare). The study assumes a reforestation portfolio across different soil conditions (e.g. natural, pasture and crop lands) and excludes post-planting maintenance activities.
🇺🇸 DroneSeed is reported to have a planting cost of $275 to $400 per acre (or $700 to $1000 per hectare), which is about 20% to 40% cheaper than the baseline. Their website states a savings of 10% to 35%, in addition to planting 6x faster than by hand. 🇨🇦 Flash Forest “aims to bring the [planting] cost down to 50 cents per tree”. This puts their savings around 50% compared to the baseline.
In contrast, 🇺🇸 Terraformation referenced a cost of $1,000 per acre (or $2,500 per hectare) to reforest degraded land specifically, which also includes post-planting maintenance costs. Terraformation’s number is based on China’s experience over the last two decades, and the company also referenced this cost review.
As for the decarbonization benefits of massive reforestation, I quote Yishan Wong, founder and CEO of Terraformation: “Surveying the entire landscape of proposed geoengineering solutions to climate change, I believe one in particular stands out as being the lowest cost, lowest risk, most politically feasible, and most scalable, while maintaining very high efficacy: It is massive global reforestation.”
Potential Market Opportunities
To maximize the reforestation potential of the US, a recent study in Frontiers in Forests and Global Change calls for the need to double seedling production. This is a complex problem, involving bottlenecks from seed collection through nursing the seeds into seedlings, which are caused by limitations around labor, infrastructure, contracts, financing, as well as land and water availability.
I wonder if creative entrepreneurs can build on the Terraformation business model by offering solutions that target discrete steps of the reforestation value chain? If the incentives are there, I imagine startups providing solutions that can help unblock the obstacles above -- something we might call Forestry-as-a-Service.
For instance, what if interested parties can go online and sign seedling supply contracts by operating micro nurseries out of their homes? What if the training and equipment can be delivered seamlessly, ensuring both minimal user friction and minimal seedling failure rate? I imagine a business that enables a flexible and distributed supply network for seedling production. In fact, an existing pilot run by the University of Minnesota is already testing the idea out.
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One aspect that would be interesting to investigate is if there is a multiplier on impact depending on where a tree a planted. For example, does reforestation of the Sahara have a greater or lesser impact than reforestation of the Amazon. To take it one step further, does the reforestation of one area give additional utility to humans in another form? That might change the value equation to make it financially viable in certain areas. Do enough trees in the Sahara allow nearby areas to be farmed again?
I remember years ago reading about a company that designed a tree incubator for deserts, I don't remember it's this one or not. I can't imagine the economics work as well some of the solutions you proposed, but it might be able to grow the total "forest-able" area globally. Would having more total available forests might allow humans to continue to keep the deforested land for agriculture while simultaneously reducing global carbon impact? Interesting space and great read.
https://www.youtube.com/watch?v=HRF2bUBPA90