European Green Transition PLC (AIM:EGT) told investors it had entered an exclusive option agreement for a carbon credit project at Altan farm in Donegal, Ireland.
It grants the AIM-quoted firm a 12-month period for due diligence on the potential carbon sink program, across a 1,370-acre site primarily comprising blanket peatland.
The project aligns with the company’s strategy of targeting green economy assets that offer revenue potential, EGT said.
The company plans to generate carbon credits through a revenue-sharing model with the landowner, minimising capital expenditures. It would mirror successful projects in Scotland, where peatland re-wetting has been effectively implemented.
"The Altan option agreement offers EGT the opportunity to generate cash flow in a capital-light manner by generating carbon credits,” chief financial officer Jack Kelly said in a statement.
“The market for voluntary carbon credits is projected to grow by a factor of 15 or more by 2030 as companies progress towards carbon-neutrality goals, and this agreement offers us an entry point into this high-growth market.
“Other European countries, particularly Scotland, already have a thriving carbon credit industry, generating credits from peatland sinks."
EGT noted that it will engage with relevant stakeholders during the due diligence phase to ensure the project meets the company's ESG standards.
If the option is exercised, the company expects to generate revenue through carbon credits without acquiring the land.
This could be the first in a portfolio of similar projects, and it would potentially see the company expanding into trading third-party carbon credits.