Kiland was previously known as Kangaroo Island Plantation Timber. The company owns 18,600 hectares of land on Kangaroo Island, Australia’s third largest island located off the coast of South Australia.

The plan was to grow timber on the island for woodchipping. Alongside this the company was developing a deep water wharf to facilitate cargo being shipped to the mainland.

Things did not go to plan. At the beginning of 2020 bushfires decimated the eucalyptus plantation. In August 2021 the application to develop the seaport was declined by the state government. The company renamed itself to Kiland and focused on reverting the forestry land to pasture for agricultural use. The forestry assets were written off.

Since then the company has raised capital to pursue a plan to convert the fire damaged trees into carbon capture credits. 

According to the companies presentation: 

Biochar is a charcoal-like substance produced by heating organic matter without oxygen in a process called pyrolysis. Pyrolysis doesn’t produce carbon dioxide as ordinary, oxygen-fuelled fire does. Instead, the carbon gets locked as charcoal-like matter.

If the trees are left as they are carbon is released as the wood rots. Instead, converting them to biochar and sequestering (i.e. burying) it will lock away the carbon.

The company estimates it has 4.5 million tonnes of fire damaged biomass, which will convert to 0.95m tonnes of biochar, resulting in 2 million carbon removal credits over a period of 10 years or more. The company expects to deploy pyrolysis kilns in place so biochar is produced on site. 

The spot price for a carbon removal credit is currently around EUR111. US$22 product cost per CRC, and 20% of revenue paid to project partners.

Assuming a CRC is sold for USD 110 (~EUR100), less costs and rev share, it is about USD 70 revenue per CRC. Company estimates 233,972 CRCs produced annually, roughly USD 16.4 million / year (AUD 24 million / year) with those figures.

There is also the possibility that some biochar will be sold for agricultural use, such as soil conditioning. This attracts a higher price is the US but unclear what demand exists in Australia.

The company currently has a market cap of $144 million. Land holdings are valued at $72 million and $48 million cash as of 31 Dec 2022.

Just some initial notes. Don't currently hold.