Forest project issued CO2 credits for California market
Project developer Finite Carbon announced Wednesday it has registered a project that has issued 200,000 offsets eligible for use in California's cap-and-trade system, bolstering the currently short supply of credits available in the forthcoming market.
The project, which is located on 19,118 acres in eastern Maine, is the first registered project to be located outside of California that uses project guidelines for improving forest management (IFM), a method of improving forest carbon stocks.
Forest carbon protection is among four project types under the Climate Action Reserve (CAR) offset registry that California regulators have allowed to generate carbon credits that emitters can use to meet the state's mandatory carbon limits.
In addition to its first issuance of 200,000 credits, the project is expected to produce an additional 20,000 credits per year until 2020 to yield a total of 400,000 credits.
California will allow its emitters to use up to 239 million offsets to meet carbon caps from 2012 through 2020, but the four project types currently approved by regulators would only satisfy only one-third of the offset quota.
Sean Carney, president of Finite Carbon, said the registration of this project and potential registration of his company's pipeline of more than a dozen similar projects could help fill the gap.
"This project is the beginning of more compliance-grade supply," said Carney. "There are 13 million acres of privately owned forest inside California and 417 million acres outside of California."
Although three of the other four registered IFM projects are located in California, 34 out of the 48 IFM projects that are still under development are located outside of the state.
Pre-compliance trading of California emission allowances and carbon offset credits has been modest over the past few months but is expected to ramp up steadily following the state holds its first permit auction on Nov. 14.
After that date, natural buyers such as utilities and oil refineries will start looking for permits and offsets to meet their emission limits.