Carbon Markets and Biochar: An Offset Buyers Perspective
North American Biochar ConferenceAugust 10th, 2009
Peter WeisbergOffset Project Analyst
Outline
• Theory of offsets• How offsets could support biochar projects• Methodology issues• Current funding from The Climate Trust
Source: The McKinsey Quarterly. 2007. “A cost curve for greenhouse gas reductions.”
US Offset Market
• Trends–Fossil fuels will likely be capped–Favor domestic projects over international projects
• Destroying methane emissions• Sequestration
– Forestry– Soil Management– Biochar?
Sequestration Projects• Clean Development Mechanism
– Reforestation/afforestation only– Temporary credits
HFCs, PFCs & N2O reduction27%
Renewables35%
CH4 reduction & Cement & Coal mine/bed20%
Supply-side EE10%
Fuel switch6%
Demand-side EE1%
Afforestation & Reforestation0.4%
Transport0.2%
Expected CERs Until 2012 (%) in each category
Outline
• Theory of offsets• How offsets could support biochar projects• Methodology issues• Current funding from The Climate Trust
$ = CO2 Sequestered x Price• Low Quality US Projects
• Chicago Climate Exchange: $2-$4/mt CO2
• High Quality US Projects
• Voluntary Carbon Standard: $4-$9/mt CO2
• California Climate Action Registry: $5-$11/mt CO2
• Mature International Markets
• EU Emissions Trading Scheme: $10-$40/mt CO2
• Projections for Early US Market
• Markey-Waxman Bill : $10-$15/mt CO2
GHG Reduction Reduction Size Qualify for Carbon Finance?
Sequestration Large Yes
Fuel switch Medium Likely to be capped
Less fertilizer fewer soil emissions(N2O and CH4)
Medium/Large Hard to measure
Less fertilizer less fertilizer production
Small/Medium Indirect, hard to measure, likely to be capped
Biochar GHG Reductions
Currently Methodologies
Avoidance of methane production from biomass decay through controlled pyrolysis
• Small scale• No credit for carbon sequestration, but…• Char must be “biologically inert”
• Volatile C/Fixed C ratio lower than 50%
Next Step: Sequestered Carbon
Carbon Gold methodology for proposed to the Voluntary Carbon Standard
Outline
• Theory of offsets• How offsets could support biochar projects• Methodology issues• Current funding from The Climate Trust
Unresolved Methodology Issues
• Recalcitrance• Guarantee 100 years of permanent sequestration
• Carbon Gold: Volatile C/Fixed C ratio lower than 50%
• Soil monitoring• What happens to char that erodes out of the soils?
Unresolved Methodology Issues
• Ownership – Three entities, same reduction1. Feedstock owner 2. Pyrolysis plant3. Land owner
• Carbon Gold: Credits pyrolysis plant• Sequestered carbon can only be claimed once
Unresolved Methodology Issues
• Environmental impact– Heavy metals– Criteria air pollutants– Microbe health– Carbon already in soil
Resolved Issue: Waste Feedstocks
• Leakage– Changes in emissions outside the project
itself• Direct: Biomass fuel unavailable• Indirect: displace current farm land for biochar
feedstock plantations land use change• Carbon Gold: “biomass that would otherwise
have been left to decay or been burned in an uncontrolled manner”
Outline
• Theory of offsets• How offsets could support biochar projects• Methodology issues• Current funding from The Climate Trust
• 3 Programs• Oregon Program• Smart Energy• Colorado Carbon Fund
• 16 projects, $8.8 million in funding, 2.6 million tons of CO2 offset
• Non-profit
- Laboratory for innovative offset projects
Project Development Timeline
Proposal Due Diligence
Contract Negotiation Commercial
Operation
Annual Monitoring
Upfront Payment
Annual payment“upon delivery”
Peter WeisbergOffset Project [email protected] x 207