US: First rice cultivation offset project listed in California

17 March 2014 18:52 Source:ICIS

An offset developer listed California’s first rice cultivation project on Monday with the American Carbon Registry, as regulator Air Resources Board (ARB) continues to debate whether to adopt the protocol later this year.

The ARB is scheduled to approve the rice cultivation and coal mine methane protocols this September. If it approves rice cultivation, the project listed by Terra Global Capital could be the first of this type eligible for ARB offset credits, or ARBOCs.

The protocol, which removes methane emissions generated by flooded rice fields, is not expected to bring a significant supply of ARBOCs to the California market, brokers and traders said.

The Terra Global project covers 5,000 acres in the Sutter, Colusa and Glenn counties in northern California’s Sacramento Valley, and it is expected to have reduced greenhouse gas emissions by over 6,700 tonnes of CO2 equivalent (tCO2e) since September 2011.

The project has not yet been independently verified by a verification company, a requirement under ARB offset rules.

Terra Global funded the project through a US Department of Agriculture and Natural Resources Conservation Services grant and private backers. The offset developer also worked with the Environmental Defense Fund, the California Rice Commission and White River Irrigation district while developing the project.

Traders said carbon offsets are seeing weak demand due to the low allowances prices in the California carbon market. Because of those low prices, carbon offsets have hovered in the $8.00-$10.00/tCO2e range. Dan X. McGraw

By Dan X. McGraw