The Air Resources Board (ARB) is scheduled to make a final determination about whether to include forestry projects from Alaska this summer, an ARB spokesman confirmed.
The ARB, the cap-and-trade regulator, has been revising some of its offset protocols since the middle of last year. Specifically, the ARB has been looking to make revisions to the rice cultivation and forestry protocols. The ARB’s board of directors heard staff recommendations on those protocols in September and December.
The forestry amendments would make technical tweaks and expand the protocol to include projects from Alaska. The ARB initially did not allow projects from Alaska, because it did not have the necessary data from the state. The ARB said it now has the required regional data.
An ARB spokesman said a final vote on the measure would likely come during the board meetings in either June or July. If that happens, Alaskan forestry projects could be eligible by late 2015 or early 2016.
Some offset developers have pushed for the ARB to move forward with the Alaska inclusion at a faster schedule, because the state could bring a significant number of credits to the California market.
Estimates have pegged the carbon sequestration in Alaska to be around 22-30mtCO2e per acre. According to the state’s division of forestry, Alaska has approximately 126m acres of forest land.
Forestry projects have been the biggest driver of the offset supply, bringing in 8m of the 16m total credits, according to ARB data. Ozone-depleting substance credits make up most of the remaining 8m credits issued by the ARB. The American Carbon Registry and the Climate Action Reserve, the programme’s two main voluntary registries, do not currently have any projects listed in Alaska.
Participants said the market for offsets is still growing in California despite only 1.68m offsets being surrendered during the first compliance deadline in November (see EDCM 22 December 2014). Most of those credits came from oil companies Chevron and Valero.
However, most traders said the market for offsets will continue to grow this year as fuel and natural gas suppliers get more active in the market and allowance prices rise.
Offsets with protection against invalidation are trading in the $10.25-10.50/tCO2e range. Front-month vintage 2015 credits are valued around $12.75/tCO2e, according to InterContinental Exchange data. Dan X. McGraw