Offset Scorecard: Livestock projects dominate latest ARBOC issuances

August 13, 2014 by CaliforniaCarbon.info

CaliforniaCarbon.info, August 13, 2014: After July witnessed a record-low 35,983 offset credits issued by regulators the California Air Resources Board (ARB), the first issuance announcement for August was slightly more encouraging. A total of 171,077 ARBOCs were awarded to four projects, three of which were of the livestock digester variety. This brings the issued total under the early action and compliance programs to 11,452,278.

Livestock projects

All three livestock projects were completed under the Climate Action Reserve (CAR) early action offset program. Of the three productive project types in the cap-and-trade offset program, only livestock has yet to generate credits under the ARB compliance protocol. There are three compliance livestock projects, however, which have earned registry offset credits – TerraPass’ New Energy One (43,183, May 3) and Sunny Knoll Farms (5,005, Jul 31), as well as Alpental Energy Partners’ Blue Mountain Biogas (24,643, Jun 12).

The three early action livestock projects credited on this occasion were Willow Point Dairy (Camco), Green Meadow Farm (Camco), and Herrema Dairy (Environmental Credit Corp). The Willow Point and Herrema digesters are of the plug-flow type, while Green Meadow employs a mixed digester. Both Herrema and Green Meadow pipe methane to generators, while Willow Point sends its biogas to a boiler and/or flare. The five reporting periods credited for these three projects added 50,678 to the total scored so far under the livestock project type, which now stands at 424,733. A further 603,114 early action livestock offset credits have been listed for conversion to ARBOCs, and there are also a further 72,831 ROCs detailed above.

With three projects all receiving ARBOCs for the first time, Camco moves into the lead with 12 ARB projects. ECC moves into joint second with 11. All 12 of Camco’s projects are early action projects, while ECC has completed two ODS projects under the compliance protocol. Camco’s portfolio – 11 of 12 credited projects – is almost entirely livestock, whereas ECC has generated its credits from 7 livestock and 4 ODS projects.

ODS project

RemTec International ODS Destruction Domestic Project #1 is the sole non-livestock project credited in the first half of August. It is also the first Ozone Depleting Substances (ODS) project to score credits since ARB announced it was investigating Clean Harbors for regulatory non-compliance on May 29. This project, which was also the last ODS project to gain credits on May 27 (90,214), used a destruction facility in Bowling Green, Ohio, rather than Clean Harbors. With the award of 120,399 ARBOCs to two reporting periods, all its listed early action offset credits have now been converted into ones that can be surrendered for compliance purposes.

ODS has now generated 5,137,442 ARBOCs for the program, 3,793,854 of which have used the early action route. 4,360,595 of these credits, however, remain ‘frozen’ while ARB conducts its investigation. A further 2,756,940 ODS EAOCs have been listed for ARBOC conversion, and there are a further 282,625 ROCs. Of the latter, only 93,055 (RemTec International, generated May 22) did not involve destruction at the Clean Harbors facility.

45 days not a hard and fast guarantee

It had previously been assumed that ARB would make a determination within 45 days of receiving a compliance project submission. However, it has now emerged that in fact the onset of the 45-day period is delayed if ARB makes a request for additional information or documentation. There are now several projects that were issued ROCs well over 45 days ago and have not received ARBOCs. While it cannot be assumed that submissions to ARB were made immediately upon generation of ROCs, at least one operator has confirmed that their issuance process has been delayed by multiple requests for supplementary information.

The following projects were issued ROCs over 45 days ago (list excludes two EOS Climate Clean Harbors projects):

• A-GAS RemTec 2013-1: 93,055; May 22
• New Energy One Livestock Project: 43,183; May 3
• Blue Mountain Biogas: 24,643; Jun 12

In addition to these, there are two forestry projects whose 45-day periods (assuming timely ARB submission) would soon be lapsing:

• Hanes Ranch Forest Carbon Project: 106,812; Jul 4 (Aug 18)
• Finite Carbon-Forestland Group CT Lakes: 1,442,576; Jul 9 (Aug 23)

Verifiers

Two of the four projects – Willow Point and Herrema Dairies – issued credits on this occasion were verified at the early action stage by SES, Inc. Green Meadow Farm was verified by DNV, and the RemTec ODS project by NSF-ISR. The identities of the verifiers involved in the conversion process will not be known until ARB uploads the desk review forms next month.

SES has been involved in over three quarters of all non-forestry reporting periods to have earned ARBOCs through the early action route so far. Of the 95 periods that fit this description, SES has been early action verifier for 17, and desk review verifier for a further 57, across both the ODS and livestock project types. The next most active verifier has been NSF-ISR, who have verified 30 ODS reporting periods at the early action stage, but none at the desk review stage.

Being the only two ARB-accredited forestry verifiers in the program, SCS Global Services and Environmental Services, Inc. have both been involved with a sizeable number of projects and reporting periods. Environmental Services has verified 38 conversion-listed forestry reporting periods at the early action stage, and 16 more at the desk review stage. SCS Global Services has verified 40 conversion-listed forestry reporting periods at the early action stage, as well as 10 forestry and 8 ODS reporting periods at desk review. DNV, who have verified 37 conversion-listed reporting periods (31 forestry and 6 livestock) at the early action stage and who were recently voted best verifier for the voluntary carbon markets at an Environmental Finance survey, have only had a limited involvement in the compliance program.

For compliance projects, NSF-ISR have seen 8 reporting periods which they have verified go on to score ROCs. Ruby Canyon is next with 6. Ruby Canyon has been named as verifier for 25 compliance projects which have been listed, while NSF-ISR and Environmental Services both have 10 to their names. 24 listed compliance projects have not declared verifiers – 10 ODS, 8 forestry, and 6 livestock.

Next issuance

The next issuances of ARBOCs will be announced on Wednesday, August 27, at 12pm PT.

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