October 15, 2015 by Rohan Nongpiur
CaliforniaCarbon.info, October 15, 2015: (With revisions to remove an incorrect reference to the distinction for the fastest turnaround by an ARB forestry project. It was reported that this was held by Trinity Timberland’s and Finite Carbon’s University Hill improved forest management project (CAR1046) at 278 days. The project was in fact managed by Trinity Timberlands and Forest Carbon Partners.)
Yesterday’s California carbon offset (CCO) issuance announcements confirm a busy week in which ten projects were altogether awarded 4,862,441 CCOs, bringing the total issued so far to 29.32 million. While most of the issuances were awarded for early action projects, the one ARB compliance award was significant, weighing in at 4,451,645 CCOs, or roughly 15% of the total CCOs ever issued. Including the 161,510 offsets generated in Quebec, a total of 24.61 million CCOs are available for future compliance.
Two reporting periods for one of these ten projects – EOS-JA-09-01 (CAR604) – were directly issued 115,000 credits as CCO-3s, on account of a second regulatory verification having previously been completed for the same reporting period. This sees the number of CCO-3s in the program marginally rise to 4.06 million. Adjusting for previous retirements and for credits in the buffer, 3.64 million CCO-3s remain available for future compliance use, including some 306,517 whose liabilities expired last month.
White Mountain Apache Tribe celebrate mammoth issuance
The largest ever issuance by volume was announced yesterday to the White Mountain Apache Tribe Forest Carbon Project (ACR 211). It was awarded 4,451,645 CCOs, 626,793 of which proceed to the buffer for forestry reversals. This volume is almost twice the previous largest issuance, which saw Blue Source’s Bishop Improved Forest Management Project (CAR 973) gain 2,163,951 CCOs.
The reporting period for ACR211 concluded in July 2014, while all documentary uploads – as well as the ROC issuance – happened in May 2015. It took 439 days in total to complete the issuance process. The distinction for the fastest turnaround by an ARB forestry project is currently held by Trinity Timberlands’ and Forest Carbon Partners’ University Hill improved forest management project (CAR1046) at 278 days. The average turnaround for ARB forestry projects now stands at 406 days. ACR 211 used SCS Global Services as verifiers for the first reporting period, and have listed Environmental Services for its second reporting period. Until the entry of Ruby Canyon earlier this year, SCS and Environmental Services had been the only major players in the forestry verification market.
More early action forest projects receive CCOs
For the third round of issuances in a row, early action forestry projects are seeing credits finally taken off the backlog. Prior to today’s issuances, forestry accounted for 5.9 million of the 9.5 million backlogged early action credits.
Conservation Fund’s California-based Big River/Salmon Creek Forest conservation-based project (CAR408) will get 129,057 CCOs (24,831 buffered), for a single reporting period spanning January 2008 to December 2008. A balance of 129,167 has neither been retired voluntarily nor converted to CCOs. Up to a further 442,585 CRTs from an additional five reporting periods await CCO conversion, while 450,000 CCOs (86,580 buffered) for a 2012 reporting period were recently issued at the last ARB announcement.
Blue Source’s Pungo River Forest Conservation Project (CAR659) project will receive 843 CCOs (176 buffered) for a 2008 reporting period, and 822 CCOs (172 buffered) for a 2010 reporting period. These add to the 100,605 CCOs issued at the last round to seven of its eight listed reporting periods. Potentially, CAR659 has a 2012 reporting period with 13,072 CCOs-in-waiting, as well as a remainder of 10,540 CCOs awaiting conversion for its 2011 reporting period.
The recent developments mean that Blue Source, with 4,535,319 CCOs spread across 6 projects and 22 reporting periods, stays marginally ahead in terms of CCOs generated. White Mountain Apache Tribe, with 4,451,645 CCOs, jumps to second place ahead of EOS Climate, and is now only 83,674 CCOs short of Blue Source’s total. Unlike Blue Source and EOS Climate, however, it runs just the one project.
81,067 CCOs for five livestock projects
A total of 81,067 CCOs are being issued to five livestock projects this week. Of these five projects, three are managed by Camco and one by Origin Climate, while a fifth former Cargill project had its early action credits listed by holders Vitol.
Camco’s Willet Dairy (CAR977) gains 17,145 CCOs for a reporting period running from November 2013 to November 2014. A previous issuance saw 10,543 CCOs awarded for an earlier reporting period. The project was re-listed as ACR238, under the ARB protocol, in February 2015.
Other Camco projects such as the Synergy Biogas (CAR957) and Gardeau Crest Dairy (CAR978) will receive 7,924 CCOs and 12,996 CCOs respectively. Both projects previously received 7,001 and 9,058 CCOs respectively, for earlier reporting periods in 2013, with Agri-Waste Tech acting as desk review verifiers on both occasions. Camco has re-listed both projects as ACR235 and ACR241, under the ARB protocol, in early 2015.
Meanwhile, the other two livestock issuances of the day see Origin Climate’s Dairy Dreams (CAR994) receive 21,010 CCOs, and Vitol receive 21,992 CCOs for the B6 Dairy Farm BioFactory Project (CAR593). Each project’s issuance is for two reporting periods.
The B6 Dairy Farm BioFactory Project had previously seen 24,746 CCOs issued for earlier reporting periods. Vitol are the holders of the credits, Cargill is the OPO, First Environment were the EAOP verifiers, while SES were the desk review verifiers for the earlier reporting periods. On the other hand, Dairy Dreams receives 13,841 and 7,169 CCOs for its 2012 and 2013 reporting periods.
Camco has been the most active livestock project developer in the program, with over half of all livestock CCOs and almost three-fourths the livestock CCOs generated under early action. Camco has a further ten reporting periods in the early action backlog. Of its seventeen early action livestock projects, only one has not turned in early action credits for reporting periods running to the second half of 2014. Under the ARB compliance program, Camco has also listed the most projects so far with 21, only one of which has scored CCOs. Camco ran its livestock projects under early action until late 2014 before being forced to switch to the ARB protocol for 2015.
CCO-8 and CCO-3 conversions for EOS Climate
EOS Climate’s EOS-JA-09-01 (CAR604) will be receiving 149,007 CCOs for three reporting periods in 2010 and 2011. Its January 2011 reporting period will see 34,007 CCO-8s issued. The March 2010 and May 2010 reporting periods will, however, be receiving 105,000 and 10,000 CCOs respectively, which are issued as CCO-3s. CE2 Capital are listed as holders of the credits from these reporting periods.
Another ODS project managed by EOS Climate, EOS-CAR 2011 Domestic (CAR804), saw 50,000 CCOs issued to a reporting period spanning from February to April 2012. CE2 Capital were also the holders of the credits. The CE2 Capital CCOs have arrived much later than the credits listed by EOS themselves, which allowed EOS to even complete a second regulatory verification cycle on some of the credits. It is not immediately clear when the desk reviews were submitted for these projects, but, with CAR604, the listing of credits occurred over two-and-a-half years ago, in early April 2013.
The latest issuances see the early action credit pipeline dip slightly to 9.19 million. ARB has a regulatory deadline of August 2016 to complete issuing early action CCOs for all project types bar rice cultivation.
With the large forestry issuance today, the ROC pipeline dips significantly to 2.74 million. 1.81 million of these credits have been issued in the last three weeks.
Last week, prices for CCOs traded in the secondary market ascended slightly in line with the steady upward movement observed in the past few weeks. According to averaged bid and ask quotations from various brokerages, the CCO-8 gained 10 cents, moving from $10.58 to $10.68, while the CCO-3 gained 3 cents, moving from $11.22 to $11.25 Friday over Friday. Meanwhile, the Golden has gained 17 cents since Sep 1, according to our averaged OTC bid-ask medians, closing Tuesday at $11.90.
This week’s healthy issuance volume may help alleviate concerns over immediate shortage, although with the second compliance period set to bring increased offset demand, prices are unlikely to reverse.
The next CCO issuance announcement will take place on Wednesday, October 28, at 12pm PT.
Rohan Nongpiur (firstname.lastname@example.org)
Steven Neoh (email@example.com)
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