State of the Voluntary and Forest Carbon Markets 2012 Survey Now Available!

Hawaiian Airlines achieved a first this week, as the first airline to be issued VCUs under the VCS standard. They used a methodology developed by Pratt and Whitney that employs the EcoPower jet engine wash to increase the efficiency of jet engines and reduces CO2 emissions. Pratt and Whitney says that the engine wash has helped Hawaiian Airlines cut its CO2 emissions by 22,000 tCO2e while saving more than 2.5 million gallons of fuel. On average, the wash eliminates 3 pounds of CO2 for every pound of fuel saved. The project is expected to generate 506,000 VCUs annually.

– See the project on the VCS project database
– Read more about the project

New Forests Inc, the Australia-based asset management firm, has announced the launch of Forest Carbon Partners. The new initiative will focus on investing in California-compliant forest carbon projects, with expectations of financing more than 100,000 acres of forest land in the US. Not only that, but the fund has already launched into its first two transactions, covering 11,000 acres – one with one with a family forest owner and another with a Native American tribe. New Forests has yet to reveal the value of the fund or just who the investors are.

– Read more about the fund from Environmental Finance
– Read more from Hedge Week

Gold Standard has put out an announcement calling for firms’ expressions of interest to develop a carbon registry and project management system to replace its current registry operated by NYSE Blue. NYSE Blue also provides the underpinnings for the Climate Action Reserve Registry, the VCS Project Database, and operates one of three VCS registries. In January, one VCS registry administered by CDC Climat said it would phase out operations throughout 2012. The recent announcement from Gold Standard says that expressions of interest will be accepted until February 27, and the new registry is expected to launch at the beginning of 2013.

– Read more from Gold Standard (.pdf)

In New South Wales, Australia, an ongoing court ruling may require an expanding coal mine to offset its direct greenhouse gas emissions. If passed, this would be the first ruling of its kind in NSW, and would set precedent for the state’s new and expanding coal mines and coal seam gas projects. At the center of this landmark court case is the Ulan coal mine, a joint venture between Xstrata Coal and Mitsubishi Development. If Ulan expands as planned, its direct emissions would amount to approximately 100,000 tonnes of CO2 per year, according to sustainability consultant, David Blythe. In total, Ulan’s emissions would be expected to reach about 575 MtCO2. While the mine argues that being forced to offset emissions is discriminatory toward the Ulan mine, the NSW court considers the carbon offsetting requirement not necessarily so. “As other operating coal mines seek approval to modify or extend their operations, or new coal mines are opened, it would be open to the consent authority which may be the (planning) Minister, to impose a similar condition,” Justice Nicola Pain said at the November 24th decision.

– Read more from Eco Business

The Ghanian Gyapa cookstove project, developed by ClimateCare with local partner Enterprise Works, has claimed a milestone for generating 250,000 Gold Standard carbon credits – the largest ever issuance of Gold Standard carbon credits for cookstoves. Buyers of the carbon credits include large corporations such as Barclays and Jaguar. Climate Care reports that the project has seen the number of cookstoves rise from 10,000 in 2008 to over 75,000 in 2011. However, Climate Care has also stated that they still feel held back by lack of demand in the voluntary carbon market. “We’re not finding it difficult to get people to work with us on these projects, but the scale that we’re talking about could be much, much larger if we had more demand from visionary, large corporates.”

– See the ClimateCare press release (pdf)

Situated on the Colombian-Panamanian border, project developer Anthrotect’s Chocí³-Darién Corridor carbon offset project has received validation under the Climate, Community and Biodiversity (CCB) Project Design Standards from Scientific Certification Systems (SCS). The REDD project achieved CCB Gold Level status for providing “exceptional” social and biodiversity co-benefits to the local Afro-Colombian and indigenous landowners, with 50 percent of net profits generated by the project going to local communities. “Carbon assets generated through forest stewardship are one of the most promising economic alternatives for Afro-descendant and indigenous peoples in Colombia,” said Brodie Ferguson, Founder of Anthrotect. Over its 30-year lifespan, the project is expected to provide emission reductions of over 2.3 MtCO2e on the 13,500 hectares of forest.

– Read more about the project

Results from a survey jointly administered by the Carbon Trust and Guardian news show that for the upcoming year, 58 percent of public sector respondents plan to make “tangible investments” in carbon reduction, versus 46 percent of business sector respondents and 33 percent in the voluntary sector. The survey also reveals that carbon reduction, as a priority, has slipped across the board, due to the financial downturn squeezing budgets. More than a fifth of government agencies surveyed and nearly two-fifths of businesses surveyed report making carbon reduction a lower priority. Richard Rugg, the Carbon Trust’s Director of Carbon Programs, believes that in the face of the poor economic conditions experienced in the past year, the fact that many organizations keep carbon reduction a priority serves as a testament to “the huge emphasis on the business case for carbon reduction.” Rugg cites as evidence the Trust’s list of 300 public sector organizations, which could save £400m through energy efficiency and other carbon reduction investments.

– Read more from the Guardian

Carbonfund.org’s first annual “For Planet and People Awards” formally recognizes a few of the environmental organization’s partners for taking a leadership role in combating climate change. Awardees were chosen by Carbonfund.org’s Board of Directors and staff for including carbon reduction goals in their operations and sustainability goals along a variety of dimensions. Recipients include Motorola Mobility in the CarbonFree category, JetBlue Airways in the travel category, and The National Geographic Society in the media category. Other awardees include Overstock.com, the Unitarian Universalists, Mac-Gray Campus Solutions, and Ernst & Young. Dell was honored with the Lifetime Achievement award. Since 2003, Carbonfund.org has worked with over 2,000 businesses to advance renewable energy, energy efficiency and forestry projects.

– Read more about the award winners

If you found yourself trying to explain the concepts of “additionality” and “baselines” to your neighbor, do you think you could do a good job? Would you have to fall back on terms like “business as usual”? The Greenhouse Gas Management Institute’s Michael Gillenwater thinks that we should be able to explain additionality beyond relying on the phrase “the project would not have occurred otherwise.” He expects that you might struggle to explain the concept more than you think, but wants to help. He’s written a three-part series explaining the why’s and how’s of additionality, with a great third paper that goes beyond the world of strict carbon offsetting to explain additionality in the wider world of ecosystem service markets. If you don’t have time to delve into three papers, his blog post offers an overview.

– Read the reports from GHGMI

CO2 Australia, a project developer focusing on terrestrial carbon projects, reports that it has seen a 681 percent increase in the number of landholders exploring carbon sink project opportunities. CO2 Australia credits the launch of the government’s Carbon Farming Initiative, a program that would allow Australian landholders to sell carbon credits into the country’s emerging cap-and-trade program, as well as into international markets. Most projects would involve the planting of mallee trees, a native species that is drought- and fire-resistant. In addition to the possibility of additional revenue from carbon credits, CO2 Australia notes that farmers realize the other benefits of terrestrial carbon sinks, including decreased soil erosion, salinity, and waterlogging.

– Read more about CFI project interest

Programmes of Activities (PoAs) – projects that group hundreds to thousands of small project activities – will now get some financial support from KfW’s new Future of the Carbon Market Foundation. With KfW’s new fund, payments to projects be given upfront for projects, and will be paid back with the credits. The state-owned German banking group has put an initial $13 million into the program. PoAs provide a way of scaling up small-scale emissions reductions activities, especially in countries that are unable to develop large reductions projects. Amid concerns that carbon finance is eluding the poorest countries, the EU will after 2012 only accept offsets in the poorest countries. However, only 14 PoAs have been registered, and none have been issued credits—a problem which has been traced to the fact that developers get paid for credits only after they deliver a project.

– Read more about KFW’s investment

Aboriginal Australian’s will have the opportunity to take part in a program designed to enable indigenous landholders to take up the Federal Government’s $22 million from the Indigenous Carbon Farming Fund challenge. Environmental group Greening Australia, along with non-profit carbon services group Canopy, hosted a three day workshop last week for members of the Ngarrindjeri people, to help communities understand climate change and the new carbon market – including workshops on developing a viable biodiverse carbon sink. Five more workshops are planned for aboriginal communities in South Australia. “We’ve been really happy,” says Greening Australia senior vegetation consultant Mick Durant. “They’ve (participants) really taken it on board and are quite interested in the idea.”

– Read more from the Stock Journal
– Read more form ABC Australia

Since 2010 Washington Gas Energy Services (WGES) has been offsetting part of their customer’s natural gas usage through the CleanSteps Carbon Offsets product. WGES teamed up with Sterling Planet and the Chesapeake Bay Foundation (CBF) to deliver local, certified carbon offsets, acheiving 25,000 tonnes of reductions to date. The partnership has also resulted in $150,000 in combined contributions from WGES and Sterling Planet to the CBF’s Carbon Reduction Fund, with plans to develop a land-use management project for the CleanSteps program in the future, and is also looking to undertake four tree planting projects that will sequester carbon while improving the health of the famous watershed. Currently, CleanSteps will offset 3.5 percent for small commercial customers and 5 percent for households, with an additional option to offset 100 percent of natural gas usage.

– Visit the CleanSteps website
– Read more from MarketWatch

Omar Samra, the much celebrated mountain climber from Egypt and founder of the Wild Guanabana sustainable tourism company, is making news in both the outdoors and voluntary carbon worlds. By the end of 2012, pending sponsorship, he will be the first Egyptian to summit the world’s seven highest peaks – and while doing so, he plans offset each of his expeditions completely, purchasing offsets for his flights, power consumption, transportation, and accommodation. Samra is partnering with Dubai-based Advanced Global Trading to calculate and purchase the offsets. As an avid outdoorsman, he is reportedly very attuned to the effects of climate change, and feels compelled to take part in efforts against it. He says that he hopes that the carbon trades will “support and encourage more green projects throughout the world.”

– Read more about Samra’s offsetting journey

Northeastern states are busily reviewing their involvement in the Regional Greenhouse Gas Initiative (RGGI). Massachusetts was looking to address the issue of allowance oversupply, and agreed to retire 1.68 million allowances last month. The state noted the benefits it had received from the program, netting approximately $150 million in proceeds from RGGI auctions – and investing 80 percent of that into energy efficiency programs; dedicating about $17 million to the 86 cities and towns designated as “Green Communities”; and creating 3,800 jobs as a result. While Massachusetts’ legislature was largely positive about the program, New Hampshire’s was busy trying to repeal it – despite the protest of those attending a public hearing on the issue. Those opponents point to the $34 million for energy conservation and efficiency projects, $1 billion in energy savings and thousands of jobs created. The bill being debated would have New Hampshire back out of the RGGI program at the start of the second compliance period in 2015.

– Read more from Massachusetts
– Read more from New Hamshire

After pulling out of the Western Climate Initiative (WCI) last year, New Mexico has now repealed its statewide emissions cap. The regulations, approved by the state’s Environmental Improvement Board (EIB), would have called for all stationary facilities emitting more than 25,000 tons of CO2 per year to reduce their emissions by 2 percent per year until 2020. Governor Susana Martinez, elected in 2010, replaced members of the EIB, who then undertook a review of the program. The EIB agreed with industry groups and the governor, who argued that the program was an unjustifiable economic burden on the state.

– Read more from ChemInfo
– Read more from New Mexico Business Weekly

California’s plan to build state-of-the-art high speed rails ran into growing public and political opposition, in large part due to its hefty price tag. Now, the state’s governor, Jerry Brown, is allocating $1 billion in fees collected through the upcoming cap-and-trade program toward high speed rail. The governor came under fire for also suggesting that fees could go towards filling California’s gaping budget surplus, and not only toward programs intended to cut emissions. Dorothy Rothrock, senior vice president of the California Manufacturers and Technology Association, disagrees with the decision, saying that the funds should be used to cover any unexpected program costs or to help contain leakage.

– Read more from the San Francisco Chronicle
– Read more from the LA Times

China has historically been the largest supplier of CDM credits into the EU ETS, with 484 million carbon credits issued by January 9, largely from hydro and wind power projects. But now with CER prices plunging EU companies are refusing to pay prices negotiated before the prices fell, and are looking for loopholes to get them out of the EU$10 contracts they signed in previous years. As European firms default, Chinese CDM projects which rely on carbon revenue for 20% of their income, are in danger of faltering. With projects and the market in doubt, investor confidence is low, although there is a chance that China’s emerging pilot cap-and-trade programs could rescue many of the projects. But some CDM developers aren’t feeling the crunch as much, especially those that signed contract with large energy utilities or financial institutions.

– Read more form China Daily

The international community is still fussing about the EU’s aviation emission rules, which would impose a levy on all airlines flying through Europe. BASIC countries issued a joint statement objecting to the inclusion of their aviation markets in the EU ETS, with China going so far as to ban airlines from joining the system. The US senate has overwhelmingly approved a bill that included a congressional statement opposing the EU rules, and President Obama has also stated his opposition to the rules. The US represents the largest aviation market, while China represents the fastest growing market. Both are confident international courts will exempt non-EU nations from the levy. Meanwhile, the market for carbon permits used by airlines is moving forward. ICE Futures announced that they will launch European Union carbon permits for the aviation sector, to be known as European Aviation Allowances (EUAAs) later this month, pending regulatory, while EEX announced that it would launch a derivatives and spot market for EUAAs mid-year, and commodity Exchange Bratislava (CEB) launching a trading platform for the credits at the end of February.

– Read more about ICE’s EUAAs

Last week, the State of Rio de Janeiro took a step, hand-in-hand with its private sector, toward establishing emissions reductions goals. Before Rio+20 in June, the main polluting industries in the state of Rio may face customized emissions limits by industry. The target? Achieving Rio’s 2005 baseline by 2030. While specific reductions are not yet defined, the State Secretary of the Environment, Carlos Minc, emphasized that they will be determined through a process of negotiation with companies, who will then commit to these goals. Rio’s new carbon market Bolsa Verde de Rio de Janeiro, which was launched in December of 2011, will allow companies to purchase carbon credits to offset their excess emissions. Non-compliance will be met with a fine.

The challenge for the state of Rio is that industrial production is expected to double by 2030. “It is even with the incredible growth of heavy industries like oil and steel that we are going to return to the 2005 baseline, said Minc. As the first initiative of its kind in Brazil, Rio looks to establish itself as the main carbon credit trading market in the country, and expects to attract investments from across the Mercosur region. One Brazil market player reports to Ecosystem Marketplace that the carbon marketplace has already begun preparing for this and other regulations – noting that brokers and other financial intermediaries can be seen setting up shop with an eye on Rio and Sao Paulo markets.

South Korea’s proposed emissions trading scheme for 2015 cleared a major hurdle when it was passed by the country’s National Assembly on Climate Change. Having achieved approval from this key committee, the proposed legislation must now go before the national Legislation and Judiciary Committee, and then the Parliamentary Plenary Session (recently delayed), before it can be signed into law. The planned legislation consists of a national cap and trade, which would be applied to 500 of South Korea’s most carbon-intensive firms. To appease industrial firms, South Korea’s government has said that 95% of the allowances distributed between the first two phases of the scheme (2015-2017 and 2018-2020) will be provided for free. If the legislation is passed into law, South Korea’s could be the third carbon market in the Pacific Region, following Australia and New Zealand, which opens up the possibility for a potential linking of schemes and international trading of its allowances.

– Read more from Business Green

With its North American neighbors Canada and the USA exploring state-level cap-and-trade, Mexico is close to passing legislation that would create a national carbon trading program. The program is expected to link up with California’s program, which begins this year – but Mexico’s program must first be debated and voted on by the Chamber of Deputies. If passed, a federal climate commission would be created to develop and implement national climate change policies and the domestic cap-and-trade program. Mexico received World Bank funding to develop a carbon market after the Cancun climate negotiations in 2010 as part of the Partnership for Market Readiness, but have yet to submit their “Market Readiness Proposal,” which will outline how the cap-and-trade program will function.

– Read more form Clean Technica

Brazil’s Ministry of Environment and Brazilian Development Bank recently announced a new line of credit to support emissions reductions under the National Climate Change Fund. “The Climate Fund is one of the main instruments in Brazil’s climate change policy,” says Minister of Environment Minister Teixeira. “By 2014 it has the potential to provide up to €0.44 billion in financing to support Brazil’s national commitment to reducing greenhouse gas emissions.” Financed primarily by Brazil’s oil exploration revenues, 90 percent of projects to receive financing will be in eligible sub-programs, like efficient transportation models, renewable energy, waste with energy potential, and vegetal charcoal. The fund is targeted toward investments from a variety of actors at the private, municipal and state levels.

– Read more from Biofuels International

Australia is trying to figure out how to make sure inexpensive international offsets don’t undermine the country’s $15 price floor. Currently, a so-called “top-up” mechanism will allow regulated Australian businesses to use international credits, but only after a charge has been applied to ensure that those credits are priced above the established price floor. The International Emissions Trading Association is asking the Australian government to consider another option – a charge based on observed international prices at the time that the offset is surrendered. This option would allow firms to lock in the charge for the future surrender of offsets based on the current observed international price. Draft regulations being released in the coming months should provide more clarity on the way international credits will fit into the Australian program.

– Read more form Reuters