The Forest Protocol & Project Case Study Alligator River Avoided Conversion Project
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Transcript of The Forest Protocol & Project Case Study Alligator River Avoided Conversion Project
The Forest Protocol & Project Case StudyAlligator River Avoided Conversion Project
California Cap-and-Trade WorkshopClimate Action ReserveJune 14, 2011
CONFIDENTIAL - Subject to NDA2 | Blue Source | A Leading Climate Change Portfolio
Overview
About Blue Source
Forestry Project Commercialization using the CAR Protocol Case Study: Alligator River Avoided Conversion Project
Forestry’s Role in the Carbon Markets
CONFIDENTIAL - Subject to NDA3 | Blue Source | A Leading Climate Change Portfolio
About Blue Source
Carbon Credit Portfolio
Leading domestic project development and marketing for over 10 years
100-200M tonne portfolio (function of specs) Have sold over 20M tonnes over the past 10 years Projects sourced from 49 states and most provinces in Canada Transacted what is believed to be the largest volume voluntary
sale to date (9,000,000 tCO2e) Transacted what is believed to be the highest value voluntary
sale to date ($12,000,000) Federal and state carbon advocacy leadership Developed the first protocols in numerous carbon categories More CAR listed forestry projects than any other developer
Blue Source has built the largest portfolio of North American emission reduction credits and projects.
CONFIDENTIAL - Subject to NDA
Forestry Project Commercialization using the CAR Protocol
Feasibility Study / Due Diligence
Project Submittal Form
Forest Carbon Inventory – Design and Implementation
Management Plan
Project Design Document (PDD) Development
Verification
Registration
Marketing
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Blue Source has extensive experience in creating and selling tonnes in the market. Speed, technical knowledge, and pricing strategies are central to the service offering
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Alligator River Avoided Conversion Project
Native forest stands consisting of mixed pine and bottomland hardwoods
Pre-sold tonnes to help achieve near term revenue to landowner
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2,750 Acres in Hyde County, NC
Permit to convert to agriculture
Based on anticipated carbon revenue decided to protect forest via easement instead
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Alligator River Avoided Conversion Project
A lot of steps: Designation of Authority Form Project Submittal Form Attestation of Title Boundary Map Signed Easement Inventory Growth Model Monitoring Plan Project Design Document First Verification Project Implementation Agreement Initial Registration of Tonnes Marketing of Project Ongoing monitoring/verification Transfer of Tonnes to Buyer
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Process to date: First biomass CRTs issued Verification of first soils-based CRTs
underway (ARB stakeholder call confirmed inclusion)
First-of application of protocol – many delays but will be a model for others to follow
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Forestry Demand
Offset Type (% Volume) Traded in Global Voluntary Market in 2010
Forestry garnered 42% of the market, a total of 29 MtCO2e.
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Forestry Supply
Domestic forest offset projects have gained momentum due to primacy as a compliance grade offset in draft regional and federal legislation, strong demand in the voluntary market and inclusion of forestry protocols in all domestic registries.
Vast landscape of project types and geographic diversity Improved Forest Management (IFM) Avoided Conversion (AC / REDD) Afforestation Reforestation
Potential volume on par with CCS or Renewable Energy 320 MT/yr US supply (McKinsey, 2007)
Challenges exist in aggregating numerous small projects and landowners
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• No up-front, out-of-pocket costs
• Full forest + carbon inventory and assessment
• 10-year FSC management plan and certification
• 100% of FSC-certified wood product revenues
• 50%+ of forest carbon revenues – important new source of annual cash flow
• Inclusion in landscape-scale conservation project designed by TNC
Landowner Benefits
• Focus and protect public/private investments
• Active and engaged landowners
• Repair degraded forests; maintain desired conditions
• Keep working landscapes working and in private ownership
Public Benefits
Blue Source – The Nature Conservancy ‘Working Woodlands’ Program
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Blue Source Transaction Structures
Unit-Contingent
Portfolio Firm
Pre-Compliance Diversification
Options
Upfront Financing Considerations
Fixed and Variable Pricing
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Thank You!
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Kevin TownsendChief Commercial OfficerBlue Source P: 801.438.1540E: [email protected]