1. Carbon Markets and
Biochar: An Offset
Buyers Perspective
North American Biochar Conference
August 10th, 2009
Peter Weisberg
Offset Project Analyst
pweisberg@climatetrust.org
503-238-1915
2. Outline
• Theory of offsets
• How offsets could support biochar projects
• Methodology issues
• Current funding from The Climate Trust
4. Source: The McKinsey Quarterly. 2007. “A cost curve for greenhouse gas reductions.”
8. US Offset Market
• Trends
–Fossil fuels will likely be capped
–Favor domestic projects over international projects
• Destroying methane emissions
• Sequestration
– Forestry
– Soil Management
– Biochar?
9. Sequestration Projects
• Clean Development Mechanism
– Reforestation/afforestation only
– Temporary credits
HFCs, PFCs & N2O
reduction
27%
Renewables
35%
CH4 reduction & Cement &
Coal mine/bed
20%
Supply-side EE
10%
Fuel switch
7%
Demand-side EE
1%
Afforestation &
Reforestation
0.4%
Transport
0.2%
Expected CERs Until 2012 (%) in each category
10. Outline
• Theory of offsets
• How offsets could support biochar projects
• Methodology issues
• Current funding from The Climate Trust
11. $ = CO2 Sequestered x Price
•Low Quality US Projects
• Chicago Climate Exchange: $2-$4/mt CO2
• High Quality US Projects
• Voluntary Carbon Standard: $4-$9/mt CO2
• California Climate Action Registry: $5-$11/mt CO2
• Mature International Markets
• EU Emissions Trading Scheme: $10-$40/mt CO2
• Projections for Early US Market
• Markey-Waxman Bill : $10-$15/mt CO2
12. GHG Reduction Reduction Size Qualify for Carbon
Finance?
Sequestration Large Yes
Fuel switch Medium Likely to be capped
Less fertilizer fewer
soil emissions
(N2O and CH4)
Medium/Large Hard to measure
Less fertilizer less
fertilizer production
Small/Medium Indirect, hard to
measure, likely to be
capped
Biochar GHG Reductions
13. Currently Methodologies
Avoidance of methane production from
biomass decay through controlled
pyrolysis
• Small scale
• No credit for carbon sequestration, but…
• Char must be “biologically inert”
• Volatile C/Fixed C ratio lower than 50%
14. Next Step: Sequestered Carbon
Carbon Gold methodology for proposed to
the Voluntary Carbon Standard
15. Outline
• Theory of offsets
• How offsets could support biochar projects
• Methodology issues
• Current funding from The Climate Trust
16. Unresolved Methodology
Issues
• Recalcitrance
• Guarantee 100 years of permanent
sequestration
• Carbon Gold: Volatile C/Fixed C ratio
lower than 50%
• Soil monitoring
• What happens to char that erodes out of
the soils?
17. Unresolved Methodology
Issues
• Ownership – Three entities, same reduction
1. Feedstock owner
2. Pyrolysis plant
3. Land owner
• Carbon Gold: Credits pyrolysis plant
• Sequestered carbon can only be claimed once
19. Resolved Issue: Waste
Feedstocks
• Leakage
– Changes in emissions outside the project
itself
• Direct: Biomass fuel unavailable
• Indirect: displace current farm land for biochar
feedstock plantations land use change
• Carbon Gold: “biomass that would otherwise
have been left to decay or been burned in an
uncontrolled manner”
20. Outline
• Theory of offsets
• How offsets could support biochar projects
• Methodology issues
• Current funding from The Climate Trust
21. • 3 Programs
• Oregon Program
• Smart Energy
• Colorado Carbon Fund
• 16 projects, $8.8 million in
funding, 2.6 million tons of CO2
offset
• Non-profit
- Laboratory for innovative
offset projects
23. Project Development Timeline
Proposal Due
Diligence
Contract
Negotiation Commercial
Operation
Annual
Monitoring
Upfront Payment
Annual payment
“upon delivery”