Small Timber Players Get a Way to Sell Carbon Offsets
BY RYAN DEZEMBER - WSJ
One of the country’s largest forest-carbon firms is launching a platform to enable owners of Southern timberland to sell carbon offsets on properties as small as 40 acres, expanding a market that has mostly been limited to owners of vast wooded tracts.
Finite Carbon, which is majority owned by energy
giant BP , said it would begin to enroll landowners in 13 Southern states in the program this month.
Landowners will be paid quarterly if they agree not to cut down trees for 20 years and then maintain a steady volume of standing timber on their property for another two decades. The trees must be big enough to be salable at the time the no-cut contract is signed.
Finite has arranged more than $900 million of forest-carbon deals for large U.S. landowners such as timberland investment firms and tribes, dispatching foresters to remote woodlands to measure trees and calculate how much carbon is held on properties that are tens of thousands of acres.
That is only economical for big tracts, so Finite is using Forest Service data, satellite imagery and computer programs to determine how many offsets smaller landowners can sell if they promise not to cut, said Finite Chief Executive Sean Carney.
Mercuria Energy Group
agreed to buy the offsets through a Tennessee startup that the Swiss commodities trader backs called LandYield .
Mercuria plans to hold some of the forest credits—each representing a metric ton of sequestered carbon—to offset emissions generated by its fossil-fuel businesses and to sell the rest to other companies looking to reduce their own carbon footprints, said Josh Fain, Land-Yield director of operations.
There are several ways to generate carbon offsets, which are awarded for reducing greenhouse gases. The most popular in the U.S. are associated with forgoing wood harvests so that trees can keep sucking carbon dioxide from the atmosphere as they grow.
Forest offset guidelines developed by regulators in California for the state’s cap-and-trade emissions market have spread to unregulated markets. Firms such as Finite broker so-called voluntary offset deals between landowners and companies.