Breaking Barriers: Giving Family Forest Landowners More Access to Carbon Markets

In a groundbreaking collaboration, Finite Carbon and LandYield are revolutionizing the voluntary carbon market (VCM) by breaking barriers and opening new opportunities for family forest landowners to benefit from carbon credits.

Finite Carbon is a North American developer of forest carbon offsets and BP acquired a majority stake in Finite Carbon back in 2020 for an undisclosed amount. The company has developed over 3.9 million acres of high-quality forest carbon projects.

LandYield, a newly founded Tennessee startup, aims to give family forest owners access to carbon markets. Their goal is to give them the opportunity to earn by keeping their forests standing, enhancing carbon sequestration and forest value.  

Their collective expertise will simplify carbon revenue opportunities for non-industrial landowners, starting in 13 southeastern states in the U.S. Together they launched a new initiative called CORE Carbon platform for landowners to efficiently enroll into a carbon offset program.  

A Platform for Verified Forest Carbon Credits

Family or non-industrial forest landowners own about 275 million acres of forestlands. But fewer than 1% of them benefit from the carbon market. 

The new platform seeks to bring that percentage up by allowing landowners with 40 to 5,000 acres of forestland to earn extra income from carbon credits, otherwise called carbon offsets. Those who are eligible can start enrolling in the program. 

Here are the two key features of the program:

Flexibility: landowners may decide to enroll just a part of their land in the program. They can also continue doing commercial activities in the enrolled land like gathering non-timber products and leasing rights to hunters. 

Financial benefit: landowners will get quarterly compensation through carbon credits if they comply with the program’s reporting and monitoring requirements. The CORE Carbon platform manages and simplifies the process via its dashboard.

Leveraging Finite Carbon’s software and remote sensing expertise, the CORE Carbon platform features an advanced, easy-to-use digital mapping tool for landowners. It aids them to come up with a free carbon revenue proposal for their forestland while providing ongoing project management.

The program is also using satellite imagery and data from the U.S. Forest Service to keep track of forest growth. This information is crucial for measuring the exact amount of carbon emission reductions and removals resulting from improved forest management practices on enrolled forestland.

Accurate monitoring and reporting of carbon stocks is vital for generating verified and quantifiable carbon credits. 

The carbon offset projects are verified under the American Carbon Registry’s scientific methodology – Improved Forest Management on Small Non-Industrial Private Forestlands (SNIPFL) – specifically meant for family forests.

Supplying high-quality forest carbon offsets, falling under nature-based solutions, is even more critical today when criticism against them turns heavier.

The launch of the CORE Carbon platform comes at perfect timing. It can help address issues in producing quality forest offsets, which can bring the prices up again.

Breaking Barriers to Financial and Climate Benefits

To perform all the necessary tasks, Finite Carbon has delivered over $900 million in forest carbon deals. These collaborations involve forestland investment firms, nature conservation groups, and foresters. 

The company’s partnership with LandYield in launching the carbon program is yet another important milestone. Highlighting its significance, Finite Carbon CEO, Sean Carney, said:

“We’re excited to team up with LandYield to create long-term, mutually beneficial relationships with a broad range of landowners by providing a financial incentive for their environmental stewardship so people can enjoy their land for generations to come.”

LandYield delivers the payments to enrolled landowners who defer timber harvests and enhance their lands’ carbon sequestration abilities. 

By committing to make notable forest management changes, landowners contribute to long-term climate benefits. This 40-year commitment involves growing their forests for 20 years and keeping them standing for another 20 years. 

The platform enables LandYield to provide landowners with instant estimates of how much income they can potentially earn with carbon credits

LandYield benefits from the support of Mercuria Energy Group, one of the world’s largest independent energy and commodity groups, which plans to buy the offsets they generate. Mercuria intends to use the forest carbon credits to offset emissions of their fossil-fuel businesses. They will then sell the rest to other companies looking to cut their own carbon emissions.

The carbon program is initially open for landowners in the southeastern US, which boasts up to 120 million acres of family-owned forest land. The region includes Florida, Georgia, South Carolina, North Carolina, Virginia, Tennessee, Kentucky, Alabama, Mississippi, Arkansas, Louisiana, Texas, and Oklahoma. The program will cover other parts of the country as it expands. 

Last year, a similar program was launched by the American Forest Foundation – the Family Forest Carbon Program. The program seeks to help family forest landowners with as little as 30 acres gain access to the $2-billion carbon market.

By breaking barriers and offering financial incentives for environmental stewardship, Finite Carbon and LandYield have taken a significant step towards promoting nature-based solutions and sustainable forest management. Their initiative is a win-win solution for both landowners and the planet, fostering a greener future for generations to come.

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Nikola Wins $58M Total Grant for Hydrogen Stations; First Hydrogen Reveals Success of FCEV 630km Range

Nikola Corporation, a global leader in battery-electric and hydrogen fuel-cell electric vehicles (FCEV), and energy solutions, secured an additional $16.3 million grant to help fund its hydrogen fueling stations. This new grant gives Nikola a total of $58.2 million to support its hydrogen infrastructure.

Last month, the California Transportation Commission (CTC) awarded Nikola, through its HYLA brand, a $41.9 million grant under the Trade Corridor Enhancement Program (TCEP) to build 6 heavy-duty hydrogen refueling stations across Southern California. 

Each hydrogen refueling station is designed to support and scale up the growth of heavy-duty commercial hydrogen refueling needs. 

Nikola also announced a milestone of 202 sales orders for its Class 8 hydrogen fuel cell electric trucks, reflecting a growing industry trend towards sustainable solutions.

In Canada, First Hydrogen announced that the road test results of its FCEV are even better than what’s expected. Feedback from the trial is promising, asserting the viability and sustainability of hydrogen energy

Is Hydrogen The Next Gold Rush? 

As the world is in dire need of reducing carbon emissions, innovations for alternative energy sources are ramping up. Hydrogen is one of those alternatives, particularly in providing a cleaner option for the transportation industry. 

Unlike fossil fuels that release planet-warming gasses, hydrogen fuel can be 100% clean, depending on the process used to burn it. In a hydrogen fuel cell EV, hydrogen is burned with pure oxygen in specially made cells. The only by-product is water.

Projections also indicate that hydrogen fuel will play a key role in the coming decades. Experts predict that the global hydrogen market will reach about $231 billion by 2030.

Regular EVs and FCEVs share many of the same advantages and disadvantages. Moreover, hydrogen-powered vehicles often have the same range as their traditional gas-powered counterparts.

A longer-range battery EV also requires a longer charging time. In contrast, refueling a hydrogen vehicle is the same as how a driver fills up his car at a gas station.

Some vehicle manufacturers are even betting on hydrogen by developing hydrogen fuel cell vehicles like Toyota recently revealed. But of course, hydrogen refueling infrastructure remains limited and lags behind EV battery charging infrastructure. 

Still, a few countries have made hydrogen energy a core of their clean energy transition.

And Nikola is taking the lead in making hydrogen refueling easier and more widely available through its HYLA stations.  

Nikola: The First-Mover of Hydrogen Stations

As a global manufacturer of zero-emission battery-electric and hydrogen-electric vehicles, energy solutions, and hydrogen stations, Nikola is revolutionizing the industry. 

The additional grant it recently received from CTC builds on Nikola’s partnership with Voltera to develop up to 50 HYLA hydrogen stations in North America over the next 5 years. 

The previous grant of almost $42 million was sponsored by the California Department of Transportation (Caltrans). Caltrans’ support of Nikola promotes its zero emission vehicle (ZEV) adoption of freight technology across the state. 

In appreciation of the massive support it’s getting from the state agencies, Nikola Energy president Carey Mendes said that:

“The California grant awards and government funding demonstrate the strong support for the Nikola hydrogen infrastructure brand HYLA’s mission of establishing a comprehensive zero-emission transportation solution to help fleets achieve climate goals…”

Mendes further said that they’re prioritizing developing a hydrogen ecosystem that advances their hydrogen fuel cell electric truck deployment.

These grants are a key enabler for Nikola’s first-mover zero-emission hydrogen fleet and its HYLA fueling stations. The company is also planning to develop an open network of commercial refueling infrastructure in California and eventually across North America.  

With the recent grant announcement, Nikola stock is up 459% from its recent lows as shown in the chart from TradingView.  

First Hydrogen: A Testament that FCEV Works

Back-to-back with Nikola’s announcement is First Hydrogen Corporation’s revelation that its hydrogen-fuel-cell-powered vehicle (FCEV) has achieved a range of 630 km on a single refueling during its fleet trial with UK-based SSE Plc.

First Hydrogen is a Vancouver and London-based company focusing on zero-emission vehicles, green hydrogen production, and supercritical CO2 extractor systems.

SSE, one of the UK’s largest energy infrastructure firms, is the first to road test First Hydrogen’s hydrogen-powered vehicles. 

Data from SSE trial shows that overall vehicle performance beat expectations by exceeding the results set in pre-trial commissioning tests. Results further suggest that heavier payloads and driving at higher speeds don’t significantly reduce the range or impact fuel cell performance. 

Highlighting these remarkable achievements of First Hydrogen’s FCEV vans in real-world conditions, SSE Head of Fleet Services, Simon Gray, says:

“SSE is focussed on enabling, harnessing and deploying new technologies and innovations which can accelerate the journey to net zero. The feedback from this trial will be invaluable when considering if hydrogen fuel cell electric vehicles could fit into our fleets of the future.”

These recent developments in the hydrogen market, particularly on FCEV and hydrogen refueling infrastructure seem to confirm that 2023 is indeed the year for green hydrogen. They’re also greenlighting the hydrogen revolution, which is considered a critical piece of the net zero puzzle. 

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ICVCM’s New Framework: Raising the Bar for Carbon Credits

The Integrity Council for Voluntary Carbon Market (ICVCM) released the long-awaited framework that provides guidance on defining what makes carbon credits of high quality, which can help boost the credibility of the voluntary carbon market (VCM)

ICVCM’s Assessment Framework is part of their Core Carbon Principles (CCPs) published last March. The framework will be used to assess if carbon credits adhere to its high-integrity CCPs. The CCPs include 10 codes categorized into three areas: governance; emissions impact and sustainable development.

CCP-labeled credits will be available to buyers by the end of the year. 

The Integrity Council believes that with their new framework, the VCMs now have a global standard for quality by addressing market issues on confidence and integrity. Executives of the ICVCM highlight the importance of high-quality credits in reducing emissions and delivering global climate goals.  

Carbon Prices Recovering From A Dip

The release of the guidance comes at a critical time for the $2 billion carbon market. The growing criticism over some carbon offset projects caused a sharp decline in market liquidity and carbon prices. 

Nature-based carbon credit prices (NGEO), in particular, are largely impacted.

But with various initiatives introduced, carbon credit prices started to recover slowly. As per S&P Global Commodity Insights’ Platts assessment, nature-based credit prices (Platts CNC) recovered from a record low of $1/mtCO2e in May to $2.45/mtCO2e in July. S&P Global data suggested that prices for the same credit reached an average of $9.55/mtCO2e last year. 

Many industry experts hope that this development will inspire more carbon removal and reduction efforts by bringing certainty to VCMs. But for a carbon credit to earn a CCP label, it has to go through two assessment levels. 

Program Level

This assessment framework and procedure were first released alongside the CCP guidelines. A dedicated “Assessment Platform” is part of this second release specifically designed for crediting programs applying for CCP eligibility. 

The ICVCM refers to these programs as a “standard setting program that registers mitigation activities and issues carbon credits”. Established programs are the Gold Standard, American Carbon Registry, and Verra’s Verified Carbon Standard (VCS).

Carbon Credit Category Level

This is the newly released assessment guidance but the framework doesn’t define yet what a ‘Category’ means. The Integrity Council will form a Categories Working Group (CWG) tasked to finalize the definition based on data gathered from rating agencies and publicly available information.  

The CWG will recommend which categories must be prioritized for approval, which ones need further assessment, and which carbon credits don’t deserve the CCP label. 

According to the framework, carbon credits must support carbon projects that align with net zero, additionality, permanent, and robustly quantified

The goal of the framework is to ensure that the highest quality carbon credits prevail and get premium prices. The assessment process is shown below.

Some carbon crediting programs and standards are revisiting and making some changes in their methodologies.

For instance, the world’s leading carbon registry, VCS, has been improving the quality of its forest carbon credits. The mostly used crediting program will finalize its REDD+ methodology by the last quarter of this year. 

Quality Issues Remain, Framework to Strengthen

While some improvements are happening in the market, some experts still warn that quality issues of projects continue to persist. 

Others say that these efforts from ICVCM and similar initiatives aren’t a “silver bullet” that can instantly resolve the issue of quality. Some say that the growing scrutiny of the VCM highlighted significant failures of the market to deliver at a project level. This has clearly impacted the supply of carbon credits as reported by S&P Global for different projects. 

Chart from S&P Global Commodity Insights

Still, as major initiatives focus on the quality of the credits circulating in the market, improvements will happen soon. The Integrity Council will start forming various multi-stakeholder working groups to make things clear and strengthen the framework.

The carbon market governance body will also keep on updating its guidelines and frameworks over time. That means incorporating new developments, technological advances, and lessons learned into the updated version of the framework. 

The release of this initiative comes after the VCMI launched its Claims Code of Practice just recently. It’s a separate guideline seeking to make the demand side of the VCM more credible. The Code will help guide companies in using carbon credits to voluntarily offset their emissions.

Both VCMI and ICVCM aim for the same thing: to bring integrity to the VCM. They’re also currently working to create an integrated market integrity framework aimed at improving carbon offset quality. 

The ICVCM will start announcing CCP-Eligible programs and CCP-Approved categories later this 2023, making CCP-labeled credits available for buyers before the year ends.

Will this new threshold for quality bring prices of carbon credits up to premium? That’s something to watch out for in the market once the CCP-labeled credits are up and running. 

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Miner Rio Tinto’s Carbon Problem and Offset Solution

The world’s second-largest miner – Rio Tinto – revealed that it won’t be able to reach its 2025 decarbonization target of 15% carbon emissions reduction. That’s unless it buys carbon credits to offset its emissions.

The mining giant had also made an $800 million “write down” on its Gladstone alumina refineries due to the higher costs of annual emissions cap under the Albanese government’s tougher “Safeguard Mechanism”. 

Writing down or taking an impairment charge of its assets happens when a company’s projected cash flows are less than what the asset is currently accounted for in the books. 

Rio Tinto didn’t expect and account for the impact of the imposed carbon tax on its long-term cash flow projections. Thus, the miner must change the projections that resulted in the $800 million reduction in its Australian alumina refineries asset. 

This claim to miss its net zero targets is one of the first admitted by a mining giant, highlighting the struggles faced by heavy industries in abating their carbon emissions.

According to Rio Tinto’s CEO, Jakob Stausholm, achieving the 2025 climate target is hard because developing new solutions takes time. He specifically said that:

“There is a lot of technology that doesn’t exist and has to go through an R&D funnel, and that just takes a long time.”

Rio Tinto’s Carbon Emissions and Pathway

The miner aimed for net zero emissions by 2050, in alignment with the Paris Agreement. To reach this climate goal, the company sets a 15% reduction in direct and indirect emissions by 2025, and 50% by 2030, based on the 2018 baseline. 

But Stausholm previously said that he regretted those targets while noting that reaching them calls for making tough choices. 

Mining is responsible for only 20% of Rio Tinto’s carbon emissions. About 50% is from its Australian refineries, where the impairment charge comes from, as they’re energy-intensive and run by coal.

In 2022, the mining giant was able to cut Scope 1 and 2 emissions by 7% relative to 2018 levels. The reduction – from 33.7 – 30.3 Mt CO2 – was mainly due to employing large-scale renewable energy that powers its operations. 

Scope 3 emissions prove harder to abate, almost at 584 Mt CO2. Rio said that estimating Scope 3 emissions remains challenging but claimed that they’ve made improvements in accuracy in 2022.

Over 94% of this pollution comes from the downstream processing of iron ore, bauxite, and other products, while over 76% of these processing emissions occur in China. 

Rio Tinto also expects that its emissions will rise (1.5 Mt CO2) as production grows between 2023 and 2025. To help address this, and still reach its 2025 climate target, the miner developed a plan for abatement projects. These projects have a total of 4.2Mt CO2 abatement. 

To reach its 2030 target, the mining giant has to employ these decarbonization levers: 

Switching to renewables
Abating emissions from alumina refineries and minerals processing 

In line with those strategies, Rio Tinto established the following specific abatement programs and their emissions reduction potential.

Carbon Credits Are Key in Rio’s Net Zero Goal

The other required abatement particularly includes investment in nature-based climate solutions (NbS). That means investing in high-integrity carbon offset credits, which according to the company play a greater role in their net zero pathway.

You can see the latest world carbon prices on our dashboard here.

In fact, Stausholm said their 2025 goal will still be achievable through carbon credits as their “last resort”. Securing high-quality carbon credits is crucial for the miner to decarbonize their operations. 

In particular, Rio Tinto’s ambition is to “build a sustainable and long-term carbon credit portfolio generating 1.7 million tonnes annually by 2030”. 

The company will focus on investing in carbon credits in regions where they’ve significant emissions, including North America and Australia. They then plan to move upstream into co-development or co-financing of carbon offset projects for the long-term security of earning quality credits. 

Delivering its net zero emissions strategy requires Rio Tinto to invest $7.5 billion in capital between 2022 and 2030. Out of that, about $1.5 billion will be needed over the period 2022 to 2025. 

Last year, the miner’s decarbonization-related capital expenditure was just $94 million, far below their original estimate of $500 million. But decarbonization investment across the rest of the Rio Tinto Group will ramp up beyond 2025.

The company will continue to explore carbon capture and mineralization options leveraging its exploration and geological expertise. Carbon capture technologies, though emerging, have been the go-to solution for many heavy emitters.

Rio Tinto peers such as BHP and Fortescue Metals Group are so far on track to reaching their climate goals. BHP seeks to reduce Scope 1 and 2 emissions by 30% by 2030, while Fortescue aims to hit net zero emissions by the same year. 

As governments’ carbon tax and other schemes become law, companies will be forced to account for these costs in their cash flow projections. And Rio Tinto is not the only company that will face this problem. Other heavy emitters in Australia, Canada, and Europe may expect to see this coming their way, too. 

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