Oregon County Sues BP, Chevron, Shell, Exxon for $51B Climate Damages

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An Oregon county filed a lawsuit against oil and gas companies and industry, blaming them and seeking $51 billion in damages for the deadly 2021 Pacific Northwest heat wave that killed about 800 people.

Multnomah County, which includes Portland, sued 17 companies, including Shell, Exxon Mobil, Chevron, BP, among others. The county said these fossil fuel companies and other entities in the industry are the ones to blame for the deadly heat dome.

A heat dome event happens when a high-pressure system prevents cooler winds from blowing and also prevents clouds from forming. 

The $51 Billion Heat Dome Damages

Multnomah County is seeking $50 million from the defendants for actual damages from the 2021 record-breaking heat wave. Temperatures in the region reached 116°F, killing 69 people in the county. This is the hottest temperature ever recorded in the county’s history. 

The plaintiff also asked for $1.5 billion in future damages and $50 billion abatement fund to “weatherproof” the county. The fund will also be for public health services needed for future extreme weather events resulting from fossil fuel use. 

Emergency departments in the county were flooded with patients suffering from heat-related illness. 

Apart from Oregon, hundreds of people also died because of the event in Washington and British Columbia. 

Researchers composed of climate scientists said that the heat wave was due to excessive carbon emissions from burning fossil fuels. 

According to these climate experts, the 2021 heat dome was “virtually impossible” if not because of global warming. Their study showed that the heat wave was at least 150x less likely to occur if temperatures hadn’t heated that much caused by human-related carbon emissions.  

After the 2021 heat dome, the county has spent more to prepare for similar events in the future – expanding shelter, increasing supplies, and staffing up. 

Climate Lawsuits Against Big Oil 

The Oregon county accused the big oil companies, and other entities including McKinsey & Company, for committing negligence and fraud. They said the companies knew that their fossil fuel products will cause warming and will have a negative impact. Yet, they continue to deceive the public about it.  

As per their statement:

“We are confident that, once we show what the fossil fuel companies knew about global warming and when, and what they did to deny, delay and deceive the public, the jury will not let the fossil fuel companies get away with their reckless misconduct.” 

Oregon taxpayers paid for all the heat-related emergencies and expenses during the event, including air conditioning and cooling centers.

The Oregon lawsuit is similar to climate litigations filed by other local and state governments since 2017. It’s the 36th time a municipality has sued oil and gas companies for alleged damages caused by global warming. 

It comes after the US Supreme Court sided with Colorado’s governments demanding oil giants to pay for their climate damages.

Last year at climate summit, COP27, Climate TRACE, an NGO tracking emissions, analyzed 72,612 individual sources of CO2. Their study revealed that fossil fuel emissions could be up to 3x higher than what oil and gas companies claim. They found that 50% of the largest emitters are oil and gas fields.

According to an analysis, global carbon emissions from fossil fuels hit record high in 2022 as shown below, at 40.5 gigatons of CO2.

Source: Carbon Brief

Baseless, Unproductive Claims

In response to the lawsuit, Chevron’s legal representative said the claims are baseless and counterproductive in “advancing international policy solutions”. 

Shell also responded saying that the court isn’t the right venue in tackling climate change. Rather, this issue needs collaboration from all sectors and a “smart government policy” as the right way to find solutions. 

Exxon’s spokesperson said that this kind of lawsuit won’t be helpful in addressing climate change, and will just waste time and resources. The oil giant further stated that it won’t impact their commitment to invest billions to reach global net zero emissions. 

If big oil companies ended up paying the damages, it can make the cost of doing fossil fuel business more expensive, as per a climate law fellow at Columbia University’s Sabin Center for Climate Change Law.

In effect, alternatives to fossil fuels will be more cost-competitive. This may not be a direct effect of climate change, but it could be a crucial turn of event.

Multnomah County brought the lawsuit in state court and has secured outside lawyers for the case. 

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Revolutionizing Dairy Sustainability: Reducing Methane Emissions by 80%

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Resonant Technology Group recently announced that its patented product, SOP® Lagoon, can significantly reduce greenhouse gas emissions of the dairy industries – 80% for methane and 75% for carbon dioxide. 

US-based Resonant is an affiliate of SOP (Save Our Planet), an Italian tech company run by biologists, agronomists, chemists, engineers, animal nutritionists, and veterinarians. SOP’s proprietary technology is for application to crops, animals, soils and vineyards.

Resonant is developing innovative ways of applying SOP® Inside technology aimed at mitigating GHG emissions. The company enables adaptation of SOP products in agriculture, food industries, and their supply chains. 

A Breakthrough Solution to Cut Methane Emissions

Methane is a more powerful gas than CO2 in heating up the planet. It accounts for about 50% of the increase in global temperatures while remaining in the atmosphere in a shorter period. Thus, cutting methane emissions could be the fastest way to prevent temperatures from going up.

Dairy cows are the major source of emitting around 8% of global methane pollution. And about 80% of the total GHG emissions of milk production comes from the farm level.

This is where Resonant’s SOP® Lagoon offers an unrivaled solution in reducing methane emissions at the dairy farm level. 

SOP® Lagoon is a mineral 0.07 oz (2g)/head additive that is applied once a week into the lagoon. Lagoon dairy waste emissions account for up to 57% of total dairy methane emissions. 

The SOP proprietary product can be used alongside other products that are scientifically proven to reduce enteric and soil emissions. It has been used by farmers for animals, crops, soils and vineyards in Europe and North America. 

A joint study from the University of Milan and University of California Davis scientifically showed that the SOP® Lagoon product’s application in dairy lagoons significantly reduced GHG emissions, targeting these pollutants:

Methane – 80% emission reductions
Carbon dioxide – 75% emission reductions

The researchers did a three-and-a-half month in-field study at a 520-head commercial dairy farm in Northern Italy. Their findings show the additive’s GHG reduction potential identified above. 

Other Ways to Lower Dairy Methane Emissions

The additive is also capable of reducing emissions from other sources, enteric (digestive) and soil. Overall reduction potential is more than 50% of total emissions from dairy farming operations. 

Other 4 separate studies have also confirmed SOP® Lagoon’s ability to offer an immediate and meaningful solution in cutting the methane emissions of the dairy and livestock industries in general.  

Other initiatives to reduce livestock emissions include improving reproductive efficiency in dairy cattle, which can cut methane emissions by 24%.

Another solution is to lower emissions from enteric fermentation by changing the livestock’s diet such as including seaweed or barley. Also, scraping manure and transporting it to another storage facility for cattle production systems may cut methane emissions by 55%.

Enteric and manure emissions make up as much as 40% of the total GHG emissions from dairy operations. The other 60% comes from effluents and manure flowing from dairy lagoons or barns.

Addressing those sources on a large-scale basis can potentially reduce methane emissions in millions of tonnes of CO2 equivalent (CO2e). And each tonne of emission reduction generates one carbon credit. 

Earning Extra by Cutting Methane

Carbon credits, also known as carbon offsets in voluntary markets, provide extra income for entities that reduce GHG emissions. 

While most credits are issued for activities reducing CO2 emissions, methane reduction through manure management such as applying the additive is also eligible to earn credits. The world’s largest certifier of carbon credits, Verra, had issued credits for cow methane reduction. 

And considering that methane can be 85x more potent than CO2, reducing more of it means more carbon credits generation. 

But the price for each carbon credit for methane reduction varies widely. Several factors affect the price, including location, market dynamics, and the certification standard. 

On average, the price for a carbon credit ranges from less than $1/tonne of CO2e to $15/tonne or more. Assuming that a 500-head dairy farm applies Resonant’s SOP® Lagoon and reduces about 2,000 tons of CO2e yearly (methane emissions), the owner can earn up to $30,000 a year. 

The additive can also reduce ammonia, which is being considered to be added to the target list of GHG emissions. 

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What is REDD+? Development, Issues, and Solutions

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Nature-based solutions are among the go-to options in fighting climate change and REDD+ always comes on top of the list. Individuals and organizations alike tend to prefer this solution while critics continue to doubt its credibility in reducing carbon emissions. 

So, to help you clarify confusions surrounding REDD+ and its corresponding emissions reduction claims, or popularly known as carbon credits, we’re going to talk about the essence of this program. 

From its origin to its current role in protecting our world’s forests as well as the challenges it faces, this article will explain REDD+ and everything that comes along with its successful implementation. 

Let’s start with the current state of the forests. 

How are Our Forests Right Now?

The state of forests worldwide varies depending on the region and certain factors such as deforestation rates, forest management practices, and natural disturbances like wildfires. 

The world’s forests account for 92% of all terrestrial biomass globally and store about 400 gigatons (Gt) of CO2. They take up carbon via photosynthesis and store it below- and above-ground. Different forest types store varied amounts of carbon, depending on the climate present in the particular location of the forest.  

Source: U.S. Department of Agriculture, Forest Service, Climate Change Resource Center

These forests are one of our great allies in preventing global temperatures from going up. Unfortunately, forest trees are cut down or burned drastically around the world. 

Deforestation is the biggest culprit of forest loss. 

Forests are cleared mainly for agriculture, urbanization, and logging, collectively called land use change. This causes not only deforestation but rising carbon emissions, biodiversity loss, and decline in wildlife species.

Deforestation is responsible for releasing as much as 5 GtCO2 a year, which is equal to about 10% of the global GHG emissions.

The worse-case scenario? Deforestation and degradation cause some forests to release more carbon than they sequester. 

Alarming wildfires are burning millions of hectares of forests in the U.S., Canada, and other parts of the globe. The record-breaking wildfires that engulfed boreal forests in North America and Eurasia emitted almost 2 billion tons of CO2.

The worst-case scenario? Forest loss will continue at the scale that will make the 1.5°C climate goal an impossible dream. This will happen if people find forest land conversion more profitable than keeping the trees standing.  

If deforestation in tropical forests were a country, it would rank third in CO2 emissions. 

All this means that if we don’t end deforestation as early as this decade, we won’t be able to stop climate change from wreaking havoc on our planet. 

Climate experts said that curbing deforestation is humanity’s biggest chance to immediately reduce carbon emissions. Many agree but others don’t. 

Still, governments devised various policies to bring financial incentives to conserve forests and avoid forest loss. They’re formally referred to as REDD – Reducing Emissions from Deforestation and Degradation. 

How REDD+ Evolve to Protect Forests  

The history of REDD can be traced back to the international efforts to fight climate change and preserve forests.

Two tropical countries brought the concept of REDD to global climate summits known as COP – Conference of Parties. Costa Rica and Papua New Guinea formally placed this topic on the table during the COP11 in 2005. 

Their idea received huge interest from other countries as a way to conserve forests by prompting performance-based incentives at scale. Why won’t it be if the initiative will promote sustainable forest management practices while making trees more valuable standing than logged.  

So, monetizing the carbon stored in forests through carbon credits provides local communities revenue for sustainably managing their forests. The income from the credits will deter them away from livelihood that causes deforestation such as illegal logging, crop cultivation, and livestock raising.

Here’s the timeline, and some dates to remember, of how REDD came about and expanded to REDD+. 

Global climate talks began in the ‘90s. The United Nations Framework Convention on Climate Change (UNFCCC), formed in 1992, gave birth to several international and national strategies to reduce GHG emissions. 
First REDD discussions in early ‘20s. Pilot discussions and projects exploring means to cut emissions from deforestation started to emerge in the early 2000s. Costa Rica and PNG were responsible for these first initiatives, calling for the need to develop a comprehensive framework. 
Bali Action Plan in 2007 (COP13): The UN COP13 in Bali, Indonesia, in 2007 was a significant milestone in the development of REDD. The conference put forward the importance of REDD in developing countries and emphasized the need for financial support to implement it. 

The COP13 parties added the “+”, expanding the term to REDD+. The plus simply refers to the co-benefits of protecting forests from destruction. It means the role of “conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries”.

The Warsaw Framework for REDD+ in 2013 (COP19). The 19th session of the COP in Warsaw, Poland in 2013 formally adopted the framework for REDD+. It laid out key principles, guidelines, and safeguards that REDD+ projects and activities should follow. The framework also rang the bell for financial and technical support needed by developing nations to implement REDD+.

Following the Warsaw Framework, many countries have established and developed their national REDD+ strategies and implemented projects on the ground.

What’s even better is that several organizations have shown support to REDD+ initiatives through financing and capacity development programs. 

REDD+ in the Carbon Credit Markets

At the end of 2022, there are over 620 individual REDD+ projects and programs implemented. Most of them are funded by international donor organizations, such as the UN-REDD and the World Bank. 

REDD+ countries are now focusing on operationalizing both their REDD+ strategies and proposals for bigger forestry programs. Their ultimate goal is to build investment packages that will result in carbon emissions reductions through results-based finance.

Though they only represent a smaller chunk of REDD+ financing, the voluntary carbon markets (VCMs) have been recognized as a good source of investments with REDD+ carbon credits. 

As of 2022, over 400 million REDD+ credits have been issued on the VCM, representing a quarter of total credits issued in the market. 

The majority of REDD+ projects are in South America, where forested regions are found, including the Amazon. Other forest projects are also in Sub Saharan Africa, Asia-Pacific, and Central America. 

By country, Indonesia has by far issued the most REDD+ carbon credits in 2022 with 76 million, according to Sylvera. That issuance is only from four REDD+ projects operating in the Asian country. 

What makes REDD+ carbon credits, also categorized as nature-based credits, desirable is that most of them deliver co-benefits. These are other societal and environmental benefits that forest projects provide apart from carbon reductions. 

In context, only less than a quarter of credits in the VCM have co-benefits while REDD+ projects have over 60%.

It’s no surprise, therefore, that REDD+ is always at the forefront of international climate change talks as a solution to avoid global temperatures shooting up. 

However, it is not immune to critics and skeptics. So, let’s take an inventory of the major issues surrounding the initiative. 

What is Shaking up REDD+? 

Accounting for the carbon reduced or removed by a REDD+ project is not that easy. And one of the most important things that affect how effective the project is baseline setting. 

Simply put, the baseline scenario is the condition of the forest without implementing the project. It’s often determined by observing deforestation activity in the adjacent areas and using it as a reference point.

Getting this proxy correctly, or as accurate as possible, is critical. It dictates how much carbon reduction the REDD+ project achieves. 

In a sense, projects must have baseline emissions that are conservative and not too aggressive so as not to overstate their climate benefit. It is for this very reason that REDD+ projects are criticized for underperforming, ineffective, and so generate worthless carbon credits. 

And then came the market’s biggest blow – The Guardian publication. The media’s article put a study questioning the forest projects certified by Verra, accusing them of using inaccurate baselines. 

The published article claimed that over 90% of the REDD+ carbon credits are “largely worthless” and are “phantom credits”. In other words, they likely don’t represent real emission reductions. 

The main point of the study’s contention is the overstated baseline emissions used in calculating the projects’ net climate impact. And that’s by a factor of 400%.

But of course, despite it being an academic investigation, it’s crucial to also note that the way the researchers take the “baselining” method doesn’t match Verra’s crediting program for REDD+ projects. 

Verra was quick to respond to such a big accusation…

The world’s largest carbon standard worked closely with the publication to explain why their findings are not true. Verra responded that the article is “incorrectly claiming that REDD+ projects are consistently and substantively over-issuing carbon credits.”

Verra also noted that the studies were using “synthetic controls” that don’t account for project-specific factors that cause deforestation. Thus, they largely miscalculated the impact of the projects that Verra certified.

Other key market players and stakeholders also responded. 

For instance, a carbon rating agency, Sylvera, fired back by citing their own research on the subject matter. Their findings showed that the publication’s claim on worthless credits didn’t consider the biggest factor in baseline setting – the proximity to the active front of deforestation.

The rater asserted that forests need protection to help achieve the world’s climate goals. They said that we “must not sabotage the financing of projects that are delivering sound climate, social, and biodiversity benefits”. 

Likewise, a climate tech startup Pachama that has been evaluating over 150+ deforestation projects commented. The company is using artificial intelligence (AI) in determining baseline scenarios of the projects they support. 

This brings us to the next section – the solutions to these major issues:

Inflated baselines,
Underreporting of deforestation, and 
Forest loss causing permanence risk

Addressing the Issues with Technologies and Innovations

At the onset of REDD+ projects, advanced technologies like AI, satellite data, remote sensing, and algorithms weren’t yet around. That means companies rely on manual tools and systems in establishing baseline scenarios.

But now that digital technologies and even AI are publicly available, improvements are being made in setting baselines.

For example, Pachama’s technology called “Dynamic Control Area Baseline” ensures that carbon credits accurately represent real emission reductions. They observe forest loss in the control area using remote sensing data and then compare it with what they’ve observed with the project reported. 

The following image shows the project area in white and the control area in blue. 

Carbon rating agencies that focus on nature-based projects like REDD+ are also using innovative technologies to provide more quality assurance. 

Another unpopular solution is the application of blockchain in monitoring, reporting, and verification (MRV) of forest projects. Blockchain-based MRV can help improve verifiability of REDD+ carbon credits and ensure their permanence. Yet, further research is necessary in this field. 

Additionally, the current trend in the REDD+ sector is transitioning initiatives from project-level to jurisdictional or “nested” approach. This approach follows the same concept of REDD+ but covers national forests. 

The case of the Amazon in Brazil is an example. This jurisdictional REDD+ has a single reference baseline for deforestation.  

Plus, this new approach has not been used to issue voluntary carbon credits. Rather, it generates a new asset in the carbon market – sovereign carbon credits. The only concern with this solution is enforcement by political leaders.

When it comes to financing, carbon credits help fund REDD+, be it on a project-level or jurisdictional basis. 

Everland’s Forest Plan, in particular, will help the development and long-term financing for 75 REDD+ projects in threatened forests. Here’s the plan’s outlook for REDD+ from 2022 to 2030.

Everland’s forest projects will cover around 23 million hectares. The Forest Plan’s aims may be ambitious but they’re a part of a bigger, collective effort to end deforestation. 

What Comes Next for REDD+? 

While no one can predict or calculate 100% accurate baseline scenarios, improvements in practices will bring better results. This will enhance the accuracy of calculating how much carbon credits are due for REDD+ projects. 

Advanced technologies and new innovations will enable the market to correct itself. 

Following the bad press coverage for REDD+ earlier this year, misconceptions about them and their associated carbon credits continue to bring the market down. 

But as what major industry experts pointed out, not all forestry projects are the same. Some may have poor quality but many others still deliver significant positive climate benefits and sustainable development goals. 

Ultimately, there’s no single silver bullet for ending deforestation but carbon markets do have a crucial role to play here. They direct major investments and support toward REDD+ projects and programs worldwide. With that, REDD+ remains a vital tool in fighting climate change. 

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The Flight to Quality in the Carbon Markets

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Carbon offset credits trading on the voluntary markets have taken quite a hit in the past year, with their prices falling down.

Prices for the various CBL carbon offset futures contracts, such as GEO (based on the aviation industry’s standards) and NGEO (for nature-based offsets) have seen significant declines in the last twelve months:

There’s a couple of factors at play here, not least of which would be the tough global macroeconomic conditions we’ve had lately.

High rates of inflation not seen in decades, on top of the continued war in Ukraine and lingering pandemic effects all contributed to slower economic growth exiting 2022 and entering 2023.

In addition, progress on a unifying standard for the carbon credit markets on a global scale remained stagnant at COP27. This further hampers development of the voluntary markets.

However, there’s one more issue causing downward pressure on carbon offset credit prices that I want to focus on today. But unlike the other causes mentioned previously, this issue originates from entirely within the voluntary carbon markets.

When One Man’s Trash is Another Man’s Trash

Last month, the CEO of the world’s largest carbon credit certification company, Verra, stepped down.

Now it’s not always bad news when a company’s top dog steps down. Sometimes they leave to pursue new opportunities, or to retire… but unfortunately, this wasn’t the case with Verra.

Verra’s CEO David Antonioli decided to walk away from his job following a string of bad press covering Verra’s poor environmental standards:

Over the past several months, the integrity of Verra’s carbon credit verification standards came under fire. That’s courtesy of independent investigations by news agencies, corporate watchdogs and other third-party organizations.

The accusations were severe, with many accusing Verra of certifying “junk” carbon offsets.

What makes a carbon offset credit junk? Well, there’s a couple different possibilities.

One major reason carbon offsets would be worthless is if they don’t achieve the environmental benefits they claim to have. A carbon project might be over-exaggerating its greenhouse gas reductions or underreporting its risks. Some carbon offsets are also based on emerging technologies that may not be fully proven yet.

Additionality is also a term often used here that you may have heard of before. In essence, additionality refers to whether a carbon project would have happened anyway even without taking carbon credits into account.

You’ll see this term come up often on renewable energy offset projects as certain types of renewable energy projects are already profitable and thus, have been undertaken regardless of the impact of carbon credits.

Finally, in the worst-case scenario, a carbon offset project might even actively cause harm to the area it’s based in as well as the communities there. This is more likely to happen when the project is based in a developing country. Standards are often more difficult to enforce in these areas.

As a result of these claims, purchasers of Verra credits came under fire by association as well. Companies like Chevron, Disney, Credit Suisse and Gucci were accused of relying on low-quality carbon offsets to achieve their net zero goals.

A Matter of Quality Over Quantity

Now if the voluntary carbon markets were robust and Verra was just another company, this wouldn’t be a big deal.

The problem, however, is that Verra isn’t just another carbon credit company. It’s the carbon credit company.

Right now, Verra certifies 75% of all carbon offset credits in the market. They issued their billionth credit just last year.

Verra scrambles to win back trust and is revising and updating its carbon credit methodologies, particularly for its rainforest program. But the damage has already been done.

Companies are now instead choosing to look elsewhere for higher-quality carbon credits, even if they might be more expensive:

Last month, JP Morgan announced that it would be committing more than $200 million towards a number of carbon removal technologies totaling 800,000 tonnes of carbon to be removed from the atmosphere and sequestered – a cost of $250/tonne.
Tech giant Microsoft also announced in May that they would be purchasing 2.76 million credits over 11 years from Danish energy company Ørsted for capturing and storing carbon emissions from their biomass power plant – a BECCS-type carbon project.
In April, Apple launched a major expansion of their Restore Fund, adding another $200 million to their portfolio of high-quality nature-based carbon offset projects.

With this kind of money being thrown around, it’s clear that even if Verra’s credits are off the table, carbon offsets as a whole certainly aren’t. The major players are merely finding alternative sources for their needs.

Green-Lighting the Path Forward for Carbon

The market for carbon offsets doesn’t look great right now with their prices plummeting down. Yet, their usefulness as a tool in combating climate change and role they play in carbon neutrality planning is undeniable.

Despite the negative press surrounding the carbon offset industry in recent months, the companies with real, actionable net zero plans haven’t shied away. Rather, they’ve doubled down on their investments with sizeable commitments towards proven, high-quality carbon projects, as shown above.

Simply put, the voluntary markets continue to shake off the after-effects of the bad press from Verra and the tough economic conditions. Both companies and individual investors need to be more selective with the carbon projects they want to get involved in.

There’s a veritable forest of carbon projects and carbon companies out there – and only the best will emerge unscathed from this market downturn.

The big oil companies know carbon offsets are part of the solution. But this sector will continue to evolve. 

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BHP to Spend $4B to Decarbonize by 2030, Carbon Emissions Spikes Up Near-Term

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World’s largest mining company, BHP Group, revealed that its carbon emissions will grow in the short term and needed rapid technological solutions, as well as carbon credits to achieve its 2050 net zero goal.  

The Australia-based mining giant said that it’s on track to reach its 2030 emissions reduction target. But achieving its 2050 net zero goal would be very challenging. 

It aims to achieve a 30% reduction in 2020 levels in operational or Scope 1 and 2 emissions by 2030. This goal doesn’t cover Scope 3 emissions, however, which include its customers’ like the steelmakers’ emissions.

BHP’s $4 Billion 2030 Climate Targets

Its 2030 decarbonization goal requires $4 billion, according to Patrick Collins, BHP’s head of decision evaluation, transformation portfolio and performance. 

Majority of the $4 bln investment will be for the most diesel-intensive assets, electricity, and gas emissions. 75% of that funds is for replacing diesel use in haul trucks, in particular. About 50% of the company’s pollution comes from diesel. 

The company also allotted a small portion of that $4 bln to methane, which accounts for over 14% of its operational GHG emissions. 

BHP’s Western Australian iron ore unit will receive most of the funds, and by its Escondida copper mine in Chile.

This decarbonization plan will allow the mining company to reduce its carbon emissions until the end of this decade. But it’s also crucial that BHP becomes ready for rapid technological advances to ramp up its reductions in the next decades towards 2050. 

Apart from carbon reduction technologies advancing quickly, the largest miner also needs to collaborate with its vendors and the industry. This is crucial in addressing Scope 3 or value chain emissions. 

BHP’s path to net zero will be “non-linear” or bumpy, the company admits. They expect a near-term rise in carbon footprint from production growth from current levels. The mining giant’s carbon emissions will rise before falling again by the end of 2030. 

BHP Carbon Emissions for 5 Years (2017-2022)

Source: BHP Sustainability and ESG Navigators and Databook 2022

As shown in the chart above, BHP’s operational carbon emissions were 11 million tonnes of CO2 equivalent (CO2e). That’s a big decrease, 26%, from previous year level (2021 at almost 15 million tonnes). 

That achievement was largely due to renewable electricity used by the mining company at its different sites. The head of BHP’s carbon management division, Graham Winkelman, asserted the role of renewable energy in its decarbonization efforts.

He said that to counter that growth in emissions, they plan to have “additional deployment of renewable energy before 2030, and further effort to deliver abatement across other emissions sources, including diesel, fugitive methane and natural gas.”

Another means to further cut emissions that BHP is currently exploring is ‘dynamic charging’, which it will try at its Western Australia and Chile mines. This will allow its haul trucks to be charged even when actively operating. 

Haul trucks are the biggest consumer of diesel in Australia and the mining giant opted to switch to electrified fleet. 

Switching to electric haul trucks will cause power demand to go up. The company will meet that rising demand by building 500 MW of renewable power and storage. It will also help reduce the miner’s energy use emissions.  

In 2022, more than 11% of BHP’s energy use came from renewable power. 

When it comes to emission sources, the mining company’s coal mines in Queensland are the single largest polluter in its Australian operations. It emits about 50% of its carbon footprint, with a third coming from methane leaks. 

To fix this issue, BHP plans to capture 50% of that leaking methane and use it to produce electricity. The company then added that it’s seeking other solutions to meet its long-term net zero goal by 2050.  

And one of them is using carbon offsets, or carbon credits. 

BHP’s Use Cases for High-integrity Carbon Credits

Winkelman pointed out the role of carbon credits in its net zero pathway. He said that: 

“We maintain the option to use high-integrity carbon credits for GHG emissions that cannot reasonably be entirely avoided. And while unlikely to be necessary for our 2030 target, we can anticipate the need for some carbon credits to deliver on our net zero goal.” 

He further added that they may need carbon credits as part of compliance requirements under Australia’s safeguard mechanism. 

In 2021, BHP retired 300,000 carbon credits that offset the increase in its operational emissions for that year. The credits were from forest projects like the Cordillera Azul National Park REDD+ Project and the Kasigau Corridor REDD Project.

BHP has 5 potential “use cases” for carbon credits to complement the structural emissions abatement they prioritize. 

The mining company gets its carbon credits from various sources such as project origination and spot markets. BHP considers offsets both from projects that remove and avoid carbon emissions. While they prioritize carbon credits from nature-based solutions, they’re not closing doors for offsets from engineered or technological solutions.

Last year, the miner explored generating carbon credits from its mining waste products in a process called ‘carbon mineralization’.

BHP’s revelation of short-term spikes in its carbon emissions still comes despite having less ambitious net zero targets than other large Australian miners. 

For instance, Rio Tinto Group, world’s second largest mining firm, has a bigger reduction target of 50% by 2030. Meanwhile, Fortescue Metals Group, fourth-largest iron ore producer in the world, aims to hit net zero emissions by 2030. 

Reaching BHP’s 2050 net zero emissions goal will be “neither linear nor easy, but it’s achievable,” says Winkelman.

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Whistleblower Alert: Carbon Markets Tipsters Wanted By CFTC

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The U.S. Commodity Futures Trading Commission (CFTC) is actively seeking tipsters. Recently, the CFTC’s Whistleblower Office issued a Whistleblower Alert explaining that individuals can qualify for both financial rewards and certain protections if they identify potential Commodity Exchange Act (CEA) violations linked to fraud or manipulation in the carbon markets.

The CFTC’s Whistleblower Office is urgently inviting the public to stay vigilant for any signs of manipulation in the carbon markets. The Whistleblower Program initiative offers protection and financial compensation to those who uncover possible violations of the Commodity Exchange Act (CEA). These violations concern carbon markets, which are crucial in transitioning towards a low-carbon economy.

In carbon markets, individuals trade carbon credits or offsets. Buyers and sellers can trade these credits either directly with the holder or through a spot exchange.

Carbon credits feature as the primary commodity of futures contracts listed on CFTC-regulated contract markets. The CFTC oversees trading, enforces regulations, and guards against fraud in carbon credits spot markets.

CFTC’s 5 Carbon Misconducts:

Deceptive Practices in Carbon Markets Futures Contracts: These deceptive practices include “wash trading,” a method where identical financial instruments are traded to create artificial market activity. Other violations may involve price manipulation, false reporting, or fraudulent solicitation.
Ghost Credits Fraud: This type of fraud occurs in spot markets where immediate sales and purchases of carbon credits happen. Ghost credits or illusory credits do not represent actual carbon reductions. Market registries may list them as fake increased market activity or carbon reduction.
Double-Counting Fraud: This form of fraud happens when the same carbon reduction gets counted twice. A company could double-count a carbon reduction by selling its credit after counting it towards its own goals.
Misrepresentation in Carbon Credit Terms: This refers to fraudulent statements about a carbon credit’s specifications. These statements may contain false claims about a credit’s various attributes like quality, quantity, project type, calculation method, benefits, duration, or buffer size.
Manipulation of Tokenized Carbon Markets:  Deceptive practices can occur in markets that tokenize carbon credits on a blockchain. can also witness deceptive practices. Each token symbolizes a certain amount of carbon reduction or offset.

The Whistleblower Program rewards those who voluntarily provide original information about potential violations of the CEA.

If your tip leads to a CFTC enforcement action with over $1 million in sanctions, you could earn a reward. The program also ensures confidentiality and protection against retaliation. Whistleblowers are eligible to receive between 10%- 30% of the monetary sanctions collected.

Since the program’s establishment in 2010, whistleblowers have enabled the CFTC Whistleblower Program to recover more than $1 billion from fraudulent activities.

The CFTC has awarded these whistleblowers over $330 million for their vital contributions.

The CFTC advises anyone suspecting wrongdoing to complete a Form TCR (Tip, Complaint, Referral) as thoroughly as they can.

The more specific, credible, and timely your details are, the more useful your tip becomes. Providing as much evidence of the misconduct as you can assist the CFTC in its enforcement action.

The post Whistleblower Alert: Carbon Markets Tipsters Wanted By CFTC appeared first on Carbon Credits.

Carbon Storage in Caribbean Seagrass is Worth $88 Billion a Year

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A new study led by the University of Michigan shows that Caribbean seagrasses provide several ecosystem services worth $255 billion a year, including $88 billion in carbon storage.

The U of M research team is the first to put a dollar value on the various services that Caribbean seagrasses provide, including fish nurseries, storm protection, and huge carbon storage abilities. 

A marine ecologist and the senior author of the study, Jacob Allgeier, highlighted the potential of seagrass carbon capture and storage for the blue carbon market, saying: 

“Because seagrass ecosystems are both highly important for carbon storage and sequestration, and are highly degraded globally, they represent an important burgeoning market for blue carbon.”

But seagrasses are also under significant threat of degradation due to global warming, pollution, shipping, and coastal development. Protecting them is crucial as they are our great allies in fighting the climate crisis. Blue carbon credits are a potential solution to protect seagrasses, the authors noted. 

How Seagrasses Capture Carbon Dioxide

Talks about threatened ocean ecosystems mostly center on coastal mangroves or coral reefs while seagrass beds receive less traction. But the recent study reveals the equally important role of seagrasses across the Caribbean in capturing planet-warming carbon. 

Seagrass beds take less than 2% of the total surface area of the oceans, providing a home to about 18% of marine species. These marine plants were previously land plants that colonized the seas a hundred million years ago. Most of them thrive in shallow coastal waters worldwide. 

Like other plants, seagrasses use photosynthesis to pull CO2 from the air and store it in their tissues. But because sediments are flooding seagrasses, the decomposition process is getting slow. Hence, over 90% of the CO2 captured in seagrass beds is found in the sediment’s upper layer. 

Seagrasses in the Caribbean store about 1.3 billion metric tons of CO2, as per the study estimates. 

That amount of sequestered carbon is huge but the study noted that it represents only 1.09% of the carbon stored in the Amazon’s woody biomass. It is also equivalent to only 1.12% of the carbon captured by the world’s temperate forests.

What Did the Study Find? 

The researchers used newly available satellite data collected by the PlanetScope. They estimated the amount of carbon stored in plants and sediments in the Caribbean seagrass ecosystems. They also use data from the most dominant seagrass species found in the region – Turtle Grass (Thalassia testudinum).

The Caribbean contributes very little to global emissions, but the region is among the world’s most vulnerable to climate change.

The study estimated that the Caribbean region is home to about 50% of the world’s seagrass meadows by surface area. It also stores around a third of the carbon captured by seagrasses around the world.

The Posidonia seagrass meadow, a key Mediterranean habitat, can store as much as 700 tonnes of carbon per hectare.  

The authors used previous estimates for the value of ecosystem services quantified to calculate their conservative economic value.

Using those data, the researchers found that Caribbean seagrasses provide $255 billion in services each year. The meadows’ carbon capture and storage is worth over $88 billion. 

Here’s the breakdown of their calculation per country:

Bahamas: has the biggest seagrass coverage at 61%, with total services worth $156 billion per year. Carbon sequestration value is worth $54 billion. The total value is more than 15x the nation’s 2020 GDP.

The Bahamas is the first nation to sell blue carbon credits. 

Cuba: comes second with 33% of the total Caribbean seagrass area, providing a total service value of $84.6 billion. CO2 storage capacity value in dollars is $29.3 billion a year. That’s equal to 27% of Cuba’s 2020 GDP. 

These findings emphasize the importance of protecting and conserving these valuable but threatened marine ecosystems. The authors noted that increased seagrass bed degradation results in the release of carbon stored in sediments. With that, they wrote:

“Blue carbon finance thus represents a potential mechanism by which the global community can invest in conserving and protecting these vital ecosystems.”

Protecting Seagrass with Blue Carbon Credits

Blue carbon refers to carbon stored in marine ecosystems, including seagrass beds, mangroves, and salt marshes. The concept gains more attention as a potential source of carbon credits as marine ecosystems like seagrasses can capture and store huge amounts of carbon. 

In fact, another research found that coastal wetlands and seagrass beds capture carbon up to 40x faster than tropical rainforests. This makes them a valuable natural resource in mitigating climate change. 

In McKinsey & Company analysis, established and emerging blue carbon solutions can reduce carbon emissions by up to 3 gigatons of CO2 (GtCO2) annually. Seagrass restoration and protection offer abatement potential of up to 0.37 GtCO2 – 370 million metric tons – a year as shown in the chart.

Source: McKinsey & Company

When a seagrass bed is protected or restored, it can capture more CO2. Once this carbon capture is quantified and verified, it generates blue carbon credits. One credit represents one metric ton of carbon captured or removed from the atmosphere.

These credits are tradable on carbon markets for those looking to offset their carbon emissions. The revenue from selling blue carbon credits can then help fund the conservation and restoration of seagrasses.

The researchers noted that the blue carbon credits can be a means for rich countries to compensate for their emissions. By buying the credits from island nations like the Bahamas, wealthy nations are helping conserve vulnerable coastal ecosystems.

The first carbon credit program for protecting seagrass beds was developed in France earlier this year. 

To quantify the dollar value of carbon storage in Caribbean seagrasses, the authors referred to California’s cap-and-trade program cost at $18/metric ton of CO2.

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Pachama Launches Its Updated Evaluation Criteria Version 2.1

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A climate tech startup Pachama launched its updated version Evaluation Criteria 2.1, marking the official implementation of its Dynamic Control Area Baseline technology. 

Pachama is using AI and satellite data to help improve the integrity of carbon markets. Over the past three years, the carbon credit company has evaluated 150+ projects certified by the world’s biggest carbon registries. 

Pachama’s Updated Evaluation Criteria 2.1 

Pachama’s updated version of its project evaluation criteria is the first ever AI-based tool for evaluating forest projects. It was first launched last year with the goal to improve the quality of forest carbon credits. 

Though there are different tools for measuring dynamic baselines available right now, Pachama’s technology is the first in the industry that actually will be put in use. This is a significant milestone in various efforts to bring more transparency and integrity in the voluntary carbon market. 

The launch of the 2.1 version is important in helping companies decide on their carbon credit investments. The criteria cover quality checks that each project must meet. Project developers must be able to address these four questions:

Is the climate benefit net additional?
Is the climate benefit based on conservative claims?
Is the climate benefit durable?
Are there impacts beyond carbon?

Additional:

A project’s net additional climate benefit refers to the emissions avoided through deforestation or removed by reforestation. Pachama calculates it using this equation: 

Additional climate benefit = Baseline emissions – Project emissions – Leakage emissions

As represented in the formula, projects must have baseline emissions that are conservative and not too much so as not to overstate their climate impact. The same goes for project emissions; they must not be underreported. Otherwise, the additional climate benefit would be more than what really happened. 

Conservative:

This is where Pachama’s new technology particularly applies to ensure conservative baseline claims. The company is using these concepts to ensure projects have conservative baseline emissions accounting. 

Accounting for baseline is critical because carbon credits are issued based on the difference between baseline and project emissions. 

A baseline is a business-as-usual scenario used to determine expected emissions without the project.

Dynamic Control Area Baseline Results 

The image below shows the project area in white and the control area in blue. Pachama observes forest loss in the control area using remote sensing data. They then compare it with what they’ve observed with the project reported. 

In other words, Pachama calculates project carbon emissions with this formula:

Observed deforestation (hectares) x Carbon inventory (tCO2e/hectare) = Project Emissions (tCO2e)

The chart below shows the company’s dynamic baseline emissions and the associated confidence band relative to project-reported baseline emissions. 

Source: Pachama

Also, crucial to ensuring the quality of carbon credits is considering the issue of leakage. Applying this to forest projects, “carbon credits must represent real emissions reductions and not just a shift of deforestation.” Pachama uses leakage calculations from registry-verified project documents.  

Durability:

Durability, also known as permanence, refers to a project’s lasting climate impact. 

Carbon credits are considered durable if their climate benefits last for at least 100 years. Pachama continues to monitor this by checking the project even after the crediting period through its monitoring technology. 

Beyond Carbon:

Forest carbon projects are sought-after climate solutions because of the other benefits they provide apart from reducing carbon emissions. These include job creation, wildlife species protection, and benefits to local communities. Others refer to them as co-benefits. 

Pachama employs a series of checks to see to it that a project delivers those societal and environmental benefits. 

Launching the Dynamic Control Area Baseline offers great significance over the status quo for four major reasons, says Pachama.

The determination of baseline doesn’t depend on human assumptions and calculations but uses the power of algorithms.
Carbon emissions aren’t projected using historical trends but are produced using satellite data.
It doesn’t assume that baseline perfectly represents the project; rather it factors in uncertainties in baseline scenario selection. 
Interactive tools are available that communicate those variables in simple terms to companies for them to easily understand project performance. 

The improved criteria will ensure that Pachama continues to promote high-impact projects while enabling companies access data to inform their carbon credit investment decisions. 

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Revolutionizing Carbon Credits: ICVCM and VCMI Team Up to Create High-Integrity Voluntary Carbon Market

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The Integrity Council for the Voluntary Carbon Market (ICVCM) and the Voluntary Carbon Markets Integrity Initiative (VCMI) are synergistically joining forces. Their collaborative mission? To meticulously craft an innovative, unified market integrity framework.

This robust system is designed to build confidence among investors in the Voluntary Carbon Market (VCM), assuring them of the superior quality and high integrity of their carbon credits.

Their goal is to enable a high-integrity VCM that the private sector can invest in to complement their efforts in decarbonizing company operations and value chains.  

Setting an Integrated Market Integrity Framework

The collaboration between VCMI and ICVCM is one of the many initiatives that set an integrated market integrity framework. Four crucial things are at stake: quality, credibility, transparency, and accountability across value chains. 

Their joint commitment will define best practices and credibility in using and sourcing high-integrity carbon credits. VCMI’s Co-chair Rachel Kyte asserted the importance of this by saying:

“It is essential that companies have clarity and consistency in how they can credibly use high-quality carbon credits and how this fits into their broader decarbonization strategies.” 

The two key stakeholders in the VCM target to release new standards and guidance in 2023 and beyond. These include the upcoming launch of VCMI’s Claims Code of Practice, which Kyte said is a big part of their collaboration. It is due to launch on June 28. 

The ICVCM’s Core Carbon Principles (CCP) Category-level announcement is also due in the coming weeks. CCP was launched earlier this year and the first assessment decisions and labels for CCP-approved carbon credits will be released later this year.

The CCPs and Claims Code of Practice is global standards that create real, verifiable climate impacts in the VCM.

As the organizations operate these standards, they’ll continue to emphasize that investing in the VCM should supplement established best practices when it comes to creating climate strategies, accounting, and setting targets. 

These standards and approaches include, in particular, the Greenhouse Gas Protocol, Science Based Targets Initiative (SBTi), and CDP’s reporting platform.

By combining their resources and expertise, the VCMI and ICVCM set the stage for a credible VCM with integrity framework. This is critical to build trust and confidence among market players and stakeholders namely, companies, governments, investors, and local communities.

How Can the Framework Help Companies in their Net Zero?

Science shows that investing in carbon credits can help ramp up efforts to prevent global warming from going above 1.5°C. But as long as companies use them as a supplement to their science-based internal decarbonization and net zero strategies.

More importantly, carbon credits can also unlock critical funds for climate solutions that wouldn’t otherwise be feasible. 

ICVCM Board Chair, Annette Nazareth, commented on the partnership: 

“We are joining forces to create a high-integrity VCM that delivers real impact at speed and scale. By building an effective, trusted market, we can unlock investment and exponentially increase the positive impact it creates.”

Giant tech companies like Microsoft, Meta, and Apple have been pouring millions of dollars in the VCM as one means to abate their emissions. They fund projects that either reduce or remove carbon dioxide from the atmosphere. 

The integrated market integrity framework will help companies do their part in bringing the world to net zero emissions by highlighting these important aspects:

Asserting that companies must give priority to their internal decarbonization efforts such as investing in clean energy technologies and processes.  
Defining the complementary role of high-integrity credits in a corporate climate strategy through guidelines that will continuously be improved. 
Enhancing commitment to quantified and verified carbon emissions reduction targets that align with the Paris Agreement goals. 
Promoting adherence to enhanced reporting requirements, disclosure mechanisms, and guidelines on the use of high-quality carbon credits toward net zero.

The announcement came ahead of the “Summit for a New Global Financial Pact” in Paris on June 22 and 23. 

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