(With revisions to remove an incorrect reference to the status of the 2011 reporting periods of CAR688 and CAR802. It was reported that CAR688 and CAR802 both still await more issuances for their 2011 reporting periods. CAR688 and CAR802 in fact have both their 2011 reporting periods retired on behalf of Disney’s 2014 greenhouse gas emissions.)

CaliforniaCarbon.info, October 29, 2015:  Yesterday’s California carbon offset (CCO) issuance announcements confirm another busy week for the Air Resources Board (ARB), in which nine projects were altogether awarded 1,061,851 CCOs, bringing the total issued so far to 30.38 million. 796,438 CCOs were awarded to seven early action projects, while two ARB compliance ozone depleting substances (ODS) projects managed to gain a combined 265,413 CCOs. Including the 161,510 offsets issued by Quebec, a total of 26.44 million CCOs are available for future compliance.

With no further CCOs achieving the shortened invalidation liability, the total CCO-3 pool remains at 4.06 million. Only 3.64 million of these are available for future compliance, with 0.47 million of these already at zero-invalidation status.

Fastest issuance generated under ARB protocol

Diversified Pure Chem’s DPC Domestic ODS Destruction Project #22 (CAR1172) will be receiving 130,995 CCOs. At 54 days from completion of project activity to CCO issuance, this project has now achieved the fastest lead time in the ARB compliance offset program. Having only terminated its reporting period on Sep 3, it has achieved CCO issuance just 18 days after final documentation was uploaded on the CAR database on Oct 9. An EOS Climate project (ACR214) back in July 2015 previously clocked the shortest lead time at 62 days. ODS projects have enjoyed substantially shorter issuance lead times than other project types, with operators taking advantage of a relatively quicker verification process.

A-GAS ODS project gains CCO issuance

A second ODS project, A-GAS Americas 2015-1 (ACR1171) managed by A-GAS Americas, will be receiving 134,418 CCOs. This is the twelfth A-GAS Americas project to have generated CCOs, six of which have come through the ARB compliance protocol, with all six using Ruby Canyon Engineering for verification. The first of these projects (CAR1011) completed verification early enough to avoid the rotation requirement introduced by the 2014 amendment, meaning Ruby Canyon is able to verify a seventh and final A-GAS project (CAR1093). SES has recently been listed as verifiers for CAR1179, A-GAS’ eighth ODS compliance project listing.

By volume of credits, A-GAS Americas and Diversified Pure Chem are the second and fourth most prolific developers for ODS projects in the California compliance offset market, with 1,784,731 and 1,163,135 CCOs issued respectively. By number of projects, Diversified Pure Chem with 17 are 5 ahead of the 12 which A-GAS have achieved. EOS Climate is the most prolific developer for ODS projects with over 4.34 million CCOs generated, spread across 18 projects and 54 reporting periods.

Big day for Blue Source early action projects

Three Blue Source early action projects managed to achieve issuance for no fewer than 21 reporting periods. The most prolific forestry developer receives 306,445 CCOs (64,055 buffered). The Noles South Avoided Conversion Forest Project (CAR802), Noles South Avoided Conversion Forest Project (CAR688) and Pocosin Lakes Forest Conservation Project (CAR676), gain 34,856 (7,290 buffered), 36,597 (7,651 buffered) and 234,992 (49,114 buffered) CCOs respectively. DNV were the early action verifiers for all of these projects. CAR688 and CAR802 both have their 2011 reporting periods retired on behalf of Disney’s 2014 greenhouse gas emissions.

This issuance means Blue Source now have the most credited projects and reporting periods for the forest project type under the California offset program. Blue Source’s share of the volume of issued CCOs is the largest, with 16% (4,841,764) of all CCOs ever generated.

First credits for Tennessee project

Finite Carbon’s MWF Brimstone IFM Project I (CAR582) will get 252,512 CCOs for project activity from 2007 to 2013. This is the first Tennessee-based project to receive CCOs, although Keyrock Energy’s Corinth abandoned mine project (VCS573) has listed over half a million EAOCs for conversion. MWF Brimstone Forest Company were the OPO for CAR582, with Rainforest Alliance serving as the early action verifier.

Finite Carbon now has 6 projects credited through early action and 1 further credited through ARB compliance. Finite Carbon has 2 further projects in the early action pipeline, while of the 21 projects it has listed under ARB compliance, two more received their pre-compliance ROCs in June 2015.

Issuance for Conservation Fund

A final early action forestry project, Conservation Fund’s Big River/Salmon Creek Forests (CAR408), managed to gain 223,000 CCOs (42,905 buffered) across its 2011 and 2012 reporting periods. For both reporting periods there is a combined balance of 196,470 credits which have neither been converted to CCOs nor confirmed to have been retired as CRTs. The Conservation Fund re-listed this project as CAR1100 under the ARB protocol, in early January 2015.

14,481 CCOs for 2 livestock projects

A total of 14,481 CCOs from two livestock projects attained CCOs this week. Fiscalini Farms Anaerobic Digester (CAR589)  received 788 CCOs for a 2012 reporting period. A further 5,955 CRTs from its 2013 reporting period still await ARB’s desk review. Ruby Canyon Engineering was the EAOP verifier, and the project was re-listed as CAR1142 under the ARB protocol in February 2015.

Secondly, the Dairy Dreams project (CAR994), managed by Origin Climate, gained 13,693 CCOs across its 2010 and 2011 reporting periods. The project had previously received 21,010 CCOs during the first issuance announcement for October. First Environment were the EAOP verifiers. This project was re-listed on January 22 this year under the ARB protocol as CAR1097.

Pipeline update

The latest issuances see the early action credit pipeline dip to 8.40 million. ARB has a regulatory deadline of August 2016 to complete issuing early action CCOs for all project types bar rice cultivation.

The ROC pipeline drops to 2.67 million.

Market update

Last week, prices for CCOs traded in the secondary market rose slightly, in line with weeks of sustained upward movement. According to averaged bid and ask quotes from various brokerages, the Golden gained 8 cents from $12.03 to $12.14, the CCO-3 rose 12 cents from $11.26 to $11.38, and the CCO-8 gained 15 cents from $10.93 to $11.08, over the last week.* Offset demand has picked up this year with the expansion of the cap-and-trade program in CP2 to encompass natural gas and transport fuel suppliers.

*Note that the addition of quotations from new brokerages (which have tended to be on the upside for CCO products) has also affected our aggregates.

Next issuance

ARB will next announce CCO issuances in two weeks, on Tuesday, November 10, at 12pm PT.

Rohan Nongpiur (rohan@californiacarbon.info)

Steven Neoh (steven.neoh@climate-connect.com)