18 ALASKA RESOURCE REVIEW FALL 2024 Alaska Native Corporations currently in carbon offset market BY TIM BRADNER THE STATE OF ALASKA HOPES TO LAUNCH A NEW FOREST INDUSTRY. But instead of selling logs, the state will sell carbon credits, certificates that encourage landowners to protect standing forests, so they will continue absorbing and storing carbon. Trees absorb and store carbon dioxide and also release oxygen through photosynthesis, a chemical process. The concept is simple. Carbon dioxide stored in state forests can be reliably estimated. Companies engaged in industries that release emissions, such as oil and gas firms, can purchase certificate, also known as carbon credits, to offset their emissions with carbon dioxide stored in trees. One credit equal one ton of carbon reduced or removed from the atmosphere. The landowner, the state in this case, guarantees that the forests will sequester more carbon year over year. The carbon credits are registered with one of several carbon registries that have been formed in recent years . The registries have standards. Landowners, or their agents, must be able to demonstrate that trees on given lands are capable of storing the carbon. There is also an ongoing inspection process to verify that the forests remain intact. Carbon credit sales from forests is a new industry in the U.S. and it is in the initial stages of development. Some companies, working under requirements by state or federal regulators, register their carbon credits under a compliance carbon program, like California’s Cap-and-Trade or Washington’s Cap-and-Invest programs, where emissions reductions are mandated. Alternatively, credits can be sold into the “voluntary” market, where the purchases are made by companies to meet corporate goals for reducing emissions. When Alaska’s program begins, it will sell credits on the voluntary carbon market, according to Trevor Fulton, manager of the state’s new Carbon Offset Program in the state Department of Natural Resources, or DNR. Carbon credits are now being sold on exchanges by Alaska Native corporations, which are private landowners. Since these are private contracts, the details including the sales prices, are confidential. One oil and gas operator, Santos Ltd., has signed up to purchase credits from an Alaska Native corporation so that it can meet corporate “zero emissions” goals for its new Pikka oil project on the North Slope. The state’s program, which will sell carbon credits for forests on state lands, was authorized by the Legislature in 2023. DNR has developed regulations under which the program will be implemented and a Request for Proposals was recently published for a developer who will help the state to: n select the appropriate forest lands n deal with technical aspects like how carbon adsorption rates can be estimated and verified, and n choose a carbon registry in the voluntary market where the state’s credits can be offered. DNR is considering forest tracts in the Tanana Valley State Forest in Interior Alaska and the Haines State Forest in Southeast, but forested state-owned lands in the Matanuska-Susitna and Kenai areas will also be considered. The program will also allow continued commercial timber harvests such as those now done on the state forests. Once it is operating, Alaska will have the largest or one of the largest forest carbon offset programs in the nation. Gov. Mike Dunleavy, who sponsored the legislation creating the program, said new revenues paid to the state can help support forest remediation and improvement, such as removal of timber damaged by spruce bark beetles and reduction of fire hazards near communities. The revenue potential is uncertain, but consultants to the DNR estimated that they could be in the $80 million per year range based on three potential pilot programs. Fulton, of DNR, also said carbon credit programs are helping support new industries in other states and nations, such as the manufacture of carbon “bio-char” from damaged or waste wood that is sold for agricultural or industrial purposes. ALASKA SEEKS SALES OF CARBON OFFSET CREDITS Carbon dioxide stored in state forests can be reliably estimated. Companies engaged in industries that release emissions, such as oil and gas firms, can purchase certificates, also known as carbon credits, to offset their emissions with carbon dioxide stored in trees. One credit equals one ton of carbon reduced or removed from the atmosphere.
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