I wrote the article below for The Climate Trust’s newsletter:
California’s suite of climate policies create two distinct environmental markets: a cap-and-trade market for allowances and offsets, and a Low Carbon Fuel Standard (LCFS) market for LCFS credits. Both generate significant revenues for dairy digesters, but, according to recent informal discussions, the Air Resource Board has decided that biogas projects cannot sell both at the same time. Dairy digesters whose biogas is used as transportation fuel therefore need to determine which market offers the most value. This analysis is trickier than it first appears.
Prices for both offsets and LCFS credits are reported with the same units, dollars per metric ton of carbon dioxide equivalent reduction ($/mtCO2e). The baseline from which each reduction is calculated, however, is different. Offsets are based on the methane emissions that would have occurred if the dairy had not installed a digester. LCFS credits, on the other hand, are based on the reduction from the LCFS’s annual carbon intensity target. The same dairy digester project will therefore generate a very different number of offset and LCFS credits. To determine which market offers the most value, projects need to calculate how many of each credit they could generate.
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I wrote a brief article for Sustainable Business Oregon about the Junction City Biomethane project, and the unique business model it is testing in Oregon.
Oregon Pioneers a New Biogas Model
A webinar I gave for the American Biogas Council on the Low Carbon Fuel Standard and biogas projects. My presentation begins at minute 26:54.
I’m part of a team, along with Ducks Unlimited and The Nature Conservancy, that wrote a carbon offset protocol to credit landowners who place prairie into permanent conservation easements for the value of the carbon sequestered in their soil. The methodology is now approved by the American Carbon Registry and available here. Our work will provided a financial incentive to prevent our prairie from looking like this!
I was very excited to present the work I have been doing assessing the potential value of the Low Carbon Fuel Standard credits, Renewable Identification Numbers and carbon offsets to biogas projects. To put this value into to context, I modeled the returns that could be expected from a 5,000 cow dairy digester whose biogas is cleaned and used as transportation fuel. Here is the summary slide:
This project (with an estimated $11.05 million capital cost) is estimated to have a 7.8% ten year, pre-tax internal rate of return based on the revenue generated by selling transportation fuel, tipping fees, nutrients and bedding. The presentation explores the returns added by selling all three environmental credits under a variety of potential price scenarios.
I’m volunteering for the Community Cycling Center, a non-profit in Portland that promotes biking in low income communities. I’m interviewing Spanish-speaking participants in their programs to tell their story on-line. My first article, Get to know Loudres Montes from ABC, is on the Community Cycling Center’s blog.
Below is my interview with the Harvesting Clean Energy Report about the DeRuyter feasibility study: