weisberg 2011 biocycle
DESCRIPTION
TRANSCRIPT
Value of Carbon Offsets from Composting and Digester
Projects
Peter WeisbergBiocycle Global 2011
San Diego, CAApril 6, 2011
The Climate Trust
• Provided $11M in financing to carbon projects
• Reduced 2.5 million mtCO2-e
• Offset programs– First U.S. state-based
compliance program – Oregon– First voluntary state program -
Colorado– First by natural gas-only firm –
NW Natural3
Priority project sectors
1. Dairy Digester 2. Organic Waste Digestion3. Composting4. Forestry
Carbon Offset “Profit”=(Offsets)(Price) -
(Transaction Costs)
Dairy offset revenue- 2,500 cows; digester reduces 8,750 mt CO2e every year
$= (Offsets)(Price) – (Transaction Costs)
Price = $6
Year 1 Carbon Sales Profit: $10,000
Year 2-10 Carbon Sales Profit: $40,000
NPV (10 years, 7%) = $250,000
Transaction Costs
• Project Preparation: $20,000 - $50,000 upfront
• Verification: $8,000 - $12,000 annually• Monitoring equipment: $0 - $15,000
upfront• Registry fees: $0.23/credit issued
Importance of Scale
• Dairy projects need 1,000+ cows• Organic waste digestion or composting
projects need 15,000+ tons of eligible feedstock per year. Eligible:
• Post-consumer food waste• “Agro-industrial” waste water
California’s Carbon Market
• Cap-and-trade system begins in 2012• Offsets = 8% of compliance
– 1st Period (’12-14) – 39 million offsets– 2nd Period (‘15-17) – 92 million offsets
• Air Resource Board approved offsets– CAR Livestock (Dairy Digesters)– CAR Forestry– CAR Ozone Depleting Substances
California Carbon Market: Supply Currently ~2.2 million eligible offsets
Carbon Price• Air Resource Board Approved:
– $7 - $9– Small transactions, ~25,000 offsets
• Un-Approved:– $3-6
• Future– Legal challenges – More protocols
Value of Carbon Credits to Dairy Digester
• 2,500 cow digester• ~3.5 mt CO2e per cow per year
• ~8,750 mt CO2e reduced
Carbon price($/mt CO2e)
$4.00 $8.50 $15.00
Net Present Value(10 years, 7%)
$165,000 $440,000 $840,000
% of Capital Cost(~ $2.1 million)
8% 20% 40%
Value of Carbon Credits to Organic Waste Digester
• 40,000 tons of MSW food waste• ~0.5 mt CO2e per ton of food waste per year
• ~20,000 mt CO2e reduced per year
Carbon price($/mt CO2e)
$4.00 $8.50 $15
Net Present Value(10 years, 7%)
$410,000 $1 million $2 million
