FAQ’s
WHAT IS THE WCI?
The Western Climate Initiative, or WCI, was started in 2007 by five Western US States with the goal of developing a multi-sector, market-based program to reduce greenhouse gas emissions. The WCI provides administrative and technical services to support the implementation of state and provincial greenhouse gas emissions trading programs. The WCI is the world’s third largest carbon market and the largest in North America.
WHAT ARE THE REQUIREMENTS FOR FORESTED LAND TO BE ELIGIBLE FOR AN AVOIDED CONVERSION (AC) PROGRAM?
- Forested lands must be situated on lands that are privately owned prior to commencement of the program.
- must demonstrate that the project land is under a significant threat of conversion to a non-forest land use.
- must be entirely covered by a qualified conservation easement or entirely transferred to public ownership.
- must be defined through the required appraisal process.
- must be determined to have a “higher and better use” as a residential development, commercial or industrial building development, agricultural production or mining use or a recreational use.
- can be contiguous or separated into tracts, and
- may not include land that is subject to a conservation easement with federal holders.
HOW MANY CREDITS PER ACRE DO THE PROJECTS GENERATE IN AN IFM OR AC PROJECT?
There are numerous factors that determine the projects yield of carbon credits per acre. Maturity and density of trees, species of trees and in the case of Avoided Conversion programs, the lands “higher and better use” all come into play to determine the carbon credit yield.
WHERE MUST PROJECT LAND BE LOCATED TO BE ELIGIBLE FOR THE WCI?
To be eligible for the WCI, projects must be located anywhere in the United States or Canada.
HOW IS THE PRICE OF CARBON CREDITS DETERMINED?
HOW ARE CREDITS GENERATED?
For each metric ton of carbon emissions that has been destroyed or sequestered through a project and verified by a third party auditor, the project will be issued one carbon credit by a program registry whose protocol was used. These issuances can occur on an annual basis or other time horizons depending on the wishes of the project owner and the registry.
HOW LONG DOES A PROJECT LAST?
The duration of a given project depends on which protocol is used and the ability of a project to continue to sequester carbon and adhere to the operational requirements of the protocol. For example, many forest projects can continue to produce credits for as many as 20 to 30 years from the inception of the project.
WHAT ARE THE REQUIREMENTS FOR A COAL MINE TO BE ELIGIBLE UNDER THE MINE METHANE CAPTURE (MMC) PROGRAM?
- Active surface mines and active underground mines must be classified by the Mine Safety and Health Administration as active, intermittent or temporarily idle.
- abandoned underground mines must be classified as abandoned or abandoned and sealed.
- project must be located in the United States.
- project must capture methane that would otherwise be emitted to the atmosphere; and
- project must destroy the captured mine methane through an eligible end-use management option.
HOW MANY YEARS A CARBON PROJECT TYPICALLY LAST?
Projects lengths vary depending on the individual circumstances of a given project. It is not uncommon for IFM projects to generate credits for as many as 25 or 30 years.
CAN COMPASS CARBON ASSIST WITH PROJECT FINANCING?
Compass Carbon works with several lenders who can assist land owners with their up front development expenses.
HOW DOES THE COMPASS CARBON ENGAGEMENT PROCESS WORK?
Compass Carbon will conduct initial due diligence on your property to confirm it meets protocol guidelines and to assess project feasibility. Upon completion, Compass Carbon will provide you with a project development plan and budget.
HOW DO YOU DETERMINE WHICH PROTOCOL TO USE?
Compass Carbon will conduct an initial assessment of your potential project and will determine which protocol is most appropriate given the specific circumstances of the project.
WHAT IS COMPASS CARBON'S PROJECT DEVELOPMENT FEE?
Compass Carbon’s fees are determined on a project by project basis. Generally, we partner with the land or project owner and receive a percentage of the revenue over the life of the project.
WHAT IS THE MINIMUM ACREAGE YOU WOULD CONSIDER FOR AN IFM PROJECT?
To be considered for a project, we prefer a parcel of forested land to be a minimum of 5,000 acres.
WHAT OTHER SERVICES DOES COMPASS CARBON PROVIDE?
Compass Carbon is a full service “end to end” vertically integrated sustainability solutions provider. We handle everything from the initial project planning, financing, ongoing operations, management of timber operations, and the selling of credits to our network of buyers.
WHAT ARE THE REQUIREMENTS FOR FORESTED LANDS TO BE ELIGIBLE FOR AN IMPROVED FOREST MANAGEMENT (IFM) PROGRAM?
- Forested lands must be situated on either private or public lands, excluding federal lands.
- must be situated on land that has a greater than 10% tree canopy cover.
- can be contiguous or separated into tracts.
- may not include land that is subject to a conservation easement with federal holders.
WHAT IS THE TYPICAL TIMEFRAME REQUIRED FOR THE PROJECT TO BEGIN ISSUING CARBON CREDITS?
Depending on the project type and methodology used, the initial carbon credit issuance can be expected tanywhere from 10 to 16 months from the commencement of the project.
WHAT ARE THE PROJECT DEVELOPMENT COSTS?
Project development costs are contingent upon the type of project and protocol used and are determined on a case by case basis.
WHAT ARE THE SIZE OF THE MARKETS?
In 2020, global compliance-based carbon markets increased in value by nearly a fifth from $215.1 billion USD to $279 USD in value, marking a fourth consecutive annual rise and a fivefold jump within three years.
In 2019, the European carbon market, the world’s largest by volume and value, rose in worth by 30% to €169 billion to make up the largest share of the global total.
In 2019, North America’s two main carbon markets, the Northeast US’ RGGI scheme and the WCI, when combined ranked second globally in volume and value at 1.67 billion metric tonnes and $24.79 billion USD respectively.
[Source: Refinitiv]