Nature-based CO2 removals: a summary?

Overview of nature-based CO2 removal

This data-file is an overview of nature-based CO2 removal projects that we have been supporting at Thunder Said Energy. Our research ‘scores’ different nature-based projects on a 100-point scale, using criteria to check whether they are real, incremental, measurable, permanent and bio-diverse. The average project supported so far scores 70/100 and sells CO2 offsets at $5-50/ton.

In 2022, we spent $8,000 to support five projects, which have most likely ‘credited’ 480 tons of CO2, for an average cost of $16/ton. Projects span across Costa Rica, Nicaragua, Kenya, Uganda, Indonesia and Madagascar.

The average nature-based reforestation initiative that we supported in 2022 scored 70/100 on our framework for assessing nature-based CO2 removal projects, and was priced at $17/ton of CO2.

Two of the projects scored over 80/100. Whereas three of the projects were given lower scores, due to question marks around whether they were fully incremental, fully measurable, or fully bio-diverse.

Overall we were least concerned about whether the projects were real, as most of them were issuing CO2 offsets that had been certified by Verra or Gold Standard, independently audited and with detailed documentation.

Overall we were most concerned about whether the projects were permanent, in turn a good reason to consider complementary solutions such as CCS and DAC projects?

Statistical distributions are also explored in this data-file, as there are clearly going to be ‘uncertainties’ in natural remediation projects: both implementing the projects over 40-year timeframes and quantifying the CO2 benefits.

The statistical distributions of nature-based CO2 removals are not normally distributed. We estimate our own probability distributions in the data-file. More on CO2 measurement in our allometry research.

A Monte Carlo approach can be used to quantify nature-based CO2 removals across a portfolio. Overall, we are 75% confident that the projects we supported in 2022 have offset over 400 tons of CO2, and 90% confident they have offset over 300 tons of CO2.

You can download this data-file for an overview of nature-based CO2 removal projects we have supported to-date. Or see our nature-based CO2 removals category for full details on the underlying projects.

CO2 removals: CO2OL Panama project?

CO2OL reforestation project

The CO2OL Tropical Mix project has planted 9M trees on 13,000 hectares of degraded pasture land across 45 sites in Panama since 1995; 40% teak, 60% native species; to produce sustainable hardwoods, especially for furniture, on 25-year rotations; while 20-30% of the land is reserved for conservation and bio-diversity. The project achieved a relatively high score of 88/100 on our usual assessment framework. CO2 credits are priced at $38/ton. We contributed $1,900 to the project and offset 50 tons of CO2.

Panama’s CO2OL Project is a reforestation project, established in 1995, and managed by German environmental services company Forliance. As part of our ongoing work into nature based solutions to climate change, and to practice what we preach in offsetting our own CO2, we have scored the project on our usual 100-point scorecard (others linked here).

Real. The CO2OL project is certified by Gold Standard, independently audited, and has high quality imagery and offtakers. Our score was mildly marked down for a complex corporate structure, which has been modified over time.

Incremental. Reforesting former cattle pasture in a country losing 0.4% of its primary forests per year. Minor “leakage” has been considered and deducted from CO2 calculations.

Measurable. The calculation methodology is clear, realistic, includes “give-backs” and baselines, is backed up by satellite/GIS data, has been audited, and de-risked by diversification.

Permanence. After harvest, hardwoods will lock away carbon in furniture, which has good carbon credentials as a wood usage. Score is marked down due to country transparency, long-term future and complex corporate structure.

Bio-diverse. The project is 40% teak, 60% spread across 5-20 native species, creating animal habitat and up to 200 jobs, although we marked down mildly as rotations are short at 25-years.

Full details on the CO2OL Reforestation project, which led us to the scores above are given in the data-file. Despite recent media scandal-mongering into nature-based solutions, we were happy to find a project that scores relatively well on our framework.

CO2 offsets: Pachama’s AI platform?

Pachama CO2 offset review

Pachama is a nature-based technology company, which has raised $79M, to create a portal where buyers can choose “from rigorously vetted forest restoration and conservation projects”, which in turn are tracked using proprietary AI. This data-file is a Pachama CO2 offset review. We have assessed the portfolio, some challenges and our own experiences, via our usual framework for assessing nature-based CO2 removals.

As of November-2022, the majority of projects available on Pachama’s portal are avoided emissions projects. These are excellent conservation projects, accredited by VERRA, protecting vulnerable eco-systems, and achieving some of the highest biodiversity scores of any projects that have crossed our screens.

However, it remains debatable whether these projects can be considered to be “offsetting CO2”. CO2 credits are not being awarded for pulling additional CO2 out of the sky and storing it in a natural eco-system, as per other CO2 removal projects that we have assessed.

Rather, CO2 offsets are being issued relative to a hypothetical scenario where a protected forest is deforested at a rate of 1-2% per year (varies by project) over the next 20-70 years (chart below).

We think that over time, Pachama would like to seed new forests, and more incremental projects on its platform, but for now there is limited depth in the nature-based CO2 market, and most of the certified CO2 offset projects are REDD (conservation) projects.

In one of the largest CO2 offset projects in the Pachama portfolio today, CO2 offsets are issued relative to a scenario whether a carbon-dense, 26-000 year old peatland is drained and thus caused to release c500MT of CO2. Blue carbon eco-systems can store a lot of carbon, over 1,000 tons/hectare, possibly over 2,000 tons/hectare. But 500MT is a truly enormous number. It is equivalent to the direct annual emissions of the entire global fertilizer industry per our CO2 breakdown. This raises some question marks.

It gets a bit philosophical, but in our view, carbon “offsetting” should be about cancelling out the net impacts of emitting +X tons of unavoidable CO2 into the atmosphere by pulling out -X tons of CO2 from the atmosphere and sequestering it over the long-term. Not by avoiding a further +X tons of emissions. (Morally, you cannot atone for a murder by enumerating the list of people you have not murdered !!).

We want to support conservation of nature, and high-quality organizations in nature-based solutions; and so we allocated $700 to offset 40 tons of CO2 from the Pachama portfolio at the current price of $17.6/ton. However, our overall experience was somewhat disappointing: per the Pachama website, we thought we were buying from “Pachama’s global portfolio of high-quality forest projects” (screenshot above). But after making the purchase, all of our purchase ended up allocated to the single, large peat conservation project, described above.

Further details on our Pachama CO2 offset review are in the data-file. We have also appraised other CO2 removal projects using the same framework.

CO2 removals: teak plantations, Nicaragua?

Nicaragua reforestation case study

The “Nicaragua High Impact Reforestation Program” should remove over 100,000 tons of CO2 from the atmosphere, by row-planting teak trees across >500 hectares of former pasture land in Nicaragua. It is our fourth detailed case study of nature based CO2 removals in 2022, with a price of $45/ton, and a passable score of 70/100 on our framework. But this Nicaragua reforestation case study also illustrates some challenges and debates around nature-based solutions.

Great virtues of this project are that it is real, incremental and measurable. The CO2 credits are certified by Gold Standard, and we were able to review 100 pages of documentation from independent auditors, verifying the CO2 removals; which seem to be measured conservatively, including a 20% ‘buffer’ for reversals.

This region of Nicaragua has been 80% deforested for cattle-grazing. There is a clear CO2 benefit to reforesting former pasture-land. GDP per capita is below $2,000 in the country. Hence it is also helpful for well-meaning investors to provide capital to convert degraded land into carbon-absorbing forests. CO2 credits contribute to the return on that investment.

Furthermore, around 25-30% of the total area in the project is residual forest, especially around water-courses, which will be preserved. This is nature-positive. Although CO2 credits are not being issued against this forest conservation.

However, this particular reforestation project is 100% row-planted teak, which will be harvested and re-planted on a 20-year cycle. Teak is not even native to Central America, but originates from South-East Asia. Some critics might argue that a short-life, row-planted mono-culture is not really ‘a forest’. And if you are not creating a forest, is it really re-forestation?

This is the logic behind the project achieving a score of 70/100 on our framework. Further details and debates are laid out in the data-file, exploring whether this Nicaragua reforestation case study can be considered ‘permanent’ (yes and no!), ‘biodiverse‘ or ‘nature positive’. So are the key numbers from our review.

We have made a $1,000 allocation to this project, in order to offset 22 tons of CO2. Our goal is to support one nature-based CO2 project each month, and to size the allocation according to the ‘score’ each project achieves on our framework.

CO2 removals: TIST, Kenya and Uganda?

TIST CO2 Credits

TIST is the International Small Group and Tree Planting Program. It was founded in 1999. By late-2022, it has planted 23.6M+ living trees, coordinating the efforts of 137,700+ subsistence farmers, of whom c40% are women, sequestering 8M+ tons of CO2 across 40,000+ hectares of “degraded land”, mostly in Kenya and Uganda.

We scored TIST CO2 credits on our usual framework for assessing nature-based CO2 removals, deriving a relatively high score of 84/100.

The project scored highest on the categories of ‘realness’ and ‘additionality’. VERRA certification is a great help in de-risking that a project is real, as there are over 1,000 pages of independently verified documentation to wade through.

On additionality, Kenya has lost 12,000 ha of forest per year from 1990 to 2005, according to FAO. VERRA document clearly concludes that the project is reforesting degraded land, which would not be possible without a well-functioning carbon market.

On biodiversity and co-benefits, over 150 species of trees are found in the project area, and there are areas of high conservation value, including around national parks. For each $1, TIST has cited $8 of co-benefits for low-income farmers.

On permanence, this is possibly the area with most room for improvement on our CO2 assessment framework. Further details on TIST CO2 credits’ strengths and possible risk factors, are outlined in the data-file.

We made a $1,500 donation to the project, with CO2 credits costing $30/ton at the time of writing, to restore nature, provide fair income to subsistence farmer communities, and abate 50 tons of CO2. This is the third nature-based CO2 removal project we have supported this year, and the full list is here.

CO2 removals: Eden Reforestation, Madagascar?

Eden Reforestation CO2 removals

Eden Reforestation is a non-profit, founded in 2004, aiming to counteract deforestation and extreme poverty. Thus, local community members are hired to collect seeds, start nurseries, plant trees, and oversee newly emerged forests.

By summer-2022, Eden states that it has ‘produced, planted and protected’ 977M trees, across 280 sites in 10 countries, while paying fair wages to 14,800+ employees.

Madagascar is its largest country of operation and explains up to 80% of its global footprint. Hence we have appraised Eden’s activities in Madagascar on our ‘framework’ for scoring nature-based CO2 removals.

The overall score is 59 out of 100 in our Eden Reforestation CO2 removals review. We are confident that Eden’s activities are real and incremental, with high scores in these categories. However, Eden is a charity that plants trees in return for donations. It does not issue verified CO2 credits. Thus it is always liable to score poorly on the ‘measurability’ component of our framework. Permanence and biodiversity scores had a mixture of positive attributes, risks and challenges, for reasons noted in the data-file.

Overall, we believe Eden offers a cost-effective model for CO2 removal, with other ESG co-benefits. We estimate the effective CO2 price achieved by donating to Eden’s Madagascar program may be as low as $3/ton, on a risked and discounted basis, using our usual CO2 calculation methodology, although uncertainty is very high. $3/ton also squares with our mangrove model.

We have made a $1,500 donation to Eden’s Madagascar program in August-2022, which we believe should offset 500 tons of future CO2 on a risked and discounted present basis. Although this cannot be guaranteed and our 95% confidence interval is 50 – 1,500 tons. Donations are also open on the Eden Reforestation website.

Carbon offsets: cost of CO2 removal per tree planted?

Cost of CO2 removal per tree planted

The purpose of this data-file is to calculate the cost of CO2 removal per tree planted, using a simple modelling methodology, based around the tree’s risked and discounted future carbon absorption.

The reason this is important is that some organizations, especially charities, are committing to plant trees in return for financial contributions. But in order to compare this option with other CO2 abatement options, we need to convert the units into $/ton of CO2.

This is actually quite difficult and variable. ‘Planting’ can range from scattering seed balls through to raising seedlings for 1-3 years in nurseries and then planting them out carefully. ‘Trees’ can also ultimately range from 40kg mangroves through to the 2,000 ton General Sherman Redwood.

Our methodology estimates how many tons of CO2 will be absorbed per tree as it grows to maturity, then ‘discounts’ future CO2 removals into ‘present CO2 terms’, then risks the calculation according to the survival rates and permanence of the CO2 absorption.

A good rule of thumb is that tree-planting should cost $15/ton of CO2 that is removed on a risked net present carbon basis. Numbers can realistically vary from $10-100/ton, but will mostly be in the $15-30/ton range.

Costs are likely lower than fully certified and verified nature-based CO2 removals. The trade off between lower-cost and lower-quality CO2 removals can be evaluated on a case-by-case basis (examples here).

Our key points on the cost of CO2 removal per tree planted are highlighted in our article here.

CO2 Removals: BaumInvest Mixed Reforestation, Costa Rica?

BaumInvest Mixed Reforestation Review

This BaumInvest Mixed Reforestation review is the first report in a new series evaluating nature-based CO2 removal projects, to assess whether they are real, incremental, measurable, permanent and bio-diverse, using a quantitative, apples-to-apples framework. Over time, we will use this framework to inform our own CO2 offsetting, and hope it is helpful for an increasing number of clients who are looking to do the same.

In this data-file, we have assessed the BaumInvest Mixed Reforestation Project in Costa Rica (Gold Standard overview here), on our 100-point review framework.

The project is generating 5kTpa of CO2 removal credits, after reforesting former over 800 hectares of pasture-land in Costa Rica in 2007-2012, with semi-wild plantations, comprising 40 combinations of 17 tree species. We think 75% of c75 sub-plots comprise 3-species, c20% comprise mono-cultures and another 25% of the project area is natural forest.

The project achieved a score of 82/100 on our framework. It scored weakest on permanence (12/20) as timber will periodically be harvested from the plot, albeit using continuous cover forestry practices, and enabling slower-growing species to mature as part of the land’s long-term re-forestation. The project scored highly for being incremental (20/20), real (17/20), measurable (17/20) and bio-diverse (16/20).

As a result, we have purchased 67 tons of CO2 removals from the project, at $45/ton, for a total consideration of $3,015 in July-2022. Details are in the short data-file below.

To read more about our thoughts on the BaumInvest project, please see our article here. To find out how they nature-based CO2 removals are re-shaping the energy transition, please see our article here.

Carbon offsets: costs and leading companies?

Carbon Offset Costs

This data-file tabulates the costs of carbon offsets being offered to consumers and commercial customers by c30 companies. Prices are surprisingly low, ranging from $4-40/ton of CO2.

Which projects are most economical? Costs are lowest at forestry projects, particularly at companies where you pay “per tree” rather than “per ton” of CO2. They are also lower at non-profits (which also means contributions are tax-deductible). Finally, they are lowest at companies undertaking projects directly, rather than as “middlemen” (charts below).

Are they CO2 offsets real? The also file contains detailed notes on each company, to assess their credentials. Moreover, it tabulates 1,600 carbon offset projects which are assured by agencies such as the ‘Verified Carbon Standard’, Gold Standard and Green-E, for a broader perspective.

Offset your own CO2? We have used the data-file to select and allocate carbon offsetting dollars to Eden Reforestation, One Tree Planted, The Gold Standard and Sea Trees. We are happy to discuss CO2 offsetting with TSE clients and those using the data-file.

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