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.

Savanna carbon: great plains?

Savanna Carbon

Savannas are an open mix of trees, brush and grasses. They comprise up to 20% of the world’s land, 30% of its annual CO2 fixation, and we estimate their active management could abate 1GTpa of CO2 at low cost. This 17-page research note was inspired by exploring some wild savannas and thus draws on photos, observation, anecdotes, technical papers.

Palm oil: what CO2 intensity?

CO2 intensity of palm oil

Global palm oil production is running at 80MTpa in 2022, for use in food products, HPC products and bio-fuels. CO2 intensity of palm oil is assessed in this short note and data-file.

Palm oil is controversial, as it is linked to destruction of virgin rainforests, c40% of recent production has been associated with deforestation and c20% has been associated with peatland degradation.

The purpose of this data-file is to estimate the CO2 intensity of palm oil production, in tons of CO2e per ton of crude palm oil. We have aggregated data from 12 technical papers, and also constructed our own bottom up estimates.

Excluding land use impacts, we think palm oil production most likely has a CO2 intensity of 1.2 tons per ton, which is also an OK baseline estimate for responsible palm oil producers.

On a global average basis, including land use changes, we think CO2 intensity is around 8 tons per ton, assuming 40% of the land was deforested and 20% peat-degraded. The worst case scenario is a CO2 intensity of 20 tons/ton.

All of this matters for biofuels. Biodiesel sourced from the world’s average palm oil (8 tons/ton) is going to have 2.5x more emissions than burning conventional diesel. Likewise, if renewable diesel is produced from 65% used cooking oil, 35% palm oil, then again, it will have a higher CO2 impact than conventional diesel (model here).

To read more, please see our article here.  Our main conclusion is that bio- and renewable diesel expansion plans may be stymied by tighter feedstock constraints and regulations (note here).

CO2 intensity of wood: context by context?

CO2 intensity in wood

CO2 intensity of wood in the energy transition is calculated in this data-file.

Context matters, and can sway the net climate impacts from -2 tons of emissions reductions per ton of wood through to +2 tons of incremental emissions per ton of wood.

Covered contexts include deforestation, sustainable forestry, commercial thinnings and gathering fallen biomass; which is cross-plotted against wood fuel displacing gas, wood fuel displacing coal, wood material displacing steel/cement, wood products displacing plastics and paper.

Calculations can be stress-tested in the data-file, including all of our carbon accounting and counterfactuals for the fair, apples-to-apples CO2 intensity of wood. For more on our carbon accounting philosophy, please see here.

Recent Commentary: please see our articles here and here.  Specifically, this data-file lays out the calculations for our 13-page note. It highlights climate negatives for deforestation, climate positives for using waste wood and wood materials (with some debate around paper), and very strong climate positives for natural gas.

Finnish forests: a two billion ton CO2 case-study?

Finland forests CO2 removals

Can forestry remove CO2 from the atmosphere at multi-GTpa scale? This 19-page note is a case study from Finland, where detailed data goes back a century. 70% of the country is forest. It is managed sustainably, equitably, economically. And forests have sequestered 2GT of CO2 in the past century, offsetting two-thirds of the country’s fossil emissions.

Finnish forests: trees, yields, costs, value?

This data-base aggregates interesting numbers from the Natural Resources Institute of Finland, which is effectively a ‘gold standard’ for forestry data.

It spans across a national industry that produces 75 mmcm of wood per year, while having also accumulated 1bn tons of biomass over the past century. The industry generates €20bn per annum in value while supporting 60,000 jobs.

A good rule of thumb is that a Finnish forest will accumulate around 5 m3 of biomass per year, mainly pine and spruce, worth around €60/m3 (gross), while the costs of forestry are around €20/hectare/year and the costs of harvesting are around €20/m3.

Splits are also given in later tabs of the data-file between pines, spruce, birch, other species, saw wood, pulp wood and thinnings.

UK reforestation projects: 25 case studies?

This data-file reviews 25 examples of forestation projects in the United Kingdom, which have followed the UK Woodland Carbon Code.

Our conclusion is that the projects are high-quality. They are largely ‘incremental’ in the sense that most are situated on abandoned or marginal grazing land. They are conservative, mostly placing c20% of expected CO2 credits into a buffer account.

Many also cite co-benefits providing habitats for wildlife (in some cases, plans are quite detailed), recreational enjoyment, tourism, intercepting flood-water and creating employment.

Our conclusion remains that you have to somewhat ‘hate nature’ to not want more reforestation projects like these on a sensible roadmap to net zero.

Another key to the data-file is to plot the typical distribution of parameters such as project size, CO2 uptake (per acre), intended life-span, species diversity, prior land use, intended use of wood, buffer reserves and other forestry practices (charts below).

Forest carbon: biodiversity impacts productivity?

The purpose of this data-file is to estimate the impacts of bio-diversity on carbon absorption in forests. We have done this by reviewing ten technical papers.

The average result in global meta-studies is that bio-diverse forests take up 15-25% more CO2 than mono-culture counterparts.

The best studies found that highly bio-diverse restoration projects can take up 50-70% more CO2, which was also correlated with the total number of species in a classic ‘log’ relationship.

Full details of individual studies, and our notes, follow in the data-file.

Carbon neutral investing: hedge funds, forest funds?

This 11-page note considers a new model of ‘carbon neutral’ investing. Look-through emissions of a portfolio are quantified (Scope 1 & 2 basis). Then accordingly, an allocation is made to high-quality, nature-based CO2 removals. This allows portfolio managers to maximize returns, investing across any sector, while also neutralizing the environmental impacts.

Copyright: Thunder Said Energy, 2022.