Transcript Title of Blue Source Presentation 28 Point Verdana Bold

The Forest Protocol & Project Case Study
Alligator River Avoided Conversion Project
California Cap-and-Trade Workshop
Climate Action Reserve
June 14, 2011
Overview
 About Blue Source
 Forestry Project Commercialization using the CAR Protocol
 Case Study: Alligator River Avoided Conversion Project
 Forestry’s Role in the Carbon Markets
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About Blue Source
Carbon Credit Portfolio
Blue Source has
built the largest
portfolio of North
American emission
reduction credits
and projects.
 Leading domestic project development and marketing for over
10 years
 100-200M tonne portfolio (function of specs)
 Have sold over 20M tonnes over the past 10 years
 Projects sourced from 49 states and most provinces in Canada
 Transacted what is believed to be the largest volume voluntary
sale to date (9,000,000 tCO2e)
 Transacted what is believed to be the highest value voluntary
sale to date ($12,000,000)
 Federal and state carbon advocacy leadership
 Developed the first protocols in numerous carbon categories
 More CAR listed forestry projects than any other developer
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Forestry Project Commercialization using the CAR Protocol
Blue Source has
extensive experience
in creating and
selling tonnes in the
market. Speed,
technical knowledge,
and pricing
strategies are central
to the service
offering
 Feasibility Study / Due Diligence
 Project Submittal Form
 Forest Carbon Inventory – Design and Implementation
 Management Plan
 Project Design Document (PDD) Development
 Verification
 Registration
 Marketing
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Alligator River Avoided Conversion Project
 2,750 Acres in Hyde County, NC
 Permit to convert to agriculture
 Based on anticipated carbon
revenue decided to protect forest
via easement instead
 Native forest stands consisting of
mixed pine and bottomland
hardwoods
 Pre-sold tonnes to help achieve
near term revenue to landowner
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Alligator River Avoided Conversion Project
A lot of steps:
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Designation of Authority Form
Project Submittal Form
Attestation of Title
Boundary Map
Signed Easement
Inventory
Growth Model
Monitoring Plan
Project Design Document
First Verification
Project Implementation Agreement
Initial Registration of Tonnes
Marketing of Project
Ongoing monitoring/verification
Transfer of Tonnes to Buyer
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Process to date:
 First biomass CRTs issued
 Verification of first soils-based CRTs
underway (ARB stakeholder call confirmed
inclusion)
 First-of application of protocol – many
delays but will be a model for others to
follow
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Forestry Demand
Offset Type (% Volume) Traded in Global Voluntary Market in 2010
Forestry garnered 42% of the
market, a total of 29 MtCO2e.
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Forestry Supply
 Domestic forest offset projects have gained momentum due to primacy as a
compliance grade offset in draft regional and federal legislation, strong demand in
the voluntary market and inclusion of forestry protocols in all domestic registries.
 Vast landscape of project types and geographic diversity
 Improved Forest Management (IFM)
 Avoided Conversion (AC / REDD)
 Afforestation
 Reforestation
 Potential volume on par with CCS or Renewable Energy
 320 MT/yr US supply (McKinsey, 2007)
 Challenges exist in aggregating numerous small projects and landowners
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Blue Source – The Nature Conservancy
‘Working Woodlands’ Program
Landowner Benefits
• No up-front, out-of-pocket costs
• Full forest + carbon inventory and assessment
• 10-year FSC management plan and certification
• 100% of FSC-certified wood product revenues
• 50%+ of forest carbon revenues – important new source of annual cash flow
• Inclusion in landscape-scale conservation project designed by TNC
Public Benefits
• Focus and protect public/private investments
• Active and engaged landowners
• Repair degraded forests; maintain desired conditions
• Keep working landscapes working and in private ownership
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Blue Source Transaction Structures
 Unit-Contingent
 Portfolio Firm
 Pre-Compliance Diversification
 Options
 Upfront Financing Considerations
 Fixed and Variable Pricing
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Thank You!
Kevin Townsend
Chief Commercial Officer
Blue Source
P: 801.438.1540
E: [email protected]
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