Forestry Direct Air Carbon Capture and proven long term storage (Forestry DAC): Some common questions

Why Direct Air Carbon Capture and Storage (DAC)?

Why forestry and not other DAC?

The future of the high integrity voluntary carbon market (VCM) is storage until at least the IPCC end goal of 2100. If that cannot be proven what is sold may be of little practical use for an emitter.

When we refer to DAC this implies not only carbon capture but also proven storage of that capture. In some ways carbon capture and storage (CCS) would be an equally good label, excepting when used in relation to mechanical CCS it implies capturing GHG emissions at their source and then storing them.

A tree is the omni present natural mechanism for direct air capture of GHG emissions. Trees have been capturing CO2 since well before our ancestors came down from them. Mechanical direct air capture does what nature has long perfected. In general terms the process of photosynthesis involves trees inhaling CO2 during the night, breaking the bond between C and O2 and exhaling the O2 back into the atmosphere during the day, keeping the carbon as a building block.

The problem with nature’s DAC (trees and vegetation) is not the capture but the storage. Trees can live for hundreds, even thousands, of years but eventually they die. Being organic they are combustible, and susceptible to climate change, pests, fire, and disease while they are alive. When they are growing trees are net sequesters of carbon. When they are mature their carbon sequestration plateaus and as they enter old age, they turn carbon negative.

Nature has ways to store carbon when a tree dies, known as fossil fuels, but in the last two hundred years humans have reversed this storage by digging (or drilling) stored carbon and burning it. Unfortunately, we have been so good at this reversal that even if we planted trees on every part of the planet that would now nature them, we would not recapture the stored carbon we have released.

The problem with recapturing carbon reversals we have been responsible for is we cannot wait for the process to repeat itself because it takes millions of years and even then, only a small portion of carbon is stored, the majority being released back into the atmosphere when a tree dies. We must compress that process into a few decades. As we burn carbon we have released from permanent storage, GHG is emitted and usually this stays in the atmosphere for hundreds of years until it can be absorbed back into the planet’s ecosystem.

CO2 is not the only GHG but the most abundant. Nature has over millions of years perfected a process where heat from the sun allows plants and animals to thrive but for some of that heat to escape back into space to prevent the planet warming up too much and destroying what it has allowed to flourish. But increases in GHG emissions upset that balance because they trap more GHG than nature intends, and if allowed to continue unchecked will eventually make the planet unliveable.

The UN and IPCC have set targets for slowing and then stopping global temperature rises caused by GHG emissions, requiring by 2050 we get back to the equilibrium set by nature, so more GHG are released back into space as they did two hundred years ago. Doing that will prevent further rises but will not remediate the temperature increases we have been responsible for in the last two hundred years. To not only stop temperature rises but reduce them, we will eventually need to start putting back into deep storage the carbon we have dug or drilled up.

Mechanical DAC, and its cousin, carbon capture and storage at source (effectively capturing GHG emissions as they exit an industrial process and before they enter the atmosphere) take captured GHG and in most cases pump them back into the earth. Done properly that process not only helps stop temperature rises but eventually will help reduce them. But before mechanical DAC can help reduce temperatures, we must capture more GHG than we are presently emitting. That is some way off. Until that happens all carbon capture helps slow temperature rises.

Trees have a shorter time horizon than mechanical DAC. If it can be proved that they will continue to store their carbon until 2100 they will also help stop temperature rises in line with IPCC goals. Admittedly that stored carbon will eventually be released, before stored carbon from mechanical DAC will, but achieving the IPCC goals gives a critical breathing space to find additional ways to neutralise these “horizon” reversals. A problem delayed is for us, our children, and grandchildren a problem that can eventually be solved.

Every effort helps. The planet needs both natural and mechanical DAC (and other CCS) to achieve IPCC goals, in addition of course to reducing GHG emissions in the first place. The key for nature-based DAC (photosynthesis) is proving there will be no reversals before 2100 because evidence shows earlier reversals are not neutral but increase GHG concentrations in the atmosphere, due in part to slowing rates of absorption as concentrations of GHG increase.

One advantage of forestry DAC is nature provides for free what it costs to achieve mechanical DAC (US$250-$600), or mechanical CCS (US$150 on average, but limited to static emitters). Of course, forestry is not free, because it involves land and management costs, as well as lost opportunity costs of selling lumber. But it is much cheaper than mechanical DAC and CCS.

Proven forestry DAC credits (tonne CO2 proven sequestered until at least 2100) are unlikely to be more than 1% of the size of the VCM in 2050, at least according to some credible estimates of the latter. In that context proven forestry DAC and storage is a useful part of a spread of CDR and storage methodologies that a GHG emitter can rely on to make GHG Statements (see Why proving GHG statements is important).

Why PFS Certification Ltd?

PFS has published a standard (PFS Standard Part II version 1) “Best practice for proof forestry CO2 captured remains stored until 2100”, validated to ISO 14064-2 by SGS.

What the PFS Standard does, as a world first, is establish a credible science-based and silviculture focussed standard for ensuring forestry carbon dioxide removals (CDR) are not reversed in the critical period from now to 2100.

Standards are important because emitters want, and increasingly are obliged, to make GHG Statements about how they are countering the effect their processes have on the planet. Unless GHG statements can be defended emitters will increasingly be penalised for making them (see Why proving GHG statements is important).

ISO14064 has always been important, which is why most published CDR and REDD standards hopefully state they “follow” ISO, without being validated to it. It has become even more important after COP29. COP29, together with the UNFCCC’s Supervisory Body (SB), agreed on a process for establishing methodologies for transfers of carbon stocks between countries (ITMO). The SB has already published a draft addressing carbon reversals (SB014-A06), which is exactly what PFS “Best practice for proof forestry CO2 captured remains stored until 2100” seeks to do, and significantly the SB has adopted the principles of ISO 14064-2 (e.g., A6.4-STAN-AC-004) to which PFS Standard has already been validated.

While the Paris Agreement Art 6 focuses on corresponding adjustments (CA) between countries, private transfers will increasingly require validation to those methodologies, with or without a CA. The effect of this will be to marginalise all existing methodologies and standards for forestry capture and storage that cannot be validated to SB014-A06 or its successors, as PFS Standard can be.

REDD and REDD+ programs are likely to suffer the same fate. These programs are sold to emitters not because forests capture carbon but, it is claimed, without an intervention, that carbon will be reversed (the forests will be cut down or burnt). Quite apart from evidence many of these programs wildly overstate benefits to the planet, they are usually in countries where reversal before 2100 cannot be guaranteed (see Why New Zealand?). When SB methodologies are applied, they will not qualify as high integrity.

PFS is the only verifier that offers to verify forestry DAC and proven storage in New Zealand against an ISO validated standard (ISO 14064-2) and have it then verified by a third party VVB, SGS.

Why New Zealand?

Most carbon capture and (long-term) storage takes GHG emissions from the air (DAC) or at source (CCS) and pumps them into underground cavities or the like where they can be proved to remain stable for a long time. That means, for example, no fissures from which GHG can escape and no substantial risk of earthquakes rupturing rock caverns. Occasionally captured GHG emissions do not have to be stored underground but can be incorporated into long lasting material such as cement used in construction.

DAR and (non-forestry) CCS involve GHG (usually CO2) removals which can be measured as reductions against a baseline with the added feature of proven storage of that reduction. Forestry DAC is the same. The PFS validated methodology is not REDD or REDD+ because it captures CO2 before its stores it, whereas REDD does not measure capture so much or seeking to prove without intervention CO2 stocks would be reversed.

For forestry DAC to achieve comparable physical security to non-forestry DAC rigorous assessment of legal, silviculture and climate change risks is required.

Start with legal risks. First it is necessary to register a first ranking charge against felling before the IPCC end date. That means there is a land registration system that is fool-proof, and the integrity of the land title is guaranteed by the Government. It also means a legal system which will protect the land title and the covenant, and that in turn means that laws are robustly enforced to prevent infringement of property rights, not just for a project but country wide, and will continue to be.

Legal risks are like the risk of an earthquake rupturing underground storage. A country without a history of continuous and robust enforcement of property laws and guaranteed land title registration will have a higher risk of ignoring the necessary legal framework (rupturing it) in the future.

Almost all VCM standards currently struggle with the need for legal certainty because most of them are applied to forests in weak rule of law countries. That means there can be no guarantee of long-term storage. It should be noted that payment of money or obligations to replant (following a carbon reversal) will go no way to remediate for weak property laws.

Next is climate change. Trees are more susceptible to climate changes than underground cavities. That makes it necessary to identify countries with the lowest risks from anthropologic induced climate change that impacts on the mortality profile of trees. That includes increases in fire risks, changes in rainfall, increase of diseases and pests and so on. It also means that a high proportion of anticipated CO2 sequestration will need to carry to a reversal risk buffer account. In many countries assessment of these risks will rule out forestry DAC and storage. If the assessed risk of fire for any given site over the years until 2100 is annually 1% change that half the forest will be lost to fire, quite apart from other climate induced risks such as drought, a required reversal buffer account would be so large there would be little or no guaranteed storage.

Even without climate change risks silviculture risks for the site must be rigorously assessed. What is the mortality risk for trees on that site, not just historically but because of planting, such as increased demands on a fragile water table?

Those risks also require tree species that will grow for at least a hundred years and will not turn carbon negative over that time frame.

New Zealand can meet all these requirements, better than most countries.

The next issue is economic. There are several aspects to this. First, emitters who want to intervene to help the planet (and themselves, because of regulatory, financial, supply-chain or marketing pressures) will want the highest sequestration/cost ratio.

On the sequestration side that means fast sequestering species that meet the above constraints. On the cost side that means low land, silviculture, and regulatory costs.

Landowners and foresters who have forests that might otherwise be covenanted against felling with a high sequestration/cost ratio will of course have to be persuaded to sterilise their forests and forgo expected logging revenue and lumber returns, and domestic tax environments will also feature.

Another aspect is additionality. In some countries the regulatory and/or economic environment is such that forests will not be felled regardless of whether a covenant against felling is place on the land title under them. There is no additionality here. What needs to be proved is that without the covenant it is uneconomic not to harvest trees.

Summarising by returning to the sequestration/cost ratio, there may be some forests elsewhere in the world that meet the above constraints and can sequester at the same rate as New Zealand and with a comparably low-cost base, but there will not be many.

Double counting: can I have PFS verified tonnes forestry CCS and NZUs?

New Zealand has an ETS which grants saleable New Zealand Units (NZUs) for certain types of forestry sequestration. The NZ ETS, introduced in 2008 only applies to post 1989 forests. The sale price of NZUs is controlled in large part by new plantings of forests, the NZUs the NZ Government auctions each year, and decisions made by owners of a stockpile of approximately 40m NZUs to sell or not. To put this in perspective, as a country New Zealand emits around 48Tm of CO2-e each year, of which 48% are attributable to agriculture which is not in the ETS.

The grant of NZUs does not depend on proving additionality, nor on maintaining a GHG emissions inventory. Crudely put, if you have an eligible forest and you can prove gross sequestration you are granted a saleable NZU. This has led to a general perception that it would be double counting to issue voluntary credits for tonnes of sequestration already granted NZUs. The required analysis is not so straightforward.

Two people counting the same object does not necessarily lead to double counting. The issue is always why each is counting. One person counts every car that passes (to determine whether the road needs upgrading) and another counts every white car that goes past (to advise what colour cars should be imported): their individual totals added to together does not result in more cars going past.

To extend the analogy, one person counts sequestration that will not be reversed and is additional, another counts all sequestration. Same result. No-one is intending to add the two totals together.

PFS only counts sequestration that the UNFCCC will recognise as helping the planet. If a government is willing to give grants to foresters for planting trees, the grant being calculated by reference to temporary sequestration and without regard to additionality or longevity, that is not double counting sequestration the UNFCCC recognises as helping the planet. And it does not matter if a forester planted the forest to obtain government grants or not.

This black and white approach can admittedly become nuanced if the intention of the grant is to create a carbon market and thereby influence decarbonisation behaviour and the grant was an inducement to plant the forest. However, this only creates an apparent but not a real criticism of the black and white approach. Unless it can be proved the grant is responsible for the trees not being felled before 2100, the grant does not incentivise decarbonisation within the context of a functioning carbon market as it is either a neutral factor or makes decarbonising behaviour less likely because it increases supply into the market driving down the price of carbon.

Corresponding adjustments are accounting entries when supporting named covenants against felling.

Corresponding adjustments (CA) are adjustments to the NDCs of two countries, one a debit and the other a credit. Under the Paris Agreement these may be available either under Art 6.2 (ITMOs) or Art 6.4 (Carbon Credit Mechanism). Article 6.2 applies when a country finances emission reduction projects in another country. The resultant reductions are transferred as ITMOs, credited to the country providing the financing and debited to the country where the project is situated. This is called the “cooperative approach.” ITMOs are exchanged directly between countries (not through a central UN system).

While ITMOs apply at country level they can track private agreements, putting the onus on parties to that agreement to negotiate the terms of an ITMO, especially as it affects the host country.

Applying Art 6.2 to PFS verified DAC this would require another country to buy them, crediting its NDC and NZ debiting its NDC.

While there is some background debate around whether NDCs are substantive or simply track data, the reality of the PFS methodology is that the substantive impact on climate change is the first ranking covenant that is required to be registered against the land title on which the forest is growing preventing felling before 2100 at the earliest, and which can have the name of a GHG emitter added. In that context adjustments to NDCs track that enduring and provable benefit, not the other way around.

The Art 6.4 carbon crediting mechanism is a centralized market-based mechanism overseen by the SB. It only applies to projects in developing countries so would not apply to PFS verified forest DAC.

Why proving GHG statements is important.

GHG emitters are prepared to contribute to CDR projects either to allow them to make GHG Statements about how they are attempting to remediate the effect of their past, present or future GHG emissions on the planet, or for an unrelated purpose (such as supporting biodiversity). PFS is supportive of biodiversity and encourages it after 2100, but it does not help the planet meet 2100 IPCC goals unless species selection allows the fastest possible sequestration before then. If not, efforts at achieving biodiversity before 2100 will likely retard, not assist, the need to rapidly slow and then halt rising global temperatures, because more suitable alternatives are available.

In addition to making GHG Statements about how they are attempting to remediate the effect of their emissions on the planet, GHG emitters are at the same time coming under pressure from supply chain partners, activist directors and shareholders, bankers, insurers, and the like to show they are taking emissions remediation seriously. Sometimes those pressures will require GHG statements be made. If so, they will be subject to the same constraints as GHG Statements that an emitter choses, or is required, to make, which are addressed below.

Emitters can often choose whether to make GHG statements, e.g., for marketing (“green” sells). These are public statements. Increasingly, and at the same time, emitters are being required to make GHG statements in their financial reporting documents, and in market statements and offerings. These may be public or semi-public. As already noted, private GHG statements may be required by supply chain partners, bankers, or the like. But whether public, semi-public, or private, GHG statement cannot be misleading.

The trend, already in some existing consumer protection and financial markets participation rules, is to penalise emitters who make express or implied GHG Statements about how their actions are helping the planet if that cannot be proved. This is and will be enforced by either statutory regulators or by private suit where breach of reporting, consumer protection and financial markets participation rules will be a necessary addition to any statement of claim. “Greenwashing” lawsuits are here and will increase. Emitters will find it increasingly difficult to treat awards against them as a management cost as non-monetary legislative penalties are tightened.

Further, “helping the planet” will be tested by what can be more effectively done at the same cost or with no harmful externalities, and by whether a touted practice leads to domestic or international leakage (meaning emissions that are reduced, removed or avoided at one site are increased at another).

Already cherished corporate strategies are being directly threatened. For example, in the Australian Federal Court an emitter is being challenged to prove “offsets” (and by implication “in-sets”), carbon avoidance projects and short-term reversable CDR projects help the planet, as the emitter implies.

The result is likely to be that GHG emitters will only have a safe harbour for GHG Statements they wish to make if they can prove storage of carbon until at least 2100 and clearly state that, assuming they can prove all other necessary conditions exist, such as additionality.

This may well lead to emitters having to make honest and straightforward statements such as “we have been responsible for capturing and provably storing xx tonnes CO2 until at least 2100 (and we can prove this helps the planet achieve IPCC 2100 goals)”.

Making such a statement will require proof of storage and that will require a CA or validated compliance with SMB014-A06. PFS Standard Part II version 1 “Best practice for proof forestry CO2 captured remains stored until 2100”, validated to ISO 14064-2 by SGS, does that. So too will mechanical DAC and CCS, and some biochar, but forestry DAC does it much more efficiently and cheaply.

Other than the above processes, no other standards or methodologies available today adequately prove long-term storage, or if they can, after over crediting is discounted and appropriate reversal buffer accounts are established, at anywhere near the sequestration/cost ratio the PFS Standard can achieve.

What consumers and their lawyers are now realising is that while GHG statements can be controlled by climate change regulations, they are also controlled by regulations that either predate or are not directly related to climate change, such as consumer protection laws against misleading statements. Proof of compliance with one does not immunise the need to comply with the other.

This double hurdle is largely overlooked by current published methodologies. Attempts to prove compliance with UNFCCC rules without proving storage, if that is even possible, one often in complete ignorance of the need to ensure GHG statements comply with laws operating alongside of climate change regulations, meaning proving they are not misleading if they imply the planet is being helped.

Because the tonnes of CDR and proven storage which will be available to the VCM market is unlikely to ever be sufficient to meet the need for high quality credits that will comply with both climate change and other unrelated regulations, even taking into account projects which reduce GHG emissions, the price of proven long-term storage tonnes will increase.

Additionally, PFS Standard Part III Version 1 “Best practice for legal risk assessment for greenhouse gas statements (GHG Statements) implying long term storage of CO2 removals after tonnes CO2 sequestration forestry removals verified under Part II or otherwise complying with PFS-IB-018” allows GHG emitters to test GHG statements are compliant with relevant regulations before making them, as a defence to later lawsuits.