Insights
J.S. Held Strengthens Forensic Accounting and Financial Investigations Expertise and Expands Suite of Services in Canada with Acquisition of ADS Forensics
Read MoreA Carbon Takeback policy marks a paradigm shift in the world of voluntary carbon offsetting. The idea is pretty straight forward: We still need to use some fossil fuels as the world decarbonizes, but every tonne of carbon dioxide that is emitted from burning fossil fuels needs to be balanced by permanently storing a tonne of carbon dioxide. Based on this concept, there is a call for a new carbon trading mechanism known as a Carbon Takeback Obligation (CTBO) to incentivize the growth of the carbon dioxide storage industry.
Here are three key takeaways you need to know when developing a CTBO program for your organization:
Traditional offset credits vary drastically with regard to the project type, additionality criteria, and permanence. As a result, many traditional offset credits are low quality and can inflict reputational damage on your organization. A CTBO is of the highest environmental integrity as it ensures that every tonne of carbon dioxide emitted from burning fossil fuels is balanced by permanently storing a tonne of carbon dioxide. In this way, a CTBO helps to incentivize the growth of the carbon dioxide storage industry. The carbon dioxide storage industry is currently in its nascency. Those organizations that act now to lock in long-term supply will serve as a catalyst for the scale-up of this vital industry.
Traditional offset credits are largely made up of avoidance-based activities (for example, preserving existing forests or generating electricity with renewable sources). While avoidance-based activities are necessary for mitigating climate change, they are not enough. We also need to remove carbon from the atmosphere and permanently store it. When a company purchases a traditional carbon offset credit, it will use it to neutralize emissions from elsewhere in its operations. Since the avoidance-based activity emits no carbon, the increase in atmospheric carbon impact is equal to the carbon emitted from the company’s operations. This is a better state than having no avoidance-based activities (for example, it is better to have renewable electricity with zero emissions and the company’s operational emissions than it is to have electricity generation with coal plus the company’s operational emissions). However, offsetting with avoidance-based activities still results in a net increase in atmospheric carbon. What is needed is a negative emission technology to truly neutralize the impact of the company’s operational emissions. Currently, carbon accounting standards are evolving to recognize this distinction. Organizations that react now to this changing reality will be ahead of the curve.
When carbon is removed from the atmosphere, it represents a negative emission. However, simply removing the carbon is not enough. We also need to store it to prevent its release back to the atmosphere. Carbon can be stored in geospheric, biospheric, and atmospheric carbon stocks. Not all storage options are created equal with regard to their permanence. Ultimately, long-duration storage of carbon is the most helpful in combating global climate change. A CTBO employs a like-for-like principle. That is, if carbon is taken from the geosphere and released to the atmosphere (as is the case when we extract fossil fuels and combust them), it needs to be matched by the capture of atmospheric carbon and its storage in a geological formation. The goal of the like-for-like principle is to match timescale and permanence of carbon sinks. Companies that plant tress to offset fossil fuel emission should take note. The status quo will likely have a limited runway under this new paradigm shift in the world of voluntary carbon offsetting.
When developing a Carbon Takeback Obligation (CBTO) program for your organization consistent with CBTO principles, experts can help to build credible net-zero strategies, source high integrity carbon offset credits, and understand the mechanics of Carbon Takebacks and how they can benefit your organization.
We would like to thank Steven Andersen for providing insights and expertise that greatly assisted this research.
Steven Andersen is a Senior Vice President in J.S. Held’s Environmental, Health, and Safety (EHS) practice. Steven has spent over 17 years in the EHS industry, with specific experience in air emissions management systems, information management systems, and data integration. He commonly fills the role of sponsor on large scale implementation projects, consults on Environmental, Social, and Governance (ESG) strategy and data management, and has performed the role of solution architect on many air emissions system implementations. As the founder and chief executive officer (CEO) of Frostbyte Consulting, Steven was responsible for strategy, partnerships, and business development. Under Steven’s leadership, Frostbyte grew into a company that delivers ESG and EHS advisory and information systems globally across all industry sectors.
Steven can be reached at [email protected] or +1 368 209 1012.
Stay up to date on the latest trends & developments in the carbon offset markets & gain a better understanding of the supply & demand for the different offsets available....
The new clean fuel regulations in Canada aim to lessen carbon intensity of transportation fuel by 2030. This paper discusses how primary fuel suppliers can prepare and comply with the forthcoming regulations. The following information...
We discuss the options proposed by ECCC, the scope of the proposed emissions cap, and what to expect from upcoming ECCC communications regarding the emissions cap decision....