SAN FRANCISCO, April 9 California air regulators on Wednesday issued the first carbon offset credits for a forest protection project, credits that power companies and others large emitters can use to meet their compliance obligations under the state's greenhouse gas reduction program.
The California Air Resources Board, which administers the program, issued 836,619 offset credits for the Yurok Tribe Sustainable Forest Project, which covers about 8,000 acres of tribal land in California's Humboldt County.
In return for the credits, the landowners have agreed to maintain or increase carbon stored in the trees for more than 100 years. The land is the ancestral homeland of the Yurok Tribe.
The credits are currently worth about $10.25 each, according to one carbon market participant.
Utilities such as Pacific Gas and Electric and Southern California Edison, a subsidiary of Edison International , have recently expressed interest in buying offset credits to help them meet their compliance obligation under the program.
Those companies as well as oil refineries and large manufacturers will be required in November for the first time to turn over allowances and offsets to account for their output of heat-trapping greenhouse gases.
Offset credits typically trade at a discount to California carbon allowances (CCAs), which closed at $12 a tonne on the IntercontinentalExchange on Tuesday.
"Twenty percent of the world's GHG emissions come from deforestation," said Linda Adams, chair of the Climate Action Reserve board of directors, which registered the project and did its initial verification.
"The issuance of these forest offset credits signifies a legal commitment to long-term forest protection and demonstrates the effectiveness and benefit of market mechanisms to encourage environmental action," she said. (Reporting by Rory Carroll; Editing by Steve Orlofsky)