Australian wood-fibre processor and exporter Midway was selected this week to lead the development of a new reforestation and afforestation carbon-crediting method that might include pongamia trees, which could lead to harvesting of oil seed to be used in biofuel production.
Carbon projects manager John Lawson spoke with Argus on the sidelines of industry member organisation Carbon Market Institute's (CMI) Carbon Farming Forum in Fremantle, Western Australia, where assistant minister for climate change and energy Josh Wilson made the announcement. Edited highlights follow:
What are the next steps and the expected timeline for this method development?
We have a project team stood up and ready to go, and we have already started engaging a lot of industry expertise and interest to contribute to this through targeted input and workshops.
We're meeting with the Department of Climate Change, Energy, the Environment and Water next week to finalise what the specific milestones are for them and what they want to see, and then we'll be able to have a view as to what we think we can deliver. But we're targeting a 12-to-18-month timeline to get the method to a finalised state to the department.
Is there any estimated carbon abatement potential for the method?
Some of the work we need to do is to shore some of that up, as pongamia is a completely novel activity.
It will depend a bit on how complex the method ends up being, and what the rules are. But a reasonable, conservative rule of thumb might be 100 [Australian Carbon Credit Units] (ACCUs) per hectare, and we've heard people talking about anywhere from 80,000 to 150,000 hectares as potential, which could see significant investment. So, we're talking about millions, if not tens of millions of potential [CO2] abatement.
How different would it be from the expired reforestation and afforestation method?
We're not proposing to change foundationally what the method is — that is, capturing the sequestered carbon in these forests.
It's about creating more flexibility for plantation foresters by expanding what types of forests can be considered under the method to include seed oil crops and other harvest operations, and then have some corresponding changes to the abatement calculations. We're looking to try and simplify some of the measurement and verification approaches.
There's potential to expand the type of both mixed species environmental plantings and commercial forestry species under this method. Importantly, this will also create opportunity for some of the activities previously under the farm forestry method, which sunset [in 2024] and wasn't remade.
And how different would it be from the existing plantation forestry method?
Foundationally, the activity wouldn't be any different, it's just adding a different measurement and verification avenue. Instead of having to use FullCam [Full Carbon Accounting Model] like you do in the current method, it would allow you to do a measurement-based, on-site process.
It's important to note that we aren't coming into this presuming that we have all the answers already. What we gave the department is a clear policy position about what we thought the method could be, specifying three areas of focus: adding woody biomass from seed oil crops like pongamia; adding a measured version of plantation forestry; and what we've called a collection of general method improvements.
Is pongamia the main driver behind this method?
Pongamia seems to be the highest interest species, but that's not to say it's the only species that could be covered under the method. There are opportunities for other species as well.
Our view is not to make this a Pongamia-specific activity, it's to make it specific to those types of seed oil crops. It's focused on woody species that support measurable sequestration in the way that the method currently does.
The minister announced that Midway will be leading a consortium, but no names were publicly disclosed. How many companies are involved and what types of businesses they are?
There's about a dozen companies. The types of businesses that are looking at this are largely emitters, from sectors like transport, mining, energy, LNG.
There's very good interest as well from the forestry sector — many forestry developers were interested in providing support.
This is a bit outside method development, but would the plan be processing the oil seed in Australia to produce biofuels like renewable diesel?
What we're aware of from the people we've spoken to — and we obviously have our pilot project with Rio Tinto — is that the intention is for those seeds to be harvested and processed locally. Just to think about the supply chain logistics, it makes more sense to do that domestically.
And there's certainly a lot of interest and need for biofuels in Australia to help with safeguard mechanism compliance, which is another great benefit of what we're proposing under the method.
This is one way to capture and recognise real carbon sequestration that does exist in the trees, but it also commercially helps to fund these plantations that ultimately provide even greater benefit in reducing supply chain emissions through the biofuel from the oilseed — in the mining industry, or in large freight logistics, or other activities that have to switch from diesel and other fossil fuels.
