California Air Resources Board Issues First Compliance Offset Credits

Kelli Barrett

California’s cap-and-trade program took a step forward as the state’s Air Resources Board (ARB) delivered its first issuance of compliance offset credits for five ozone depleting substance destruction projects. The ARB will continue to issue credits twice monthly starting in October.

25 September 2013 | The California Air Resources Board (ARB) has issued its first batch of compliance carbon offset credits eligible for use in the state’s cap-and-trade program for reducing greenhouse gas emissions. Entities can purchase these credits to offset their carbon emissions and meet their emission reduction obligation that is required in California’s cap-and-trade system.

“The first compliance offset issuance marks a major milestone for the California program,” said Belinda Morris, the California director of American Carbon Registry (ACR), a nonprofit organization that develops carbon offset standards and methodologies and is an Offset Project Registry (OPR) for the state’s cap-and-trade program. “ARB has now set the stage for a steady flow of additional early action and compliance offset projects to be approved for ARBOC issuance this year.”

ARB issued over 600,000 of these ARB Offset Credits, or ARBOCs. And 300,000 of those were issued to the Environmental Credit Corp, (ECC) a North American carbon offset project developer. The credits are for an ECC ozone depleting substance (ODS) destruction project. The other credits were issued to ODS projects as well including three registered with the offset registry, Climate Action Reserve, another OPR for California’s cap-and-trade program. These credits come from early action initiatives, or from projects that voluntarily reduced their carbon emissions and are now generating credits for compliance in the cap-and-trade program. The offsets were developed under the Ozone Depleting Substances Protocol.

According to ARB director, Mary D. Nichols, the offset credits were approved after a rigorous verification program. Offset projects must undergo ARB-approved protocols in order to be used as an offset credit and only credits issued by the ARB are considered compliance credits.

For covered facilities, up to 8% of their compliance obligation can come from carbon offsets.

Beginning in October, ARB will issue compliance credits on every second and fourth Wednesday of every month.