California’s Air Resources Board (ARB) on Wednesday said it had received all information necessary to make a ruling in its investigation over 15,070 offsets issued to a livestock methane project in Indiana.
The statement kicked off a 30-day regulatory period during which ARB’s Executive Officer will weigh the evidence, culminating in a verdict over whether the credits, awarded to the T&M Bos Dairy offset project, were generated while the facility was in non-compliance with state laws.
If the facility is found to have been in breach of Indiana permitting rules, the offsets, originated by project developers Environmental Credit Corp., which was bought by Pennsylvania-based ClimeCo last year, will be invalidated.
“After the 30-day period begins, the Executive Officer may issue the final determination at any time and does not need to wait for the 30-day period to conclude,” ARB said, adding that the ruling’s publication will be announced ahead of time to ensure all market participants receive the information simultaneously.
Once it’s released, any offsets determined to be valid from the batch that was blocked from being transferred when the investigation began last September will be unfrozen.
T&M Limited Partnership, which operates the dairy farm, last year told Carbon Pulse that it was confident that its offsets would will not be invalidated.
According to ARB data, the project in June 2014 received a total 4,077 early action California Carbon Offsets (CCOs) for abatement activities in 2011 and 2012, and a further 10,993 vintage-2013 units last July.
ARB has not disclosed in whose online registry account(s) the CCOs are currently being held.
Any further offset issuances to the T&M Bos Dairy project have also been suspended for the duration of the probe.
Under California law, if an offset project is found to not have been in compliance with environmental, health and safety regulations at local, state or national levels during its reporting period, ARB can invalidate the CCOs issued against emissions reductions achieved during that timeframe.
Standard offsets can be declared ineligible for up to eight years after they have been issued, presenting a large degree of regulatory risk for investors and participants in California’s carbon market.
CCO ISSUANCES
Separately, ARB on Wednesday reported that it had issued almost 1.3 million offsets to five projects in the first two weeks of 2016.
By far the largest recipient, getting just over 1 million early action units for reductions made between 2006 and 2009, was a coal mine methane capture project in Wyoming operated by Peabody Natural Gas, LLC.
ARB also shortened the invalidation timeframe from three years from eight for some 146,000 offsets issued to two projects last August.
California has now issued 36.1 million offsets, of which 13 million were used for compliance in the first two years of the scheme.
By Mike Szabo – mike@carbon-pulse.com
