On Aug. 14, 2013, the California Air Resources Board (CARB) released a draft of proposed compliance offset protocols, most notably one concerning methane emissions from mining (MMC). The mine methane offset type is part of the state’s maturing carbon market and intended to provide an alternate compliance option for obligated parties to meet their greenhouse gas (GHG) emission budgets on an annual basis. The MMC proposal intends to set parameters and criteria to measure and quantify reductions achieved by registered mine methane capture projects (e.g., coal, trona mines) to enable them to generate validated offset credits for sale into the marketplace. The MMC, once finalized, will be the fifth eligible offset type authorized to participate in the California market (existing protocols exist for forestry, livestock and ozone-depleting substances) and projects located throughout the U.S. will be eligible to participate.

The MMC has been under development through the Climate Action Reserve for many years, and CARB’s release had been anticipated for some time. However, in light of ongoing legislative debates in Sacramento over potential reforms to the state’s offset regime, the release was a sign of renewed commitment to carbon market cost containment while ensuring robust environmental integrity in the underlying projects. Integrating the economic benefits accruing to MMC-registered projects going forward could provide addition financial incentives for some marginal mine methane destruction projects, but there are a number of diligence and transactional risks and market uncertainties that should be addressed by any developer. Here are a few details about the MMC.

Active Underground Mine Ventilation Air Methane Activities

The MMC applies to facilities that use a ventilation air methane (VAM) collection system and install a qualifying device that destroys the methane in the VAM that would otherwise be vented into the atmosphere. In order to be a qualifying device, the device must not be operating at the site prior to the commencement date of the MMC.

Active Underground Mine Methane Drainage Activities from Active Surfaces and Underground Mines

The MMC applies to facilities that install equipment to capture and destroy methane extracted through a methane drainage system that would otherwise be released into the atmosphere. In order to be considered a qualifying device, the equipment must not be operating at the site prior to commencement of the MMC.

Abandoned Underground Mine Methane Recovery Activities

The MMC applies to abandoned mine facilities that install equipment to capture and destroy methane extracted through a methane drainage system that would otherwise be released into the atmosphere.

The MMC also establishes general eligibility requirements for offset projects including active monitoring and quantification of GHG emission sources, annual reporting and independent verification by a CARB-accredited offset verification body. The project is not eligible for carbon credits if the methane reduction would otherwise be required by a law, regulation or legally binding mandate in place at the time the MMC commences. To be eligible, the GHG reduction must occur as a result of actions taken to meet the MMC and not due to actions that would otherwise have been taken independent of the MMC. CARB is expected to vote on the MMC this October. On Aug. 19, at 1 p.m. (PST), CARB will be hosting an online workshop to discuss the draft MMC. To attend, please click here for a link to the live webcast.

Offset Protocols for Methane Capture in Rice Cultivation

In addition to the release of the MMC proposal, CARB also announced a schedule to release a draft offset protocol for methane capture achieved as part of rice cultivation. The proposed protocol would quantify the reduction in methane emissions from flooded rice fields. The flooding of rice fields causes the decomposition of inorganic matter and the creation of methane. CARB is considering the following three eligible practices for the reduction of methane emissions in California: 1) replacing wet seeding with dry seeding; 2) early drainage at the end of growing season; and 3) rice straw removal after harvest. CARB is considering the following four eligible practices for the Mid-South: 1) early drainage at the end of growing season; 2) rice straw removal after harvest; 3) intermittent flooding; and 4) staggered winter flooding. As with the MMC, CARB is expected to vote on the offset protocols for rice cultivation in October as well.