July 2024 Methodology Updates (1/n)

This article is an automatically translated version of the original Japanese article. Please refer to the Japanese version for the most accurate information.

This is a newsletter from Sustainacraft Inc.
Methodology Updates is a series that covers methodologies for Carbon Credits and Biodiversity Credits. This article primarily introduces the revisions to the Improved Forest Management (IFM) Methodology by ACR (American Carbon Registry).

As mentioned in this newsletter, while the revision of VCS Methodology VM0045 now allows for the Issuance of Credits with a Removal label from IFM projects, ACR's IFM Methodology had already enabled the assignment of Removal labels since 2022. While an increase in demand for Removal Credits is anticipated, IFM projects are primarily based in the U.S., where costs are relatively low and political risk is minimal. Therefore, it is important to monitor their trends as a stable source of Removal Credits.

This revision primarily concerns Baseline setting, and since Removal Credit quantities are mainly determined by the project scenario, the direct impact on Removal Credit volumes may be small. On the other hand, the quantity of Credits with an Emission Reduction label is highly dependent on the Baseline. Project design varies based on Credit revenue (the sum of Removal and Emission Reduction Credits), meaning this revision is likely to have a significant impact on the design and quality of IFM projects.

Please direct inquiries here.

“Return of the Jedi”: Satellite LiDAR Mission GEDI Operation Extended

Before delving into the main topic, let's briefly introduce a technological development related to forest Biomass monitoring.

Are you familiar with the GEDI (Global Ecosystem Dynamics Investigation) satellite mission? GEDI, short for Global Ecosystem Dynamics Investigation, is a LiDAR sensor developed under the leadership of NASA and the University of Maryland, aimed at investigating terrestrial vegetation. It is installed on the International Space Station.

The history of vegetation monitoring using satellite Remote Sensing is long, and approaches that create and analyze indices correlated with Biomass from optical satellite imagery have been widely used. However, such indices face a problem: their values saturate once Biomass density reaches a certain level, making accurate estimation impossible beyond that point.

On the other hand, due to the characteristics of the LiDAR sensor, some of the pulses emitted by GEDI penetrate vegetation and reach the ground. By analyzing these reflected waves, it is possible to roughly estimate not only vegetation height but also its 3D structure. Furthermore, it provides Biomass estimates using this information. While GEDI data certainly has various limitations, it is an indispensable product for global Biomass surveys, and we utilize it in various aspects of Carbon project analysis at our company.

GEDI began operations in early 2019, but NASA's original plan was to end its operation after about two years (extended to four years midway) and then re-enter it into the atmosphere for incineration. However, due to its significant contributions to the scientific community, numerous experts requested its continued operation (as reported by The Guardian), leading NASA to decide on an extension of its operational period. As a result, after a dormant period of approximately one year from March 2023, it resumed operations in April 2024.

The above background is introduced in an article titled "Return of (the) GEDI". In Japanese, it's "Jedi no Kikan" (Return of the Jedi), which is an homage to Star Wars Episode VI (incidentally, "Jedi" in Star Wars is spelled Jedi).

Since operations are currently planned until 2030, its continued contributions can be expected across various fields as we approach the 2030 Net Zero interim targets!

ACR's IFM Methodology Revision: Stricter Baseline Calculation

On July 1, 2024, ACR released v2.1 of one of its IFM Methodologies, "Improved Forest Management (IFM) on Non-Federal U.S. Forestlands" (hereinafter, the Methodology). This is positioned as a minor revision to v2.0, which was released in 2022. This revision covers a wide range of aspects, but the main focus of the changes is the stricter setting of the Baseline. Specifically, these are: 1) adding constraints to be considered when identifying the Baseline scenario, and 2) dynamic reassessment of the Baseline.

According to ACR's announcement, the total area of projects using this Methodology is 2.4 million acres, and the cumulative Issued Credits amount to 24 million tCO2. While it appears that it will not be immediately applied to existing projects1, the long-term impact of this revision is expected to be significant.

Revision Point 1: Addition of Constraints for Scenario Identification