The University of Kentucky’s Department of Forestry has completed a project to help hardwood sawmills determine the feasibility of increasing revenues by selling carbon credits tied to their role in producing long-lived wood products that store carbon.
Previously, the Chicago Climate Exchange’s (CCX) carbon offset market recognized Long Lived Wood Products (LLWP) and the role of hardwood sawmill lumber in the production of LLWPs that sequester carbon and ultimately reduce GHG emissions. This opened the door for an alternative income stream for hardwood sawmills.
But the CCX’s carbon offset market ceased trading December 31, 2010. The market had been depressed with credits registering levels at or below $0.25 per ton for the majority of 2010 and finally closed at the end of the year. This was in stark contrast to the high of $7.00 per ton in the market the year before when this project was established.
The CCX was the only significant CO2 offset market in the U.S. and the only market that included LLWPs. Upon closing of the CCX the direct usefulness of LLWP as means of supplying sawmills with an alternative source of income ceased to exist. While over-the-counter markets have sprung up they do not recognize LLWPs.