The Race to Avoid a Biomass Carbon Credit Crisis

The carbon offset market is in the throes of a multi-year downturn after mounting evidence of pervasive accounting flaws depressed sales. A new report from the nonprofit Clean Air Task Force aims to prevent history from repeating itself in the more nascent market for carbon removal credits.

Researchers at CATF assessed the leading methods used to certify carbon removal credits for projects involving biomass and found that they lack a common framework. Almost all contain notable flaws.

Biomass, in this context, is essentially any organic material integrated into a carbon removal project, from trees or corn burned in a bioenergy plant to human waste set to be injected underground. Interest in biomass-based carbon removal methods has surged in recent years. Roughly 88% of all carbon removal credits sold to date are associated with a biomass project, according to the leading industry database CDR.fyi. That’s because biomass-based projects tend to generate more plentiful or affordable credits than other types on the market.

Many of these sales are pre-orders based on future projects, however, and have yet to deliver certified credits. That opens a window of opportunity to improve the certification process in time to make those credits fully count.

“We wanted to look under the hood of this approach to CDR while it’s in this early stage of development to help ensure that as it scales, there are robust standards,” Kathy Fallon, the director of the land systems program at the Clean Air Task Force, told me.

Carbon removal registries, which certify carbon credits, publish detailed “protocols” describing how companies should measure, verify, and declare the amount of carbon removed by a given project. The report analyzed 25 protocols in total, using a uniform list of 18 criteria to assess each one. Those criteria included how the protocols accounted for uncertainty as well as indirect emissions and co-products related to the project, such as when a project both produces energy and removes carbon. They also looked at rules for monitoring the stored carbon, and whether the protocols included safeguards in the case that any of the carbon ended up back in the atmosphere, among other things.

The 25 protocols were assessed on a scale from “fundamentally flawed” to “exemplary,” though none received a grade at either extreme. Seven were deemed “satisfactory,” 12 were “weak,” and six were “very weak.”

The goal was to create a roadmap for how the industry could strengthen accounting methods in the future, since many of the registries issue regular updates to their protocols. But the carbon removal industry is reluctant to admit to shortcomings, and clearly on edge about anything that could undermine public trust, as evidenced by events leading up to the release of the report. An earlier version of the supplemental materials to the report shared exclusively with Heatmap tied each protocol's score directly to the registry that developed the protocol. When I reached out to some of the registries for their views on the report, they vehemently rejected the findings. Shortly after, CATF informed me that it would edit the supplement to anonymize the scores.

“Our goal with this work is to set the bar for strong standards and encourage improvements across the board,” the group told me in an email when I asked why it made the change. “To that end, we chose to focus our study on establishing a rubric and making recommendations that apply to all protocols rather than scoring protocols against each other in a nascent industry.”

Funnily enough, despite labeling some of the methods as “flawed,” Fallon told me the authors were struck by how good they were overall.

“We were pleasantly surprised that while there is a ways to go, and an opportunity to strengthen these standards, they’re in a relatively good place compared to what we saw in the forest carbon credit market,” she said.

CATF published a similar report last year, assessing 20 protocols used to certify forest carbon offsets and finding that almost none of them was strong enough to ensure the credits delivered their promised climate benefits. It was not the first report to reach such a conclusion — the issues with forest carbon credits had been well-documented in earlier peer-reviewed studies and media reports. Broken trust contributed to a major downturn in the carbon credit market that began in 2022 and has persisted.

While earlier generations of carbon credits, including the aforementioned forest offsets, represented CO2 emissions that had supposedly been prevented, carbon removal credits are tied to efforts that remove existing CO2 in the atmosphere. In theory, it’s easier to prove you did something than to prove you prevented something from happening. Still, the accounting gets complicated. That’s because measuring carbon removal still requires the thorny and somewhat subjective exercise of lifecycle analysis — the act of tallying up all the emissions associated with an activity from start to finish to calculate the net effect on the atmosphere.

“Calculating a carbon removal credit is a lot like doing your taxes,” Fallon told me. “Good accounting is everything.” She continued the metaphor: With your taxes, you start with your total income and then subtract deductions to arrive at your net income. In the case of carbon removal, you begin with the total amount of carbon stored at the end of the process and then subtract the emissions generated along the way. “Getting those deductions right can make a really big difference in the final result,” Fallon said.

This is uniquely tricky for any project involving biomass, in part because the result will vary depending on when you consider the project to “start” — when the biomass is being cultivated, when it’s harvested, or further down the line. To see why this makes a difference, it helps to understand the four types of biomass projects the report analyzes:

• Biomass energy with carbon capture and storage, also known as BECCS, which involves burning biomass for energy or turning it into a fuel, e.g. ethanol, and capturing and storing the resulting carbon emissions from the process.
• Biochar production, where organic, carbon-rich material is heated in a low-oxygen environment and converted to a charcoal-like substance that resists degradation.
• Biomass burial, where raw biomass — like sticks from the forest floor — or processed biomass — like sewage sludge or oil made from cornstalks — is buried or injected underground.
• Carbon stored in materials, such as long-lived wood products that prevent carbon in the wood from re-entering the atmosphere or cement that incorporates carbon dioxide from a BECCS system.

Each of these methods relies on the natural process of photosynthesis to suck up carbon from the atmosphere and store it in plants. Without an intervention like one of those listed above, that carbon would naturally return to the air when the plants decompose, or are digested and turned into waste, or are burned for energy.

Or would it? That’s one of the questions CATF argues project developers must consider before they can get an accurate estimate of their net carbon removal. The report suggests that companies should document whether some portion of the carbon in their biomass might have been sequestered regardless, either by migrating underground through the soil, or by being incorporated into a wood product used for construction.

More than half of the certification schemes analyzed in the report failed to account for some or all of the carbon flows that occur prior to the project’s key intervention, including this "alternative fate of the biomass” consideration. Other such “upstream” carbon emissions include those from fertilizer use, farm equipment, land use change, and transportation of the biomass.

Some project types appeared to have more rigorous methods than others. Five out of six protocols for biomass burial scored “satisfactory,” while only one for biochar and one for BECCS earned that label. Three of the six protocols for biochar were deemed “very weak.”

The report underscores a divide between what independent scientists consider to be best practice for carbon accounting and what the registries have decided is acceptable. In general, the registries — which included Puro, Verra, Isometric, Gold Standard, and others — treat projects with co-products differently from projects that are purpose-built for carbon removal.

For example, the protocols generally agree that an ethanol plant retrofitted with carbon capture should ascribe the emissions from the production of biomass to the ethanol and leave them out of the calculation for carbon removal. Most biomass burial projects, on the other hand, where the only product being generated is the carbon credit, must take into account all the emissions associated with growing the biomass.

The report authors object to this logic, which provides an accounting advantage to the former project type and hurts the latter. The end result could be two projects that sequester nearly identical amounts of carbon, but one churns out far more credits than the other.

While the authors take issue with many different aspects of the protocols, one of the biggest problems they identify has less to do with these individual failures and more to do with the overall picture of the market. They found significant variation among the protocols on almost every criteria, which risks creating buyer confusion over whether one biochar credit, for example, is more “legit” than another.

Daniel Sanchez, a principal scientist at the advisory firm Carbon Direct who was not involved in the analysis but reviewed the report for CATF, told me his takeaway was less about the flaws in the protocols and more about how it showed the need for greater consistency.

“That’s what it’s going to take for a market to actually develop around this,” he said. “I think Microsoft would want to know that it’s getting pretty much the same thing from a Puro biochar credit that it’s getting from an Isometric biochar credit, right?”

While the fact that no protocol scored higher than “satisfactory” sounds bad, Sanchez said he has a “glass half full” view of the market. In his view, not all of the criteria the authors analyzed were crucial. For example, none of the biochar protocols except one required that projects account for the emissions embedded in the equipment used to create the biochar. The CATF report considered this “fundamentally flawed.” But those emissions are typically pretty small, Sanchez said, “so I don’t think that’s a super serious knock on credit quality.”

“Every protocol can be made better,” he added. “Is this report enough to say that the protocols that really didn’t match those crucial features, does that mean that they’re invalid? It’s a little harder to say.”

Fallon agreed that the results were more instructive than worrisome, describing the existing protocols as a “solid foundation.”

“There are areas of weakness, and there’s room for improvement,” she said. “This is the time for the registries to lean in and tighten up the protocols to ensure that there’s strong public trust in the climate outcomes.” she said.