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September 2021 – open access articles The following articles are taken from Energy World magazine’s September 2021 edition for promotional purposes. For full access to the magazine, become a member of the Energy Institute by visiting www.energyinst.org/join
Offshore renewables
WIND FARM DEVELOPMENT
Legal and technical obstacles blow US offshore wind off course Despite ambitious expansion plans for its offshore wind sector, there are fewer than 10 turbines operating in US waters today. Can the country realise its ambitions in line with its targets? Or will technical and regulatory hurdles stymie growth? Jennifer Johnson evaluates progress so far.
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he US will likely fall short of the Biden administration’s target of installing 30 GW of offshore wind capacity by 2030, according to new analysis by IHS Markit, an information provider. Bottlenecks in permitting processes and supply chains – combined with a lack of grid connection infrastructure – led the firm to conclude that Biden’s goal will ‘almost certainly be missed’. Such is the difficulty of building a new industry from the ground up. Though offshore wind has proven to be a massive success across the Atlantic in Europe, there are no utility-scale offshore wind farms currently operating in the United States. Enthusiasm for the technology is undoubtedly building, thanks in no small part to the Biden administration’s embrace of renewable energy and carbon reduction targets. In May, the US Department of the Interior gave the green light to the 800 MW Vineyard Wind 1 project, which looks likely to be the country’s first major offshore wind project. Scheduled to be operational in 2023, IHS Markit believes the project is likely to be subject to delays because of the US Bureau of Ocean Energy Management (BOEM)’s lengthy investigations of impacts of construction. ‘Over time and with scale, as more and more offshore wind farms in the United States are consented, equipment manufacturers will be more
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There are only two offshore wind projects operating in the United States, both developed by Danish wind energy titan Ørsted. The Block Island Wind Farm, off the coast of Rhode Island, began commercial operation in 2016 and generates enough power for 17,000 homes. Photo: Ørsted
willing to invest and build local supply chains and new installation vessels,’ says Andrei Utkin, Principal Analyst for clean energy technology at IHS Markit, in a statement. ‘But it will be a gradual process as the industry needs to see a rich pipeline of consented projects and a clear regulatory framework before committing to invest billions of dollars in local factories.’
Initial opposition Developers have been trying to build a wind farm off the coast of Massachusetts near Nantucket for more than a decade – and have faced notable hurdles along the way. An application for a commercial lease in the area was first made to the federal government in 2001. But it would be another nine years before officials finally permitted a 25-year
Offshore renewables
commercial lease. The proposed Cape Wind project would have been visible from the islands of Martha’s Vineyard, an exclusive vacation destination for the wealthy. Local residents, including the late Senator Edward Kennedy and the billionaire industrialist William Koch, opposed the project. It wasn’t just NIMBYism that hampered Cape Wind, fishing communities were concerned that construction in the area would hurt their business, and some environmentalists expressed concerns for the health of birds, whales and other wildlife. The local Wampanoag indigenous tribes also claimed that wind turbines would disturb spiritual sun greetings and possibly ancestral artifacts on the seabed. The Alliance to Protect Nantucket Sound, chaired by Koch, raised $40mn to repeatedly challenge court decisions that favoured Jim Gordon, Cape Wind’s developer. Ultimately, Gordon abandoned the project in 2017, with legal challenges and missed construction deadlines making it difficult to plot a practical way forward. In an interview with The New York Times,
According to analysis from Environment America Research & Policy Center, offshore wind resources in the US are significant enough to produce more electricity than the country currently consumes
The future is floating? Earlier this year, the BOEM and the Department of Defense agreed to lease almost a thousand square kilometers off the coast of central California for the development of offshore wind. However, due to the depth of the water at the site, turbines would have to be mounted on floating foundations, rather than fixed to the seabed. A potential lease auction for the sites could be held sometime in 2022, though some developers have had their eyes on the potential sites for years. Three years ago, the German offshore wind developer EnBW joined forces with Seattle’s Trident Winds to develop a 1 GW floating wind farm, known as Castle Wind, in the Morro Bay area. In 2019, the companies signed a memorandum of understanding with a local firm, Monterey Bay Community Power, for a future power purchase agreement. The project would consist of around 100 floating offshore wind systems, each moored to the ocean floor using anchors. The individual floating units would then be connected using inter-array cables. The types of floating support structures and wind turbines that developers plan to use have not yet been announced. Meanwhile, Redwood Coast Offshore Wind – a joint venture between developers Ocean Winds and Aker Offshore Wind, in partnership with Redwood Coast Energy Authority and Principle Power – is looking to build a 150 MW floating wind farm off the coast of Humboldt Bay. Spanish-headquartered Ocean Winds has already developed the 25 MW WindFloat Atlantic pilot project off the coast of Portugal. The turbines were mounted on semi-submersible foundations designed by Californian firm Principle Power. Both the Morro Bay and Humboldt Bay projects would need major onshore port facilities to assemble turbines and their floating platforms. Building out this infrastructure will require support from both the state and federal governments.
he concluded: ‘I guess I was 10 years ahead of my time.’ Future wind farms in the area, such as Vineyard Wind, will be constructed further out to sea, so as to be invisible from land. However, this doesn’t mean they’re without ongoing controversy. The fishing industry, in particular, has been vocal about its concerns over the impact wind farms could have on fish stocks by interfering with navigation and changing ecosystems. Ongoing pushback Vineyard Wind received a record of decision from BOEM and the US Department of the Interior (DOI) – the final major step in the federal regulatory process – in May this year. The development immediately drew criticism from the Responsible Offshore Development Alliance (RODA), a coalition of fishing industry associations and companies. In a statement, RODA claimed that the decision includes ‘effectively no mitigation measures to offset impacts to critical ocean ecosystems and commercial fisheries.’ There are also concerns about the safety of operating fishing vessels around turbine and transmission infrastructure. In a letter with almost 1,700 signatories, fishing community members asked BOEM to include 12 mitigation measures in its record of decision to help protect their industry. These included guarantees of safe vessel transit, proof of long-term biological and environmental monitoring plans and avoidance of sensitive habitat. According to RODA, the government offered no response to their demands beyond acknowledging their receipt. In late July, Reuters reported that the Biden administration was considering offering some form of compensation to commercial fisheries that incur losses as part of the expansion of offshore wind in the Atlantic Ocean. However, talks on this matter are still in their early phases, and the exact mechanism of compensation has yet to be determined, though it’s likely that wind farm developers will set aside funds to pay fisheries for damages. Prior research by the US government has indicated that offshore wind projects could displace some commercial fisheries by as much as a quarter. Strangely, some of the more aggressive action against Vineyard Wind is coming from another renewable energy firm. In late July, Allco Energy, a developer of solar projects, filed a lawsuit in Boston claiming that the DOI had
improperly approved the offshore wind farm. The lawsuit claims that Vineyard Wind’s approval violates the National Environmental Policy Act 18 times. It cites potential harm to the fishing industry, and the belief the turbines could not withstand strong hurricanes, among the risks of installing the wind farm. It has been pointed out that Allco is a potential competitor of Vineyard Wind’s in the renewable electricity market. Allco’s owner, renewable energy entrepreneur Thomas Melone, also filed a lawsuit against Cape Wind’s developers in 2012 on the basis that it would have altered the view from his nearby property. The suit also cited Melone’s concerns that oil and other contaminants from the project could wash ashore at his home. Undeniable potential According to analysis from Environment America Research & Policy Center, an advocacy organisation, offshore wind resources in the US are significant enough to produce more electricity than the country currently consumes. The report, Offshore Wind for America, found that the country has the technical potential to produce more than 7,200 TWh of electricity from offshore wind, which is almost twice the amount of electricity it used in 2019. A separate 2017 study from the National Renewable Energy Research Laboratory estimated that by 2027, the New England region alone could have installed 144 GW of offshore wind capacity – far exceeding the President’s 30 GW by 2030 goal. But this potential can only be translated into renewable energy if regulatory hurdles are cleared, and opponents placated – both things perhaps easier said than done. The permitting process for offshore wind in the US is notoriously complex: developers must first acquire a lease in a BOEM auction, then the bureau must approve the developer’s site assessment plan. Finally, developers must submit a construction and operations plan and BOEM conducts an environmental impact assessment. Only then can construction begin. The offshore wind industry would undoubtedly like to see the permitting process streamlined and other obstacles removed. As the industry matures in the US, resistance to it will likely calm down. Until then, it could be rough seas for the sector – even in light of revived federal government support. l Energy World | September 2021 17
Offshore renewables
SUPPLY CHAINS
The UK is working to bring offshore wind home (SMEs) should play a far bigger part and called for a tangible commitment to supporting them. Whitmarsh has remained close to the action. He chairs the Offshore Wind Growth partnership (OWGP), spawned in 2019 when government struck its sector deal with the industry. Funded by OWIC members, OWGP has a budget of £100mn over 10 years. Part of its remit is to promote collaboration across the supply chain.
For all its success in playing host to offshore wind farms, the UK is lagging behind in supplying the sector. Andrew Mourant looks at efforts to build a truly homegrown offshore wind industry.
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Able Marine Energy Park, on the south bank of the Humber, will receive up to £75mn in government funding Photo: Able Marine Energy Park
ritain is the world leader in building offshore wind farms. They symbolise self-reliance – a source of energy independent of imported gas, oil or coal. But they’ve also provided rich pickings for foreign engineering firms and suppliers – an imbalance, some feel. The need for a greater domestic input has, for some time, been a preoccupation within industry and government. This became evident when, three years ago, the Offshore Wind Industry Council (OWIC) hired former McLaren Racing CEO Martin Whitmarsh to review matters. He concluded that for offshore wind to hit a government target of providing half the UK’s forecast electricity demand by 2050, the domestic supply chain must develop significantly to become competitive. Undoubtedly things have progressed since 2018, when Whitmarsh found only a few UK firms pitching to supply major infrastructure components such as foundations, substations, and export and array cables. He also felt that innovative small businesses
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Transformative projects Since Whitmarsh first set to work, some notably big deals have been struck between developers and the home suppliers. There’s also been plenty of noise, and no little activity, in backing small firms. In May, OWGP announced its latest grant funding and business support in a package totalling £4.2mn. This includes a £3.5mn competition to develop transformative projects. The sort of thing OWGP wants to encourage is exemplified across five winning firms that are among 22 that OWGP has helped with grants. Covering a range of specialisms, they’re intent on further developing distinctive technologies. Sedwell develops bolting solutions for safety and performance critical equipment, while EchoBolt has created an advanced ultrasonic bolt inspection technique for offshore wind turbines. With OWGP money, the latter can develop its in-house cloud data platform for use by customers, enabling them to track asset condition and to self-perform inspections. Other recent winners include Northern-Ireland based CASC, which mobilises/demobilises pre-assembly activities for some of the world’s largest offshore wind farms. OWGP funds will help it invest in equipment to enable full automation of manufacturing processes. Cambridge Vacuum Engineering produces electron beam welding systems. Being a winner with OWGP allows it to focus on developing a process for
circumferential welds on offshore wind monopiles, towers and tubular floating foundations. Finally, LiveLink Aerospace specialises in innovation to help bring about safer air operations and carbon neutral transport offshore. Its competition windfall will be used to determine the feasibility of using onshore air surveillance systems. Expanding the industry Despite this measurable progress, the GMB union is still calling for a broader, more interventionist approach. It wants government to link subsidies for offshore wind farms to the use of UK suppliers. This, it says, could help create 30,000 new steel fabrication jobs in coastal and industrial areas lacking skilled employment. Melanie Onn, Deputy Chief Executive of RenewableUK, says some of what the union is seeking has already happened ‘though I expect not as fast as GMB would like to see.’ To that end, GMB has also called for the creation of a Renewables Development Authority. This would procure private sector capacity to build new yards and work with training bodies to develop whatever skills are needed. Gary Smith, Secretary of GMB Scotland, says government can set legally binding conditions for franchises to supply the market via a UK chain. ‘The EU trade agreement has provisions for development of disadvantaged regions,’ he adds. OWIC has published a guide for companies hoping to become part of the supply chain, and for those already in it. Collaborating for Growth – Playbook contains case studies of relationships between offshore developers and supplier companies – of contract-winning firms, and ways in which offshore developers engage with them early on. Examples of best practice include making suppliers aware of exact requirements on timings and technical specifications. Meetings of offshore developers and suppliers have led to thousands of contracts being awarded to new companies, OWIC
Offshore renewables
Things have progressed since 2018, when only a few UK firms were pitching to supply major infrastructure components such as foundations, substations, and export and array cables
claims. Its guide also highlights developers working with the chain on technology for the next generation of larger projects, including more powerful turbines. OWIC claims the UK’s global lead in offshore wind makes it uniquely placed to sell innovative products and services overseas. Yet there remains a sense that the government is playing catch-up. Onn believes that delays in committing to build ports for offshore wind left the UK supply chain behind its rivals. Only in March did government announce funding for two new ports, one on the Humber, one on Teesside, designed to build the next generation of offshore wind projects. Able Marine Energy Park, on the south bank of the Humber, will receive up to £75mn, while Teesworks Offshore Manufacturing Centre has been allocated £20mn. They’ll have the capacity to house up to seven offshore wind equipment manufacturers, and government claims each will directly create around 3,000 new jobs. With Teesside also receiving free port status, GE Renewable Energy is to build a new blade manufacturing factory there. This is due to start production in 2023, supplying blades to the 3.6 GW Dogger Bank wind farm off the northeast coast. The aim is for a completion date in 2026. Dogger Bank will, it’s claimed, become the world’s largest offshore facility, capable of powering up to 6mn homes. Domestic supply chains In March 2021, Aberdeen-based North Star Renewables fought off foreign competition in landing contracts worth £270mn to deliver three service operation vessels (SOVs) for use at Dogger Bank. This, by any standards, is big business for the home supply chain. North Star will deliver the SOVs from summer 2023. The vessels will be chartered for ten years with an option for three one-year extensions. The firm expects to create 130 full-time jobs in crewing and shore-based roles throughout the contract’s lifetime However, offshore developers still cry out for more guidance when preparing plans to satisfy government officials of a commitment to UK suppliers. They feel the criteria by which projects pass or fail too subjective and lacking in clarity. There are signs of change. Government, when considering Contracts for Difference (CfD) bids,
now allows offshore firms to show earlier in the process how they’re making a material contribution to developing supply chains and receive a decision from the Secretary of State on that basis. ‘There are improved relationships in the corridors of Whitehall, and probably with a broader range of people,’ says Onn. ‘Government wants to see progress it can point to.’ Although government has committed £557mn for future CfD auctions and support for offshore wind, Onn would like to see these held annually. ‘That would give the industry more security, capacity and secure investment at regular intervals, rolling out procurement to give security to the supply chain,’ she says. ‘More projects and people would know where they are.’ Whatever its best intentions, government policy is being caught in post-Brexit crosswinds. Following a commitment to increase the UK lifetime content of offshore wind farms to 60% by 2030 – up from 48% – reports of EU disquiet surfaced in the summer, alleging that this breached the trade deal signed last December. That agreement prohibits any requirement for companies to achieve a given level or percentage of domestic content. With several of the world largest offshore windfarms in UK waters, EU-based companies have hungry eyes on the potential market. However, the Department for Business, Energy and Industrial Strategy (BEIS) has denied setting mandatory requirements for supply chains to use UK products. The picture remains unclear. Scotland looks ahead To some extent, Scotland is ploughing its own furrow. Its national economic development agency, Scottish Enterprise, has appointed energy consultancy Xodus Group to develop the offshore supply chain. It will support Scotland’s existing offshore clusters, DeepWind and Forth & Tay Offshore, with a remit to foster collaboration, drive competitiveness and improve productivity. There’s a focus on helping SMEs through one-to-one support, events, workshops and market intelligence. The idea is for Xodus to connect and simplify the sector, focusing both on supply chain areas already available and on expanding into identified gaps. Meanwhile Vestas, manufacturing turbines and blades for what will be Scotland’s largest
offshore wind farm, has confirmed that 87% of the blades will be UK-produced. Production is underway for the Seagreen project, off the coast of Angus, at the company’s factory and development centre in Newport, Isle of Wight. Of 114 blade sets to be installed by the end of 2022, 99 will be made there. Seagreen lies 27 km off the coast, in the Firth of Forth. It’s a £3bn joint venture between TotalEnergies (51%) and SSE Renewables (49%). The first power is expected to be generated by early 2022, and the farm to enter commercial operation in 2022–23. Vestas’ and SSE Renewables’ collaboration also extends to the 443 MW Viking wind farm being built in Shetland, and the 30 MW Lenalea farm in Co Donegal, Ireland, on which work began in May. Another significant slice of offshore business has been won by Harland & Wolff. It’s been awarded a contract by Saipem Ltd to make eight wind turbine generator jacket foundations for the EDF Renewables and ESB-owned Neart na Gaoithe offshore farm, in the outer Firth of Forth. Work was due to start in July and the project is expected to create almost 300 direct and indirect jobs. Manufacturing will mainly be carried out at Harland and Wolff’s recently-acquired Methil facilities in Scotland, but the firm says there may be scope to spread this across other sites in Belfast, Arnish and Appledore. Belfast has two of the UK’s largest dry docks, while Arnish is said to have Europe’s largest fabrication hall. Harland & Wolff is a wholly-owned subsidiary of InfraStrata. Its CEO, John Wood says Methil’s proximity to the North Sea makes it the ideal location. ‘It validates expanding into regions near major wind farm projects,’ he says. ‘This will enable us to drive down costs and deliver against tight schedules.’ Flourishing The signs look promising on several fronts for firms big and small positioning themselves to grab a stake in supplying offshore wind. Moreover the UK government is desperate to show that home industries are flourishing. ‘It must show that the country can be successful,’ says Onn. ‘Criticism will come its way if it’s not achieving growth and reinstating manufacturing.’ l
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Global carbon policy
CARBON OFFSETS
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f you’re a big emitter of carbon, then you won’t get to carbon net zero without using offsets. This can apply to your own emissions and those produced downstream by customers. Carbon offsets, runs the thinking, are an essential part of the mix along the road to net zero. Or are they? Critics of the burgeoning offset market claim that carbon offsets and the carbon credits they produce can be a shortterm, lower-cost substitute for achieving actual carbon reductions. They allow polluters to carry on polluting, providing they invest in removing or avoiding carbon elsewhere. What’s more, it is claimed, there are numerous projects which don’t deliver additional carbon benefits. Offset investment in already viable renewable energy projects is put forward as a good example of this. ‘Businesses are setting decarbonisation plans on the basis they can use carbon removal capacity which may not actually exist.’ says Jim Elliott of the Green Alliance, a UK-based lobby group. ‘Carbon removal options come with very different costs,’ he says. ‘Highly polluting industries, including oil and gas and aviation, are significant early movers in the voluntary carbon offset market and they are channeling large amounts of money towards nature-based solutions like tree planting.’ Short-term fix An argument levelled against this approach by Elliott and others is that it can be a cheap fix in the short term – carbon credits purchased instead of more expensively engineered carbon removal. Besides, notes Elliott, the benefits of sequestered carbon from, for example tree planting, can take a long time to arrive. Oil and gas majors have been particularly active in the voluntary carbon market. This year, BP Target Neutral, BP’s not-for-profit carbon offsetting business, will support projects in India, China and Mexico. Over the past 10 years the business claims to have helped customers offset over 2.5mn tonnes of carbon. By investing in, for example, a large solar energy project in India, BP Target Neutral is both providing capital funding for the project and making it a more attractive proposition to other investors. This can work well in developing countries where large-scale renewable energy
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Do carbon offsets belong on the road to net zero?
projects can be hard to get off the ground. Rigorous independent verification of a project is deemed essential and BP Target Neutral for one claims this happens with all its offset projects. The aviation sector, for another example, which is under pressure to invest more in cleaner but more expensive jet fuel (the ‘jet zero’ option) uses Verra, a US nonprofit to generate carbon credits in forestry projects The issue is how much additional deforestation do these projects prevent and how much carbon is avoided? Renewable energy, now cheaper than ever, is another contender for carbon offset skepticism. The Indian power company, Adani, for example, has attracted criticism for generating carbon credits for large-scale renewable energy schemes that are already viable and well invested. As Gilles Dufrasne of Carbon Market Watch notes: ‘If you buy carbon credits from a large-scale renewable electricity project you are making zero difference to the environment.’ Removing additional carbon The rule then for offsets – and a rule that BP Target Neutral claims
An essential component on the road to net zero, say some, or a short-term and limited substitute for achieving real carbon reductions, according to others – Nick Cottam takes a careful look at the use of carbon offsets. to take very seriously indeed – is that the carbon credits they generate should remove or replace what would have been additional carbon. If you buy into an existing scheme with surplus credits it shouldn’t count as an offset. Complicated – yes, fiendishly. Open to abuse? Almost certainly. Another oil and gas major Total now TotalEnergies has forged a close relationship with the Adani Group which includes the development of renewable assets across India. Following the deal, the two companies have taken a 50% stake in one of the world’s biggest single location solar projects, a 648 MW behemoth in Kamuthi, Tamil Nadu. To date the project has generated more than 3mn carbon credits, according to data compiled by the Berkeley Carbon Trading Project. The ambition of tycoon
The benefits of sequestered carbon from tree planting can take a long time to arrive Photo: Shutterstock
Global carbon policy
owner Gautam Adani is to build the world’s largest solar power company by 2025. The project, which will deliver power to five states in India, is projected to produce 15.5mn carbon credits over 10 years, linked to emissions savings from 2017 onwards. Carney – we need new carbon offset markets In the UK, notes Jim Elliott, the Green Alliance would like to see a public body mandated by government to oversee not just the offset market but also the overall role of carbon removal in reaching net zero. The Office for Budget Responsibility has estimated that the total cost of reaching net zero by 2050 could reach £1.4tn, although this could be offset by savings achieved through greater energy efficiencies. As the UK government comes under growing pressure to turn bold ambition into practical delivery, the Green Alliance warns against abuse as industry and the financial sector seek to scale-up the voluntary carbon market to demonstrate action and progress. Meanwhile, Jim Elliott has warned that a ‘trader’s charter’ could turn offset trading into a license to pollute, the UN’s Special Envoy for climate action and finance Mark Carney has called for the creation of new carbon offset markets which he says: ‘will help to conserve our carbon budget and protect nature.’ When it works well, carbon offsetting appears as a useful, arguably essential part of the net zero mix. In developed countries offsets can provide a lower carbon stepping stone for energy intense emitters while in developing countries the purchase of carbon credits can provide some of the poorest people in the world with access to clean energy. The problem, says Edwin Aalders of the consultancy DNV, is that offsets are not always measured with the same standards. ‘All programmes have their own way of comparing additionality,’ says Aalders who was involved in setting up the VCS Program for accrediting carbon offset projects in 2009. ‘This means you are not always comparing apples with apples or even apples with pears.’ VCS, the world’s most widely used voluntary programme, has certified around 1,700 projects responsible for reducing or removing more than 630mn tonnes of carbon and other greenhouse gas emissions from the atmosphere. Used mainly in
developing countries, the scheme is designed to ensure that the emissions reductions generated by these projects are actually occurring. It is about credibility in what has become a crowded market. Carbon offsets or actual carbon reduction? As Jim Elliott points out, there is only so much land and energy for doing the job. In the UK, he says: ‘We currently have no mechanism for deciding which businesses and sectors should be allowed to continue to emit and offset with carbon removals, and which need to reduce their emissions to zero.’ As for all those net zero targets which are continuing to multiply across sectors and countries, the clue is in the term itself. Oil majors and other big emitters of carbon are still likely to be causing emissions well into the second half of this century. But if at least part of the business is zero carbon – via renewable energy investments, engineered solutions and indeed offsets – then reaching the net zero target is at least possible. Net zero targets as agreed at COP26 and elsewhere involve a global shuffling of the energy pack – reduce, remove, replace and offset, depending where you are at base camp. Delivery, as the UK government would now admit, is everything, which is why big emitters, including oil and gas and aviation, have been significant early movers in the voluntary carbon offset market. The cost of transition, even for an oil major, is significant, and as costs continue to rise, including in the offset market, it has become important to get the best bang for your bucks. Historically, offset-approved projects covering everything from solar energy to tree planting and forestry protection have been orders of magnitude cheaper than the expected cost of engineered carbon removals. What is happening, claims Jim Elliott is: ‘early movers are locking up the cheapest forms of carbon removal for decades into the future, making it much harder and more expensive for arguably more essential and poorer sectors, such as agriculture, to reach net zero. As the pandemic has shown, we can survive without flying but we can’t live without food.’ Developing countries need offset investment The counter argument is that smaller, more needy projects, often in developing countries, need
Oil majors and other big emitters of carbon are still likely to be causing emissions well into the second half of this century
offset investment. They also need the likes of BP Target Neutral to generate confidence in the project and the developing world needs rich countries and rich companies to show that carbon neutral energy and the preservation of carbon absorbing nature is both possible and viable as a catalyst for economic growth. Although the value of the voluntary carbon market is still a fraction of the compliance carbon markets, the Taskforce on Scaling Voluntary Carbon Markets (TSVCM) estimates that demand for carbon credits could increase by a factor of 15 or more by 2030, when the market could be worth up to $50bn. BP, it seems, wants more of the action, and has already invested in Finite Carbon, the biggest US producer of carbon offset credits, which helps landowners sell their forests as carbon sinks. In 2018, BP Target Neutral purchased around 850,000 tonnes of carbon credits which it claims are helping to improve the living standards of some of the world’s poorest people as well as helping to reduce and remove customer emissions. Each credit purchased is a tradable certificate that represents one tonne of carbon dioxide equivalent either removed or prevented from entering the atmosphere. Jim Elliott is unequivocal in his opposition to over relying on an offset market, which he says is currently slowing progress in reducing actual emissions. In the UK he says: ‘We are currently at a crucial stage where all the effort must go now into making sure the country can meet its legally binding target of reaching net zero. A body along the lines of an Office for Carbon Removal is needed to make sure carbon removals are credible and contribute positively to meeting net zero in a sustainable way.’ A natural brake on the offset market, adds Edwin Aalders, is that more companies in energy and other sectors are focusing on Scope 3 emissions [indirect emissions that occur in a company’s value chain up and down the supply chain]. ‘Downstream activities that used to be seen as offsets have become Scope 3 obligations by corporations,’ he says. ‘It’s far more focused on pushing your commitments into your supply chain and helping your supply chain achieve them.’ l
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