LEXINGTON, KY - 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.

Based on these occurrences and the lack of movement towards adoption of a carbon market or a carbon tax the significance of the project changed and the outputs and delivery of  information from the project was appropriately modified. Hardwood sawmills can use an Excel tool developed for the study to estimate probable gross and net revenues from the sawmill's potential participation in future carbon markets.

View the final report on hardwood products carbon sequestration here. The project also helped develop the Center for Forest and Wood Certification. For further details, contact Jeff Stringer at 859-257-5994.

The U.S. Forest Service Wood Education and Resource Center, located in Princeton, WV, and administered by the agency's Northeastern Area State and Private Forestry organization. The Center's mission is to work with the forest products industry toward sustainable forest products production for the eastern hardwood forest region. The Center provides state-of-the-art training, technology transfer, networking opportunities, applied research, and information.