GHG Emissions Reduction: Monetization through the Pyrolysis- Biochar Bioenergy Pathway 2010 U.S. Biochar Initiative June 2010 Jeffrey Frost Executive Director AgRefresh 25x’25 Carbon Advisor

AgRefresh (AP-GARM SC, LLC) Founded in Burlington, Vermont in 2003 We are: – Environmental Accountants – Focused on Farm and Forestry Sourced Feedstocks Our Work: – Macro Scale: Farm Bill Regulatory Impact Analyses for environmental, economic, and energy impacts of energy titles; state government strategic reviews; Carbon Advisor to 25x’25 Alliance; farm sectors consulting; – Project Scale: Farm Anaerobic Digestion; Bioenergy Feedstocks – Value-Chain Life Cycle Analysis: Bioenergy (feedstock producers and biorefineries), food value chain accounting, etc). 2

Topics of Interest Monetization: What’s It Take? Collaborative Support Processes A Pyrolysis-Biochar Bioenergy Pathway Carbon Monetization Opportunities Monetization Challenges 3

Carbon Markets and Monetization: What’s It Take to Get the Dough? Here is What We Need: – Principles – Programs – Protocols – Procedures – Robust Compliance Markets Where Do We Stand Today With Bioenergy, With Biochar? 4

Carbon Markets Monetization: Where We Stand with Biochar Principles – ISO, PAS, WRI Programs – Compliance Rules and Regulations – Regional Cap and Trade and Offsets... but no biochar – Biofuels Value-Chain Markets: RFS2; CA LCFS Protocols – Bioenergy, agricultural practices, but not biochar Procedures (Practices, Methodologies) Robust Compliance Markets – In their infancy: 2011 CA LCFS; 2010 RFS2; 5

Collaborative Support Processes Pyrolysis-Biochar Bioenergy Carbon Accounting – Just one aspect of the overall pyrolysis-biochar birthing process. – Science, technology, infrastructure, business feasibility... Collaborations in Bioenergy Carbon Accounting – T-AGG, C-AGG, M-AGG initiatives – EDF – Meridien Bioenergy Accounting Work Group – WRI – Time Value Accounting – 25x’25 Carbon Work Group – Land Use Change Articles and Debates and Models – Biochar Protocol Initiatives – Plenary Presentation – International Initiatives (RSB) – Government Initiatives (USDA, Intergovernmental) – Private Certifications for Value-Added product pricing (FSC) 6

Bioenergy Feedstocks: Intersection of Carbon Offset Project Accounting and LCA Bioenergy Credit Accounting Example Bioenergy Feedstock Production – assume the pyrolysis-biochar bioenergy pathway – example here: Purpose-Grown SRWC (Poplar) Pathway: – pyrolysis of Poplar harvest residues and milling wastes; – biochar as agroforestry soil supplement and for soil sequestration; – pyrolysis fuel products for process fuel and liquid biofuel; Carbon Market Opportunities: – intersection of offset markets and bioenergy value chain markets – two very different and overlapping forms of carbon monetization 7

Bioenergy Feedstock Production: Intersection of Carbon Offset Project Accounting and LCA Bioenergy Credit Accounting Focus: Poplar Agroforestry Pyrolysis-Biochar Bioenergy Pathway project-based carbon offset opportunities – biochar soil carbon sequestration; – post-biochar application N 2 O and CH 4 reductions – soil amendment displacement (N; N 2 O) – avoided feedstock decay emissions – forest carbon sequestration – fuel displacement credits bioenergy LCA pathway credits (CA LCFS; RFS2 RINs) project reductions also lower the final fuel pathway carbon intensity and can generate larger credits under the CA LCFS. is the intersection an opportunity? is it double counting? is it a likely outcome? 8

Carbon Market Monetization Potentials – the Bottom Line Limited potential today. Significant future potential. Monetization requires principles, programs, protocols, practices, and markets – we have long way to go for bioenergy accounting in general, – we have a longer way still to go for pyrolysis-biochar opportunities pyrolysis-biochar bioenergy pathways can benefit from carbon markets today & more in the FUTURE – via project-based offset credits, AND – via full value-chain, life cycle bioenergy carbon accounting 9

Thank you. Questions? Jeffrey C. Frost Executive Director