Woodcache PBC

You Should Care About Carbon Margins


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This entry is part 6 of 6 in the series Do Wood Vaults Really Work?
This entry is part 6 of 6 in the series Is Forest Fuel Reduction a Sustainable Source of Biomass?

This is part of a series in which I badger the CDR industry into taking Woody Biomass Storage (WBS) more seriously.  Today I describe why you should consider the importance of “Carbon Margins.”  

In business a “Profit Margin” is a way of identifying how profitable a business is.  For example, you would say the net income margin is 50% if your top line (aka “revenue” or “turnover”) is $2, and your income (subtracting expenses) is $1.  ($1 net income / $2 revenue = 50%).  You might also consider the absolute net income number of $1, but that $1 of net income lacks important context, like how much effort and resource went into the production of the net income.

“Risky” businesses require a higher profit margin because in adverse conditions, the business can remain profitable.  Less risky businesses can get by on lower profit margins because they are more stable.  So for example, a grocery store can often get by on low profit margins because it is less risky, but a fancy restaurant floating in and out of favor might require higher profit margins.

Here’s the thing:  The exact same margin principle should apply to the emission of CO2 equivalents.  Specifically, how much scope 1/2/3 emission does it take to produce a carbon credit?  Currently the industry considers “Net Carbon Removed” as the equivalent of net income, but it does not seriously consider “Carbon Margin.”  Today, carbon removed is considered through an additive lens (total carbon removed – carbon cost), but for risk to be fully considered it must become multiplicative (carbon cost / total carbon removed).  

All CDR is risky right now, let’s admit it.  The biggest risk is the next generation will overturn our current thinking, given their increased data availability, more precise science, and experience.  High carbon margin pathways can withstand inevitable reversals that will emerge.  Low carbon margin pathways cannot.

Some well-accepted pathways have negative (bad) carbon margins right now.  For example, When considering production emissions, the potential carbon cost of supplied electricity alone puts the carbon removed in the negative.  The only thing making it carbon positive is the assumption that the energy is green, and therefore non-emitting. Someday, when there are healthier electricity grids, society will ask, wouldn’t it be better to simply consume the clean electricity than to use it to remove a smaller amount of carbon from the air?

So back to Woody Biomass Storage (WBS).  WBS is not manufactured, requires limited equipment, requires very little transportation of feedstock.  The yield, or carbon margin, on WBS is easily above 85%.  No durable methodology has a higher carbon margin.  By contrast, most other methodologies have carbon margins well below 50%

Risks related to CDR purchases are universal, and you want to invest in pathways that can withstand adverse carbon margin movements.  You should consider pathways with healthy carbon margins to help you withstand these inevitable reversals. I offer Woody Biomass Storage for your consideration.

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