Alaska awards feasibility contract for state-led carbon-offset projects; DNR expects first credits in 18–24 months

The Alaska Department of Natural Resources has contracted Terra Verde to perform feasibility work for state-led carbon-offset projects and told the House Resources Committee on Feb. 3 the process to register and generate tradable forestry credits will take roughly 18–24 months from feasibility work to first credits.

“For the record, Trevor Fulton. I’m the carbon offset program manager,” Fulton told the committee as he described the program created by SB 48. Fulton summarized that the state’s carbon-offset program will create nature-based projects on state lands that can generate voluntary carbon offset credits for sale to entities seeking to reduce their net emissions.

Why it matters: SB 48 authorizes the state to develop projects that increase or conserve carbon stocks on state-managed lands and to sell the resulting credits on voluntary markets. The committee was told the statute caps developer commission at 30 percent, requires 20 percent of project revenue to go to the Renewable Energy Grant Fund, and directs the remaining 80 percent to the general fund.

Program mechanics and scope

- State-only projects: Fulton said projects under the program will be developed on state lands only and be an additional use under DNR’s multiple-use mandate. The program focuses initially on improved forest management (IFM) projects but the statute and DNR planning allow other nature-based approaches such as biochar, blue-carbon (coastal/marine) projects, ocean/river deacidification and enhanced rock weathering.

- Third-party validation and credits: Fulton explained that independent carbon registries verify the carbon benefit and issue credits measured in metric tons of CO2-equivalent. He said registries typically set aside a buffer (15–20 percent of credits) to insure against catastrophic losses such as wildfire.

- Timeline and public review: DNR issued an RFP and in November 2024 contracted Terra Verde to study feasibility at Tanana Valley State Forest and sites in Mat-Su, Kenai and Haines. Fulton described the timeline as an 18–24 month process from feasibility to credit generation, with public comment points including the state’s best-interest finding and subsequent registry public comment periods.

- Revenue and uses: Under SB 48 the program directs 20 percent of project proceeds to the Renewable Energy Grant Fund, with the remaining 80 percent to the state general fund. Fulton described the program as voluntary: credits are tools for private and public entities to offset emissions they choose to offset, not a state-imposed tax.

Representative questions and issues raised

Committee members asked about wildfire risk and whether DNR would prioritize protecting enrolled lands. Fulton said registries require buffer pools and insurance-like practices; he also said management decisions about firefighting priorities relative to enrolled lands are an ongoing policy discussion.

Members asked whether other landowners (federal forests, Native corporations, the Mental Health Trust) could participate. Fulton said the program is limited to state-managed lands under DNR authority but noted other landowners, including Native corporations, already run offset projects on their own lands.

Potential project types and opportunities

- Improved forest management (IFM) is the near-term focus; DNR and Terra Verde are studying local timber conditions and potential management changes to increase or maintain carbon stocks.

- Biochar and wildfire-reduction projects and ‘‘blue carbon’’ (marine) opportunities were discussed; Fulton said methodologies exist for some approaches but others remain under development and would require careful assessment of net carbon benefits and costs.

- Enhanced rock weathering, ocean deacidification and other novel approaches were noted as potential areas of research; Fulton cautioned those approaches must be evaluated for net energy balance and economic feasibility.

Ending

Fulton told the committee the program web page (dnr.alaska.gov/carbon) hosts current materials and that the state plans regular updates. He said feasibility work with Terra Verde is underway and the state will hold public comment on any projects that proceed to the best-interest finding and registry stages. No committee votes were taken during the briefing.