EcoPlanet Bamboo yesterday announced that its Nicaragua bamboo projects successfully verified their first carbon offsets. These projects are expected to reduce 1.5 million tonnes of carbon dioxide (CO2e) over their 20-year lifetime. This milestone came after a patient process of navigating the voluntary carbon markets and – as Troy Wiseman explains in the interview below – is part of the company’s truly long-term vision for triple bottom line profitability.
Can bamboo succeed where carbon markets have failed? Read Troy Wiseman's opinion piece, originally published at the 2014 G7 Climate Change Summit, here.
28 May 2014 | Troy Wiseman, CEO and Co-Founder of EcoPlanet Bamboo, never understood the idea of a zero-sum game when it came to corporate responsibility and profits. To him, achieving both simultaneously is all about the execution – and having the patience to do things right the first time around.
That patience paid off last week when EcoPlanet Bamboo, a company that aims to “make bamboo the timber of the 21st century” completed verification of its 2014 vintage offsets under the Verified Carbon Standard (VCS) and Climate, Community and Biodiversity (CCB) Alliance Standard. The verification marks the debut of carbon offsets from bamboo plantations. In 2012, EcoPlanet Bamboo also became the first carbon offset project to receive political risk insurance (to the tune of $27 million) from the World Bank Group’s Multilateral Investment Guarantee Agency.
When he founded EcoPlanet Bamboo, Wiseman recognized that the only way to ‘move the needle’ on deforestation is to find alternatives to wood fiber. The company is working with major corporations that source paper, activated carbon (used to trap mercury emissions from coal-fired power plants and mines) and other wood products from boreal and other endangered forests to see if they can fill those same product needs with bamboo, at the same price point.
Based in Barrington, Illinois, the company owns seven bamboo plantations covering more than 8,000 acres in Nicaragua and 1,200 acres in South Africa. EcoPlanet Bamboo does extensive research and development on dozens of the more than 1400 types of bamboo, so they know which varieties fit which business need – from biofuels to pulp to furniture.
Wiseman, a lifelong entrepreneur, spoke with Allie Goldstein about the company’s long-term business vision, and how carbon offset sales fit in.
Allie Goldstein: Many of your bamboo plantations are validated as VCS, CCB and Forest Stewardships Council (FSC). Why did you make this effort to validate against multiple standards?
Troy Wiseman: The reason we went thought this intense triple certification process and spent the money to do this right, all the way from the community level to the top of our organization, was to set the benchmark for how bamboo should be industrialized. That is as a sustainable alternative fiber with high potential for reforestation, rather than as a species that otherwise has the potential to become another problem crop.
In addition to the carbon finance, the multiple certifications allowed that to be validated externally. EcoPlanet Bamboo only plants on degraded land that was deforested more than 10 years ago, in line with the VCS requirements, and we don’t compete with food security. If you’re using land like ours that doesn’t have good soils – either acidic, clay or very compacted – it’s going to cost an additional hundreds of thousands of dollars each year per plantation, because it’s going to take one or two years longer for that bamboo to mature. That’s real money. But we know that that’s the right way to do it, and because we’re building a company for 100 years – the long term – we’re trying to be a responsible market leader and set the benchmark.
AG: Are you finding that these front-loaded expenses pay off in the long run?
TW: Of course the carbon certification pays for itself as soon as the bamboo has accumulated enough biomass for those credits to be realized. However, you have to be willing to risk a couple hundred thousand dollars and invest a ton of time to get through a very complicated process, with no guarantee you will receive any carbon credits.
However, we also believe that the additional certifications more than pay off in the long run. When you get the certifications like FSC or CCB and your people are…getting paid 20-30% more than minimum wage and they’re getting treated like a real person with value. Then you don’t have the turnover that plantations usually have. [The] palm oil [industry] is turning over people every few months. The turnover that you don’t have saves you a lot of money in the end. Happier people, working in employment scenarios that are clearly benefiting the environment that they themselves grew up in, results in far fewer lawsuits and fewer strikes, as well as getting a positive response from the NGO community.
AG: How do carbon offsets fit into your business model?
TW: The carbon offsets play a critical role in our business model of growing bamboo plantations on degraded land. Once the plants reach maturity they grow very fast, but in the early years of the plants’ development they are capitally intensive. We were able to take on more expensive debt, which allowed us to work in places that most people don’t necessarily want to, and focus on degraded land, due to the expectation that some of that debt would be paid off through the realization of the carbon asset in the years before harvesting begins.
AG: Being new to the carbon market, how did you find it? Was it fairly easy to navigate, or not?
TW: Extremely difficult. Because EcoPlanet Bamboo was the first commercial-scale bamboo plantation company to ever receive VCS certification and carbon credits for bamboo. The extra scrutiny on top of an already complicated and unfriendly process was almost impossible. Anytime you pioneer anything, especially when it is done under a microscope of critics and naysayers, the pressure and amount of extra work gets overwhelming at times.
AG: How long did the process take?
TW: About 22 months to get through both the VCS validation process and our first verification audit, which allowed us to start selling our carbon credits.
AG: So, what stage are you at now with the carbon accounting?
TW: Our projects in Nicaragua were the first forestry grouped projects to get verified under the VCS. We now have a total validation of just over 1.5 million tonnes CO2e. Our first verification event was completed last week, and those credits are now registered on Markit. We will start the VCS process for our plantations in Africa soon.
AG: Are you actively trying to find a buyer for those offsets?
TW: Yes. I didn’t know how this worked before, so at first we tried to pre-sell before they were verified. That wasn’t successful, so we held off, but now that they’re fully verified we have interest from multiple companies. We are currently negotiating an offer for this year’s vintage as we speak.