Department of Natural Resources Office of Project Management & Permitting

Carbon Offset Program Manager: Trevor Fulton, trevor.fulton@alaska.gov | (907) 269-8755

In 2023, legislation was enacted allowing the State to use its lands and natural resources for carbon management projects. The legislation authorized two programs within the Department of Natural Resources (DNR): the Carbon Offset Program and Carbon Management Leasing.

The Carbon Offset Program enables the State to implement carbon offset projects on State land. Authorized under AS 38.95.400 - AS 38.95.499 and managed by the DNR Office of Project Management & Permitting, these State-led projects generate revenue through carbon offset credits while providing other environmental, social, and economic co-benefits and helping meet free-market demand for decarbonization.

The Carbon Management Leasing program allows DNR to lease State land to private parties for a carbon management purpose (i.e. a carbon offset project or other project that mitigates greenhouse gases). Carbon management leases are authorized under AS 38.05.081 and administered by the DNR Division of Mining, Land & Water.

This webpage explains carbon offset concepts and processes for projects under the Carbon Offset Program. For information on carbon management leasing, please contact the DNR Division of Mining Land & Water at nro.lands@alaska.gov or (907) 451-2740. For information about leasing State land for carbon capture, utilization, and storage (CCUS) projects, please contact the DNR Division of Oil & Gas at ccus.dog@alaska.gov or (907) 269-8800.

Carbon Offset Credits

Carbon offsets are tradable credits used to counterbalance—or offset—greenhouse gas emissions. A carbon offset credit represents one metric ton of carbon dioxide equivalent (tCO2e) removed from or not released into the atmosphere due to a carbon offset project activity.

An independent carbon crediting program (or carbon registry) verifies reductions to ensure they are real, permanent, and additional (i.e. above a “business-as-usual” baseline scenario that represents emissions levels absent the project) and issues credits based on the amount of greenhouse gas emissions reduced or removed. Organizations can purchase and use carbon offset credits to meet emissions reduction or net-zero targets (to be “carbon neutral by 2030,” for example).

Carbon offsets can be generated from a range of project activities, including forest management, reforestation, marine ecosystem restoration, aquatic plant farming, reduced wildland fire severity, and converting biomass into biochar. The over 100 million acres of land managed by DNR hold significant potential for generating carbon offset credits, especially from forest-based projects.

Carbon Offset Project Process

The process for developing State-undertaken carbon offset projects under the Carbon Offset Program is designed to produce transparent, thoroughly vetted, high-integrity projects that involve a robust public process; generate State revenue while providing environmental, social, and economic co-benefits; and achieve real and measurable greenhouse gas reductions. These steps include:

1. Identification
Projects are identified by the Department or recommendations are made by another party, like a project developer, a member of the public, or an NGO.

2. Call for Proposals
If the Department seeks to engage with a project development partner for services like data collection, registration, third-party verification, or marketing, it must issue a call for proposals and select a contractor based on experience, qualifications, and other factors.

3. Evaluation
After identifying a potential project in Step 1 above, the Department will determine whether to proceed with the project by considering the economic effects, revenue potential, compatibility with other land uses, and other factors. This evaluation must be completed before the Department makes a formal best interest finding for the project under Step 5.

4. Land Reclassification/Management Plan Revision (as needed)
Projects must be compatible with land use classifications and management plans. If necessary, reclassification or plan amendments must be finalized before the Department completes a best interest finding under Step 5.

5. Best Interest Finding
The Department must make a written finding that the project serves the State’s best interests before listing the project with a carbon registry. This best interest finding (BIF) is based on information, material facts, and issues identified in the evaulation process and during public review and comment.

6. Project Registration
After a best interest finding is completed, the project is registered with an independent carbon crediting program to ensure emissions reductions or removals are real, measurable, and permanent. The registry issues and tracks the use of credits to prevent double counting or other fraudulent activities.

The project registration process can take 18-24 months for initial credit issuance and includes:

• Validation and verification of emissions reductions or removals by an independent third party;
• Project review by the registry;
• Project registration and initial carbon offset credit issuance;
• Periodic issuance of additional carbon offset credits following monitoring, reporting, and verification;
• Credit retirement (permanent removal of credits from the market once the credit owner or purchaser has applied their benefit); and
• Ongoing project maintenance, monitoring, and reporting.

7. Marketing and Sales
At any point during the project development process, the Department may market a carbon offset credit portfolio to prospective buyers.

Credits are marketed and sold through an exchange or broker or directly to purchasers. Marketing and sales can occur either before (by agreement to deliver a fixed number of credits to a buyer at a certain time and price) or after credits have been issued. The department may sell credits through an exchange, a broker, or directly to purchasers (i.e "over the counter"). Purchasers can offset their emissions by retiring credits or resale credits on a secondary market.

Additional Information

Additional information about the Carbon Offset Program can be found by contacting

Carbon Offset Program
DNR Office of Project Management & Permitting
550 West 7th Avenue, Suite 1430
Anchorage, AK 99501
Phone: (907) 269-8690
dnr.carbonoffsets@alaska.gov

Additional information about Carbon Management Leasing can be found by contacting

DNR Division of Mining, Land & Water
550 West 7th Avenue, Suite 1070
Anchorage, AK 99501
Phone: (907) 451-2740
nro.lands@alaska.gov

Resources

• Senate Bill 48: Carbon Offset Program (2023)
• Regulations: 11 AAC 78 Carbon Offset Projects on State Lands
• Request for Proposals for a Carbon Project Developer (closed Sept 9)
• DNR Fact Sheet: Carbon Offset Program (forthcoming)