Carbon Feasibility Study

Cultivation | CO₂ Sequestration | Carbon Credit | Opportunity | Feasibility

Practical carbon feasibility study tailored to an agarwood (Aquilaria) agroforestry + green extraction operation in the Philippines.

Carbon Feasibility Study (Agarwood + Green Extraction)

Project type: Mixed-species agarwood agroforestry (ARR) with sustainable processing (green extraction facility).
Goal: Generate high-integrity carbon removal credits and co-benefits (biodiversity, water, livelihoods), while decarbonizing the processing plant.

1) Strategic fit & eligibility

  • Best-fit crediting pathway: Afforestation/Reforestation/Revegetation (ARR) for mixed agroforestry with Aquilaria on non-forest/understocked land using Verra VM0047 v1.1 (latest update May 14, 2025) or Gold Standard AR 403 (v2.1). Both support new tree cover and agroforestry; VM0047 is widely used and recently revised for clarity. (Verra, Gold Standard for the Global Goals)
  • Market context: In 2024–2025 the VCM shifted toward higher-integrity removal credits; removal prices averaged ~3.8× higher than reduction credits, with ARR and agroforestry among the winners (supply still tight). Retirements stayed ~182 Mt in 2024, signaling steady end-user demand. 
  • Policy & local signals (PH): DENR has publicly encouraged private-sector tree planting for carbon credits and launched Sustainable Forest Land Management Agreement (SFLMA) to streamline tenure and scaling—good tailwinds for permitting/tenure. (DENR)
  • Future buyers: Potential for CORSIA (2024–2026 phase) if credits/program meet eligibility and host-country authorization rules under Paris Article 6. Verra VCS is recognized under CORSIA; eligibility depends on project/type/vintage & other conditions. (Verra, ICAO)

2) Project description (assumptions)

  • Land area (illustrative): 500 ha across multiple sites (marginal/understocked agricultural land, not current forest).
  • System: Multi-strata agroforestry: Aquilaria + native shade species (e.g., Swietenia macrophylla, Gmelina arborea where appropriate), contour hedgerows, and ground covers; no peat, no HCV/HCS conversion.
  • Green extraction plant: Closed-loop hydrodistillation with heat-recovery; biochar from spent biomass; rooftop PV + efficient boiler; condensate reuse.

These are placeholders—you can swap in your actual hectares, species mix, and facility specs; the numbers below scale linearly.

3) Carbon accounting scope

Creditable (primary):

  • ARR removals (biomass + soil) under VM0047 or GS-AR 403.

Potentially creditable (secondary, optional later):

  • Renewable heat/energy efficiency at the extraction plant (separate energy-efficiency methodologies) – smaller volume; keep for internal GHG and potential in-setting.

Non-credit revenue/co-benefits: hydrosol reuse, biochar for soil, reduced fuel use.

4) Baseline & additionality (screening)

  • Baseline land use: Non-forest/understocked parcels; no legal/financial drivers to reforest—meets additionality if tenure & land-use plans confirm “no-project” scenario.
  • Leakage risk: Low–moderate (agroforestry on ag land). Manage via community engagement and yield-replacement design (intercrops).
  • Permanence: Use standard buffer pool (final % set by registry risk tool); conservative planning uses ~15–20%withholding (finalized during validation).

5) Expected removals (order-of-magnitude)

Empirical literature for tropical agroforestry / planted forests indicates ~4.5–16 tCO₂e/ha/yr in the first 20 years, with multistrata agroforestry often near the lower-mid of that band; planted woodlots can be higher. Philippine studies on similar species show ~5–7 Mg C/ha/yr (≈ 18–26 tCO₂e/ha/yr) in some contexts, but we’ll stay conservative. (BioMed Central, Project Drawdown®, CIFOR-ICRAF, ScienceDirect)

Planning cases (years 5–20 average, net after measurement uncertainties but pre-buffer):

  • Low: 6 tCO₂e/ha/yr
  • Base: 10 tCO₂e/ha/yr
  • High: 14 tCO₂e/ha/yr

Illustrative volume for 500 ha:

  • Low: 3,000 tCO₂e/yr
  • Base: 5,000 tCO₂e/yr
  • High: 7,000 tCO₂e/yr

Apply permanence buffer (e.g., 15%) → 2,550 / 4,250 / 5,950 tCO₂e/yr issued, respectively. (Final buffer set during validation.)

These are screening figures only. VM0047/GS require plot-level growth, wood density, allometry, and soil-C to fix real baselines and uncertainty. (Verra, Gold Standard for the Global Goals)

6) Revenue outlook (today’s market)

  • The market is rewarding removals (ARR/agroforestry) with a significant price premium versus reductions; buyer demand focuses on recent vintages and higher-integrity labels. 
  • Scenario pricing (conservative screen, USD/tCO₂e ex-fees):
    • Low: $6
    • Base: $12
    • High: $20
      (Actuals vary by rating, co-benefits, registry, buyer, CCP/Article 6 status, and vintage premium.) (Sylvera)

Illustrative gross annual carbon revenue (500 ha, after 15% buffer):

  • Low volume/low price: 2,550 × $6 ≈ $15.3k/yr
  • Base volume/base price: 4,250 × $12 ≈ $51k/yr
  • High volume/high price: 5,950 × $20 ≈ $119k/yr

Carbon should be one revenue stream, not the only one—agarwood products remain primary. Market dynamics are in flux but trending to premium for high-integrity removals. 

7) Cost & timeline (screen)

Up-front (YR0–1): feasibility, land eligibility, FPIC/community MOUs, sampling design, baseline, PD preparation, validation.
Monitoring (every 2–5 yrs): plot re-measurements, soil sampling (as applicable), issuance fees, verifier costs.
Indicative cost drivers: auditor/registry fees, field inventory, GIS/remote sensing, safeguards, Article 6 authorizations (if pursued).

Capital for the green extraction plant improves ESG and may reduce Scope 1/2 emissions (good for branded claims), but credit volume will primarily come from ARR removals.

8) MRV (measurement, reporting, verification) plan

  • Stratified inventory: permanent sample plots by stratum (species mix, age, site class); measure DBH/height; apply species-specific or regionally accepted allometric equations; uncertainty analysis per methodology.
  • Remote sensing: annual canopy cover/change checks; leakage belt monitoring.
  • Soil carbon (optional but valuable under VM0047/GS): baseline cores (0–30 cm) with QA/QC; repeat sampling per cycle.
  • Safeguards & SDGs: jobs, income, gender participation, water/soil protection.

9) Tenure, safeguards, and permitting

  • Tenure/consent: Secure land titles/tenure agreements; FPIC where applicable.
  • Philippine track: Engage DENR on land classification, SFLMA opportunities, and alignment with tree-planting incentives for carbon. (DENR)
  • Article 6 (optional): Coordinate with the Climate Change Commission/DENR for corresponding adjustments if you target CORSIA/6.2 buyers. (ICAO)

10) Risk analysis (headline)

  • Natural risks: typhoon, fire, pests → mitigated via species diversity, fire breaks, insurance/buffer pool. (CORSIA-related insurance criteria emerging for eligible credits.) (Verra)
  • Market risks: price volatility; buyer preference for recent vintages and CCP-aligned credits. 
  • Regulatory risks: evolving PH carbon-rights framework (e.g., draft Carbon Rights Act); manage through strong contracts & legal review. (Congress Docs)

11) Go/No-Go screen (for 500 ha case)

Go if you can confirm:

  1. Eligible land (non-forest baseline) and secure tenure across ≥300–500 ha;
  2. Community buy-in & livelihoods plan;
  3. Modest ARR removal rates (≥8–10 tCO₂e/ha/yr years 5–20) are realistic for your sites; and
  4. You can fund validation + MRV through first issuance.

No-Go / Defer if: land eligibility is weak, tenure unclear, or if expected removals fall <5 tCO₂e/ha/yr (transaction costs may dominate).

12) Exact data we still need (to lock a bankable model)

  1. Maps & polygons (GIS/KML) + legal status for each parcel.
  2. Historical land use (prove non-forest baseline).
  3. Silviculture plan: spacing, species, rotation, survival assumptions.
  4. Field data: any existing DBH/height, survival, growth trials; soils.
  5. Community agreements/FPIC and benefit-sharing design.
  6. Processing plant energy/fuel baseline (for internal GHG + potential in-setting).

13) Development roadmap

Phase 0 (0–2 months): Desktop eligibility screen, stakeholder mapping, draft PD outline, sampling plan.
Phase 1 (2–6 months): Baseline inventory + soils, finalize PD for VM0047 v1.1 (or GS-AR 403), validator selection. (Verra, Gold Standard for the Global Goals)
Phase 2 (6–12 months): Validation & first planting blocks registered; monitoring plan operational.
Phase 3 (Years 2–3): First issuance window (depends on methodology frequency, growth, and verifier schedule).
Ongoing: Monitoring, issuance, sales; explore Article 6/CORSIA alignment if strategic. (Verra, ICAO)

14) Sales strategy (fast take)

  • Aim for removal-focused buyers (net-zero firms, aviation/CORSIA-adjacent), emphasize agroforestry + community co-benefits and recent vintage advantage. Market evidence shows strong premiums for removals and recent vintages. 
  • Consider pre-purchase / forward offtake post-validation to de-risk cash flow.

Bottom line

  • Technically feasible and strategically aligned with 2025 market trends that favor ARR removals and recent vintages.
  • On 500 ha, expect ~2,500–6,000 tCO₂e/yr issued (after buffer), with ~$15k–$120k/yr gross at conservative price bands—additive to your agarwood core business.
  • Priority next steps are land eligibility, tenure, sampling, and choosing VM0047 v1.1 vs. GS-AR 403.
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