Forest Certification - What does it mean for you?

1. Forest Certification - What does it mean for you?

2. Certified Sustainable Forest Management Systems • The first step towards certified sustainable forest products • Must conform to established principles and practices in forest management • Third party certification and audit • Intended to provide confirmation of sustainable, legal management of the forest and of the products coming from it.

3. Third Party Certification • Goes beyond “I’m OK”, “We’re OK” to “They’re OK” – an independent audit procedure. • Underwriters Laboratories – the UL seal • USDA food safety certification - USDA grade A • American National Standards Institute – ANSI ISO certifications. • Standards are set and products/operations audited to assure compliance.

4. Two Major Sectors: Forest Certification and Chain-of-Custody Certification • Forest certification deals with forest management systems, impacts on communities and people, and the primary forest products produced – land ownership based. • Chain-of-custody certification tracks certified forest products from the forest, through the manufacturing process, to the consumer – product ownership based.

5. Some of the Certification Players • Forest Stewardship Council – FSC • Stated mission is to create a marketplace that promotes well-managed forests by ensuring forestry practices that are environmentally responsible, socially equitable, and economically viable. • > 60 Million acres in US

6. Sustainable Forestry Initiative – SFI Stated Mission: The Sustainable Forestry Initiative (SFI) program is based on the premise that responsible environmental behavior and sound business decisions can co-exist to the benefit of landowners, manufacturers, shareholders, customers, the people they serve, the environment, and future generations. 94.2 million acres in US – 2007

7. American Tree Farm System – ATFS • 24 million acres of privately-held forest land • Operating in the United States since 1941 • Currently offers some group certification options • Now has certification under an international program for forest certification systems – PEFC – Programme for the Endorsement of Forest Certification Schemes

8. Why Be Certified? • Independent confirmation that you use good management practices • Access to certified product markets • Opportunities for price premiums for some certified products • Access to other “Green Markets” • Public relations tool

9. Building Green – a driving force behind some certified forest products markets • “Green” Construction Standards may specify or provide extra credit for using certified sustainable products from one or more certification systems: • LEED • Green Globes • Others

10. Possible Downsides to Certification • Costs to obtain and maintain certification • Increased record keeping • May limit your flexibility in management • Someone will be looking over your shoulder • Uncertainty for the future of certification systems and markets – Who will be the top certifier? Will significant markets develop and last? Will price and market access offset costs?

11. Certification for Small Landowners • Group Certification provides a lower, or in some cases, no cost option for certification of smaller ownerships • You become certified as a member of a group • Groups have a manager who assures compliance to the standard by members • Groups could be formed by: • Forest Mgmt company • Landowners association • SWCD or similar group

12. Group Certification Opportunities • Indiana Classified Forest and Wildlands program is being used to create group certification opportunities for individual forest landowners in the program. • The program has ATFS group certification and is seeking FSC certification for eligible lands in the program. Voluntary. • Indiana Div of Forestry is covering the entry and annual costs of certification and will manage the group.

13. Group Certification Opportunities • The American Tree Farm System (ATFS) program is now certified by the PEFC – Programme for the Endorsement of Forest Certification Schemes An independent, non-profit, non-governmental organization, founded in 1999 which promotes sustainably managed forests through independent third party certification. The largest forest certification system in the world.

14. Tree Farm certification requirements • Management plan: The management plan requirements help streamline the process for Tree Farm owners to participate in USDA conservation incentive programs. The management plan requirements under the 2010-2015 Standards correlate with the US Forest Service guidelines for forest stewardship program forest management plans. Tree Farm management plans will address the following elements as appropriate: • landowner objectives • forest condition and health • management activities/ prescriptions • tract map • soils and water resources • wood and fiber production • threatened and endangered species, • high conservation value forests and other special sites • invasive species and integrated pest management

15. Compliance with Laws • Reforestation and Afforestation • Air, Water, and Soil Protection – BMP’s, pesticide use • Fish, Wildlife and Biodiversity – T&E species • Protect Special Sites - unique historical, archeological, cultural, geological, biological or ecological characteristics. • Forest owner must monitor forest product harvests and other management activities to ensure they conform to the management plan objectives.

16. Certified Acreage in the Region • Ohio is seeking FSC and SFI certification for state forests – 185,000 ac. • Indiana has FSC and SFI on state forests – 150,000. ATFS on C.F. – 460,000 ac.+ and seeking FSC for C.F. • Wisconsin has FSC and SFI on 2.9 MM acres of state and county forests. ATFS on 2 MM ac. private forest and seeking FSC. • Pennsylvania has 3.3 MM ac. state forest in FSC. • Michigan has 3.9 MM ac. in FSC and SFI

17. Developments Influencing Forest Certification • Demand for certified products is trending up • Green Building legislation in many states – including IN, KY, OH • Pressure from consumers to be “Green” • Corporate desire to be seen as “Green” • Increasing specification for certified wood • THE BIG ? – is this a fad or is this a market trend? How much of the marketplace will it occupy? Increasing demand over 10 + years.

18. Contacts for Forest Certification • Tree Farm: www.treefarmsystem.org or contact your local forester • PEFC: www.pefc.org/ • FSC: www.fscus.org • SFI: www.aboutsfi.org

19. Your Friendly Local State Tree Farm Committee

20. Unconventional Opportunities – they’re not for everyone, but work for some.

21. Thank You! If you wish to contact me: Lenny Farlee, Extension Forester , Purdue University Dept of Forestry and Natural Resources lfarlee@purdue.edu 765-494-2153 Hardwood Tree Improvement and Regeneration Center Charles Michler, Director Pfendler Hall, 715 W. State Street West Lafayette, IN 47907-2061 www.htirc.org

22. Carbon Markets for Conservation • Carbon sequestration programs offer private landowners an opportunity to access $ for certain conservation practices • The Chicago Climate Exchange provides a market trading platform for sale and purchase of Carbon Offset Credits, while producing verifiable reductions in carbon emissions from members

23. How the CCX works • Entities voluntarily agree to reduce carbon emissions through time • Part (but not all) of the reduction can be from purchased offsets • Practices that sequester carbon can be registered to sell accumulated carbon as verified offsets • Most landowners must work through an aggregator to sell their carbon on the CCX exchange

24. Types of Carbon Offsets • Tree Planting – urban and afforestation • Grassland planting • No-till farming • Managed forest lands • Range mgmt • Methane capture

25. Eligibility Afforestation- tree planting or natural regen. • Must have occurred since Jan. 1, 2003 on land previously non-forested or degraded for at least the previous 10 years. • Contract to maintain the project in forest for 15 years Managed Forest – NIPF land • Must be sustainably certified – SFI, FSC, or ATFS group certification • Inventoried to establish baseline carbon • Letter of intent to maintain certified sustainable management for 15 years

26. What is Carbon Worth? • A metric ton of carbon (2200lbs) was worth $1.80 to $1.90 on 10/1/08 (CCX quote) • Some annual carbon sequestration values per acre: • Tree plantations – 1 to 3 tons • Managed forest – 1 to 3 tons • Grass plantings – 1 ton • Conservation tillage – 0.6 ton

27. Who can help me sell my carbon? • Aggregators work with individuals to develop pools of carbon that can be sold • Delta Institute: www.deltacarbon.org 312 554-0900 • AgraGate: http://www.agragate.com/ 866 633-6758 • National Farmers Union: http://www.nfu.org 701-952-0116 • FORECON: http://www.foreconinc.com 616 874-9934

28. The Fine Print • Some expected fees to deduct from your income off carbon- • CCX charges $0.20 per ton of carbon traded • Your aggregator will generally charge a commission on carbon sales – 10% is normal • Verification fees are generally shared by the members of the carbon pool being sold – your share will depend on the relative size of your practice in the carbon pool. • 20% holdback of annual carbon sequestration to cover potential losses – released at contract end

29. Considerations in Selling Carbon • Agricultural, grassland planting, and afforestation carbon offset credits are relatively easy to access • Extra income for good land conservation • Managed Forest program is limited by sustainable certification requirements and cost of inventory – probably only feasible for larger forest holdings: 100+ acres? • Annual reporting is required – you may be audited to assure compliance