Nation's first carbon offset project on state forest land is in Michigan

First of its kind to leverage the carbon storage capacity of trees in state forests

Photo of Angela Mulka

Part of Michigan's 3.9 million acres of state forest land will now yield carbon credits that will help Michigan's largest energy company, DTE energy, reduce its carbon footprint.

This announcement comes after Michigan's Department of Natural Resources and DTE Energy finalized their agreement on Wednesday to establish the nation's first carbon credits program on state forest land. Additionally, the agreement will add an estimated $10 million in revenue to assist in natural resource management.

The Bluesource/Michigan DNR Big Wild Forest Carbon Project is the first of its kind to leverage the carbon storage capacity of trees in state forests. The project offers a portfolio of carbon offset credits generated from sustainable forest management activities on more than 100,000 acres of the Pigeon River Country State Forest — known as "The Big Wild" — in the northern Lower Peninsula.

“Our natural resources are a core aspect of our identity as Michiganders,” Gov. Gretchen Whitmer said in a statement. “To meet our long-term commitment to decarbonization we need to utilize innovative partnerships to increase revenues for land and climate programs. Under today’s program, we are pursuing a climate-smart forestry strategy and effectively utilizing our natural and working lands to decrease pollution and protect public lands."

State forest land was picked for the carbon offset program because a single tree can absorb as much as 48 pounds of carbon dioxide in a year. By the time a tree is 40 years old, it can store one ton of carbon. If these trees are then used to make wood products, the carbon they absorbed from the atmosphere is captured or "stored" within the manufactured furniture, houses and countless other items, according to the DNR.

Companies that produce carbon emissions during their regular operations can offset this negative impact to the environment by purchasing carbon credits from entities that reduce carbon dioxide and other greenhouse gases. One carbon credit equals one ton of carbon dioxide emission, according to the DNR. In this case, state forests absorb carbon as trees grow, locking it into wood and durable forest products manufactured from harvesting trees. Studies show carbon capture (sequestration) aids in the global effort to reduce carbon in the atmosphere, and keep climate change in check.

“We’re proud to partner with the DNR on this innovative way to help Michigan get cleaner, faster,” said Matt Paul, president and chief operating officer at DTE Gas, in a statement. “These offsets will be made available to our customers that are seeking impactful ways to reduce their carbon footprint and join DTE on its journey to net zero greenhouse gas emissions by 2050. The Pigeon River Country State Forest project is an excellent complement to the 24,000 acres of Michigan forest we are already protecting through Natural Gas Balance, our voluntary program that helps residential and small business gas customers reduce their carbon footprint.”

Why should the levels of carbon and greenhouse gases in the atmosphere be reduced?

Scientists at the Intergovernmental Panel on Climate Change have shown that increased levels of greenhouse gases in the atmosphere are warming the planet. This creates extreme weather changes around the world. Currently, burning fossil fuels — coal, oil and gas — is the main driver of increased greenhouse gas levels.

Under the banner of the UN and Paris Agreement, the world's countries have come together to declare that urgent action must be taken to lower emissions if we are to maintain a habitable planet that can support the world's population. And, the latest research emphasizes that urgent action must be taken by everyone in order to safeguard some of the most vulnerable ecosystems and communities on the planet, according to South Pole, a group that develops and implements comprehensive emission reduction projects and strategies.

DTE Energy will offer these offsets to its larger industrial natural gas clients seeking to reduce the impact of carbon emissions through a voluntary program called "Natural Gas Balance." The company has agreed to buy all of the carbon credits generated off the Pigeon River Country State Forest during the first decade of the program, at an estimated cost of more than $10 million. Payments to the State of Michigan will start with the first delivery of carbon credits to DTE in 2022.

Bluesource, the company chosen to manage the DNR's pilot carbon credit marketing project, will provide updates on the revenue stream's timeline and size.

The purchase of carbon credits allows DTE to offer carbon offsets to customers with significantly higher energy usage, a move that also aligns with DTE’s goal of achieving net zero carbon emissions by 2050.

Additionally, the project will allow the DNR to credit crucial dollars to funding sources that support the Pigeon River Country State Forest. Revenue generated from these carbon credit purchases will be directed to the state’s Forest Development Fund and the Fish and Game Fund for efforts that could include tree planting, forest infrastructure, wildlife habitat improvements, recreation projects and more.

This will also allow more trees to stay in place long term to aid in the project, according to the DNR.

"Bluesource projects have reduced hundreds of millions of tons of greenhouse gases over our 20-year history, and we can’t scale without the climate finance provided by progressive companies like DTE,” Bluesource Vice President of Environmental Markets Ben Massie said in a statement. “Their long-term investment in credits from Michigan DNR’s Big Wild Forest Carbon Project gives DTE customers an impactful way to reduce their carbon footprint, while at the same time driving sustainable forest management and value within the state.

“I hope other states and public lands follow the DNR’s lead and recognize that a change to progressive forest management, with an eye to promoting carbon stocking, not only nets revenue but allows for continued recreation, boosts the local economy, conserves water resources, and provides continuing educational opportunities,” Massie continued.

Fundamentally, the purchase of a carbon offset represents an investment into the environmental action project. Without the revenue from the carbon offsets, these projects wouldn’t exist to provide an incentive to environmentally-minded land owners around the world, according to Massie.