State forest carbon offsets ‘on pause’

Forested land on the western bank of the Lynn Canal near Haines, July 14, 2025. (Will Steinfeld/Chilkat Valley News)

By Will Steinfeld

Chilkat Valley News

The State of Alaska is pausing a carbon credit initiative that had been projected to potentially generate over a hundred million dollars of revenue from the Haines State Forest. 

State forest timber has long generated revenue by being logged and sold. For the last three years, the state has pursued a program that would have done the opposite: generating revenue specifically by not logging and selling the timber. 

In 2023, new state legislation authorized the Department of Natural Resources to lease state land for generating carbon credits. Under the plan, endorsed by Gov. Mike Dunleavy and nearly the entire state legislature, the carbon credits would be sold to private corporations seeking to meet private emissions goals; in other words, private entities could pay the state not to cut trees, and in turn the private entities would lay claim to the environmental benefits of the conservation. 

The roughly 270,000-acre Haines State Forest has for years been named as a possible location of such carbon offset projects by both state and non-state groups. 

In 2022, a DNR report pitching the carbon credit plan to the legislature identified the Haines State Forest as one of three potential pilot areas for the program. Analysis in the report projected Haines State Forest revenue at nearly $33 million over the first 10 years of carbon crediting, and more than $100 million over 40 years. 

That specific type of carbon offset — generated by not cutting timber, is no longer in the state’s plans. In a presentation Tuesday, DNR carbon offset program manager Trevor Fulton told the state’s Board of Forestry that an initial pilot project in the Tanana State forest “more or less came to a halt” last year. 

The state says that was a result of global regulatory changes. In 2024, the American Carbon Registry, the private entity that would have verified the state’s carbon credits for sale on the market, made a number of changes to its verification methodology. 

The type of carbon credits the state had sought to sell have faced global criticism, including research showing fraudulent inflation of timber harvest baselines — how much timber would’ve been cut if not for the credits.

The more stringent regulations sought to address dropping prices and market concerns regarding the trustworthiness of calculating carbon savings from uncut timber, Fulton said. 

Complying with that new methodology would have meant significantly limiting timber harvest, which “failed to align with DNR’s broader timber management goals,” Fulton said. 

Specifically, prior to the update, credits could be calculated based on the difference between the maximum legal amount of timber harvest and the actual amount of harvest. Under the new methodology, projects must “establish a baseline based on past harvest levels (the last 5 to 10 years) and then drastically cut or completely stop harvesting moving forward,” Fulton wrote in an email Tuesday. 

Whether that type of carbon credit project returns will depend on entities like the American Carbon Registry, Fulton said, and whether they revise existing rules, or if “new methodologies and even new registries come online.”

The Department of Natural Resources is now exploring whether it can shift to generating a new type of carbon credit, earned by planting new trees, rather than preserving existing ones, Fulton said. The department is evaluating the possibility of generating those credits on land cleared by severe wildfire. 

Because new trees remove carbon from the atmosphere, the credits from replanting are known as removal credits, rather than the avoidance credits sold from preserving existing forest land. Fulton said prices for removal credits are roughly 2-3 times higher than for avoidance credits, a reflection of easier accounting when adding a definite amount of new trees.  

Avoidance credits had been a key part of the ongoing re-write of the Haines State Forest management plan. 

Under the existing management plan, the forest is split into 30 subunits, each with its own set of allowed uses — some with commercial timber harvest, some not. 

The draft of the new management plan would change that section-by-section regulatory framework, instead allowing multiple uses across all land in the Haines State Forest. The multiple uses would include timber harvest, and by allowing timber harvest, would have allowed for carbon credit generation across the state forest’s entire acreage. 

The change to the management plan has two overarching policy goals, Division of Forestry regional forester Greg Palmieri said this week. One is to “make carbon projects available on all state lands… as the legislature has directed us.” The second is to “align the document with the statute providing multiple uses in the state forest” by adding timber harvest forest-wide. 

Even so, changes to the state’s carbon credit program will not have any effect on the management plan rewrite, Palmieri said, because the re-write only dictates broad land classifications, without assigning specific projects that might occur on that land in the future. 

“Carbon projects have to be available on state lands and that’s what our policy does,” he said. “There are no projects being proposed. That specific process comes later down the line.” 

• This story originally appeared in the Chilkat Valley News.