Devin Stockfish: Sure. Yes. I mean we are really pleased with this first carbon credit project. It’s not a big number in and of itself, but we learned a lot and I think we are building the foundation to scale this. And so we’ve got two more in the south slated for approval in the first half of next year. We got three more in the pipeline behind that. And remember, these just continue to build. So each of these projects will have annual credit releases. So part of how we are going to get to the $100 million is we’ve got a lot of different levers and that’s mitigation banking, conservation, renewables, carbon capture and storage and then the forest carbon. So I think it will probably be a little bit more heavily weighted to the existing businesses at the outset, but over time, we certainly think for us carbon, carbon capture and storage and renewables will make up a growing percentage of that.
And as I said in our opening remarks, the more we learn about this market, the more people we talk to, the trajectory of the opportunity set, I think we have a lot of optimism that the size of this business is ultimately going to scale up into something more meaningful than $100 million.
Susan Maklari: Okay. Thank you for all the color and good luck.
Devin Stockfish: Thank you.
Operator: Our next question is from Mike Roxland with Truist Securities. Please proceed with your question.
Michael Roxland: Thank you, Devin, Davie, and Andy for taking my questions. First one, just a point of clarification on EWP pricing. I think you mentioned in terms of the 4Q versus 3Q trajectory that price realization should be moderately lower, but then I think there was a comment made that product pricing should be stable through year-end. So how do I reconcile it? I mean, is it really that 4Q is really not going to move all that much relative to 3Q, it will be done slightly and therefore, that’s why product pricing should be stable? I’m just trying to reconcile a little bit of a discrepancy between the two comments.
Devin Stockfish: Yes, that’s right. And so remember, when we talk about EWP, I mean there are a number of products that go in there. So you’ve got solid section, Trust Choice. We got plywood and MDF all flow through EWP. So when we talk about solid, what we are primarily talking about is Trust Choice and Solid Selection [ph], which were the majority products. We are going to see a little bit of the last couple of quarters, we’ve had to make some targeted price adjustments. Those usually have a little bit of a time lag, which are kind of flowing into Q4. So that’s really what drives that slight down quarter-over-quarter. But on balance, we are seeing pretty stable demand and pricing across our Engineered Wood Products business.
Michael Roxland: Got you. Thank you. Still [indiscernible] sorry. One — on that price, the targeted price adjustments, I think even last quarter, you mentioned that you’re also making some price concessions on some products in order to remain competitive. So is that something as you think about your — how you operate in 3Q, did you do that maybe more in 3Q because you were slow to adjust your operating posture so in order to make up to maybe — or to be more competitive with your peers that you decided to lower prices more aggressively to make up for “less volume”?
Devin Stockfish: Yes. Actually, I think it probably had the opposite effect with very extended order files that probably took a little pressure off. But frankly, the way we’ve been approaching pricing is just very targeted and it’s been market by market, and every market has its own supply demand dynamic. And just like we do with all products, we adjust prices either down or up, depending on what that dynamic looks like in a particular region. So I wouldn’t say it was any kind of material moves in Q3. It was all very targeted and adjusted to the local supply-demand dynamic?
Michael Roxland: Got it. Got you. Appreciate it. And one last question just on EWP. Just can you comment where your operating rate was in 3Q. I think in the last call, you mentioned that you have a low 70 — low mid-70 type operating rate in 2Q and then you had a 50% in 1Q. So where was it in 3Q? Where do you think it will be in 4Q?
Devin Stockfish: Yes. So in Q3, it was kind of in the high 70s range for an operating rate across EWP, and we are thinking that to be more or less comparable for Q4. There are some puts and takes. We are adding presses to kind of keep up with the demand. But on the same token, we have a number of scheduled annual maintenance downtime. So net-net, it will be more or less comparable from an operating rate standpoint.
Michael Roxland: Got it. Thank you very much.
Operator: Our next question comes from Paul Quinn with RBC Capital Markets. Please proceed with your question.
Paul Quinn: Yes. Thanks very much. Good morning, guys. Just a question of [indiscernible] was pretty strong in the quarter, but we’ve got some additional volume coming on at the end of the year. Just wondering why you took maintenance in Q3 as opposed to typically Q4 and why the shipment volumes were lower?
Devin Stockfish: Yes. So a couple of things. From a maintenance schedule standpoint, we try to schedule them out over the year. To some extent, we may make minor adjustments depending on what’s going on end markets. But as a general matter, it’s very hard to predict what’s going to happen with OSB prices quarter-to-quarter. And so largely, you kind of have to schedule them to get them done each year and you sequence the mills out across the year. So the maintenance schedule, more or less we set in advance and absent some material change, we try to stick to that. In terms of the sales volumes, the big driver there, the production was pretty comparable quarter-over-quarter. The sales volume was down a little bit, and that’s really just a reflection of one of our mills where we had the annual maintenance downtime.
We have contracted volume really at most of our facilities. And so we had to build up a little bit of extra inventory in Q3 to sell-through during that maintenance downtime in October. And so that was really the difference between production and sales volumes. We’ve already moved most of that volume now through the system as we’ve come out of the downtime.
Paul Quinn: Okay. And then just over on the carbon credit side, congratulations on the project. Just wondering how we should think about that in terms of modeling that $475 million over the 20 years, obviously, comes out to lower than the 32,000 initials. So is that a straight line decline? And then when do you think about monetizing those credits?
