How Carbon Credits Can Increase Land Conservation Efforts

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For years, timber harvests and development opportunities have been a source of income for landowners worldwide. Carbon credits are changing that. One metric ton of carbon is offset from the atmosphere for every carbon credit purchased. This happens through an environmental project, such as reforestation. The more carbon credits purchased, the greener a company can […]

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For years, timber harvests and development opportunities have been a source of income for landowners worldwide. Carbon credits are changing that.

One metric ton of carbon is offset from the atmosphere for every carbon credit purchased. This happens through an environmental project, such as reforestation.

The more carbon credits purchased, the greener a company can be – which is why the industry is booming.

But there is another benefit here.

Revenue from carbon offsets could provide $250 billion annually for conservation efforts.

This means landowners can now receive compensation for conserving land instead of destroying it. So, carbon credits may, in fact, encourage conservation.

For land to qualify, it must be at risk of harvest or conversion. Landowners then sign an agreement to ensure they are committed to seeing these environmental projects through.

This makes sure that landowners are in it for the long haul. They cannot just sign up and then sell out.

According to the World Economic Forum, forest carbon projects undergo an intense verification process to help meet goals. It takes almost two years before their credits even hit the marketplace. So, the incentive to stick with this long-term is there.

There are decades of research used to let us know just how much carbon can be sequestered through a forest.

Then, a year after landowners sign their agreement, tree growth is checked to see if it is on track with projections. Only then are carbon credits issued.

Critics have always claimed that the lack of oversight within the carbon credit industry was why they could not support it.

However, increased ways to verify carbon sequestration are beginning to change that. Plus, leaders at COP26 have agreed on a global standard, putting many concerns to rest.

As more landowners take on sustainable forest projects, conservation has a chance.

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Shell & EKI Energy to Invest $1.6 Billion in Carbon Credits

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Royal Dutch Shell has partnered up with EKI Energy from India to develop nature-based solutions for carbon capture. The JV is expected to invest $1.6 Billion over a 5-year period to develop 155 million Carbon Credits. EKI Energy, is the largest carbon credit developer and supplier from the developing world. They currently serve over 2,500 […]

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Royal Dutch Shell has partnered up with EKI Energy from India to develop nature-based solutions for carbon capture.

The JV is expected to invest $1.6 Billion over a 5-year period to develop 155 million Carbon Credits.

EKI Energy, is the largest carbon credit developer and supplier from the developing world. They currently serve over 2,500 corporate customers with ~70% based in India.

The JV will work on conserving, enhancing, and restoring natural ecosystems such as grasslands, wetlands, forests, agriculture, and blue carbon.

Shell has set a target to become a net-zero emission energy business by 2050.

The carbon credits generated from these projects can be used either by Shell for its internal consumption or to sell in the open market.

A carbon credit is a certificate signifying that one tonne of carbon dioxide emission has been reduced from the atmosphere.

This can be done through nature solutions, such as planting trees, or through industrial applications such as using carbon-reducing agents at emission points.

These carbon credits can be traded to help more polluting entities meet increasingly stringent carbon-emission norms.

Shell and EKI have signed on the exclusivity clause in contract to form the JV.

The carbon credits generated from the projects the JV undertakes will be shared in proportion to the investment Shell or EKI makes.

If Shell invests 75% of the capital in a project, it will get 75% of the carbon credits generated from it.

Positive sentiment driving this share is due to the growth of net-zero commitments being made as the world focuses on lowering the carbon footprint.

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Increased Demand for Carbon Offsets in Asia

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Demand for carbon offsets in Asia is increasing across the global supply chain, IT, and banking industries. Many companies want to lower their carbon footprint, especially after COP26. One way they are doing this is through the use of carbon offsets. Carbon offsets are when a company offsets its carbon emissions by buying carbon credits. […]

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Demand for carbon offsets in Asia is increasing across the global supply chain, IT, and banking industries.

Many companies want to lower their carbon footprint, especially after COP26. One way they are doing this is through the use of carbon offsets.

Carbon offsets are when a company offsets its carbon emissions by buying carbon credits. One metric ton of carbon is offset by an environmental project for every carbon credit bought.

Simply put, one carbon credit equals one metric ton of carbon.

With no global standard, offsets were often criticized. But that has now changed.

At COP26, leaders agreed to:

  • Set a global standard to create, account for, and verify carbon credits. This will help prevent double counting. It will also improve the quality of offset projects.
  • Allow certified emissions reductions (CERs) to be traded through Internationally Transferred Mitigation outcomes (ITMOs).
  • Provide countries with the choice to use or sell offsets to other countries.

With these changes, companies see the potential of the carbon offset industry, causing it to boom. But that isn’t all. Demand for Renewable Energy Certificates (RECs) is increasing as well.

RECs are just like carbon credits – except their focus is on renewable energy. One REC equals one megawatt-hour (MWh) of renewable electricity with RECs.

Singapore-based T-REC.ai is one of eight companies approved by the US to register and verify RECs. Demand has reached 20 million RECs – accounting for half of the city-state’s power consumption.

However, demand was so high, they could only fulfill orders for 500,000 certificates.

Kang Jen Wee, founder and CEO of the exchange told Reuters that the company was working to register more renewable power suppliers.

Global companies want their suppliers across Asia to purchase RECs to offset emissions. Right now, the price ranges from $3 – $30 per REC.

Kang believes the exchange will grow by 10 million RECs next year. He expects it to reach 100 million by 2025.

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Honeywell Carbon Capture Partnership with University of Texas

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Honeywell and the University of Texas at Austin have partnered together to drive down the cost of carbon capture from power plants and heavy industry. The UT Austin team has created a system that will improve carbon capture performance. This makes the process more efficient for industries such as steel, cement, chemical plants, coal, natural […]

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Honeywell and the University of Texas at Austin have partnered together to drive down the cost of carbon capture from power plants and heavy industry.

The UT Austin team has created a system that will improve carbon capture performance.

This makes the process more efficient for industries such as steel, cement, chemical plants, coal, natural gas, and bio-energy power plants.

The licensing agreement with Honeywell enables UT Austin to commercially scale & make major contributions toward zero emissions.

The difference between UT Austin’s system and others is that they utilize an advanced solvent. This technology can be used within existing plants or included within new systems.

This can make carbon capture less expensive and more efficient.

Honeywell is capturing, storing, and utilizing approximately 15 million tons of carbon per year – with the potential to capture 40 million tons annually.

They are committed to reaching carbon-neutral operations and facilities by 2035.

Like carbon offset projects, Carbon Capture and Storage projects (CCS) are growing in popularity.

In 2020 alone, CCS projects captured and stored 40 million metric tons of carbon. However, to meet new emissions goals, CCS must increase to 840 million metric tons by 2030.

While increasing CCS project capacity 20x seems like a challenge, partnerships such as Honeywell and UT Austin can help get us there.

UT Austin has been a leader in carbon capture research for more than 20 years.

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Energy CEO Skeptical of Carbon Capture

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Francesco Starace, CEO of Enel, a multinational Italian energy firm, isn’t so sure about carbon capture and storage. He suggests that it is not a solution to the climate change crisis. Carbon capture aims to stop CO2 from reaching the atmosphere by keeping it underground in geological formations, but Starace sees it differently. “We have […]

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Francesco Starace, CEO of Enel, a multinational Italian energy firm, isn’t so sure about carbon capture and storage.

He suggests that it is not a solution to the climate change crisis.

Carbon capture aims to stop CO2 from reaching the atmosphere by keeping it underground in geological formations, but Starace sees it differently.

“We have tried and tried — and when I say ‘we,’ I mean the electricity industry,” Starace told CNBC.

“You can imagine, we tried hard in the past 10 years — maybe more, 15 years — because if we had a reliable and economically interesting solution, why would we go and shut down all these coal plants [when] we could decarbonize the system?”

“The fact is, it doesn’t work; it hasn’t worked for us so far,” he said. “And there is a rule of thumb here: If a technology doesn’t really pick up in five years — and here we’re talking about more than five, we’re talking about 15, at least — you better drop it.”

Starace went on to say that there is one solution.

“Basically, stop emitting carbon.”

Though Starace has not seen much success with carbon capture and storage within his own industry, that doesn’t mean that it doesn’t have a role to play.

Like carbon offsets – carbon capture and storage should be used alongside new technologies that reduce carbon emissions, not just neutralize, or capture them.

The carbon offset industry continues to grow – and with COP26 leaders setting a global standard, experts believe it will be integral in helping companies meet increasing regulations.

Alongside Starace’s announcement, Enel has moved its net-zero target date from 2050 to 2040. They expressed a desire to exit coal generation by 2027 and gas by 2040.

Per Starace, “We’re saying we’re going to be zero carbon, which means we’re not going to emit carbon.”

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