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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Blockchain Carbon Credit Token Lists on Coinbase

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Moss (MCO2), a blockchain carbon credit token company, recently listed on one of the world’s largest crypto exchanges, Coinbase. Moss is a Brazilian startup that created the first carbon credit-backed token used to offset greenhouse gas emissions. Since then, Moss has processed about $20 million in transactions and has assisted in the conservation of ~735 […]

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Moss (MCO2), a blockchain carbon credit token company, recently listed on one of the world’s largest crypto exchanges, Coinbase.

Moss is a Brazilian startup that created the first carbon credit-backed token used to offset greenhouse gas emissions.

Since then, Moss has processed about $20 million in transactions and has assisted in the conservation of ~735 million trees in the Amazon through internationally verified and audited programs.

The MCO2 Token is equal to one carbon credit, or one metric ton of CO2 that is no longer emitted into the atmosphere as a result of REDD and REDD+ (Reducing Emissions from Deforestation and Forest Degradation) program.

MCO2 has already been employed by over 300 companies worldwide. Moss recently provided the offsets for One River Asset Management’s carbon-neutral bitcoin fund.

Moss has also collaborated with Brazil’s largest airline, GOL, to allow its customers to offset their emissions by purchasing the MCO2 token.

Gol has the world’s fifth-largest Boeing fleet and transports over 20 million passengers per year.

This collaboration amounts to more than 2.3 million MCO2 exchanged, or more than 2% of the total volume of carbon credits traded globally each year.

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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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Wall Street’s Carbon Crisis

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A new report shows that Wall Street is the fifth-largest carbon emitter, coming in just after Russia and before Indonesia. In 2020, 8 of the largest US Banks and 10 of the largest US asset managers financed $2 billion tons of carbon emissions. Though major corporations have shared their support for net-zero initiatives, the “Wall […]

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A new report shows that Wall Street is the fifth-largest carbon emitter, coming in just after Russia and before Indonesia.

In 2020, 8 of the largest US Banks and 10 of the largest US asset managers financed $2 billion tons of carbon emissions.

Though major corporations have shared their support for net-zero initiatives, the “Wall Street’s Carbon Bubble” report by the Sierra Club and the Center for American Progress (CAP) says it isn’t enough.

Some banks are continuing to fund oil and heavy industries, but many have joined the Glasgow Financial Alliance for Net Zero (GFANZ) to limit their investment in heavy emitters.

“If left unaddressed, climate change could lead to a financial crisis larger than any in living memory,” said Andres Vinelli, vice president of economic policy at CAP.

According to Insurer Swiss Re, the global economy could lose 18% of current GDP by 2048 if no action against climate change is taken. So, whether you are an environmentally-conscious investor or not, there is cause for concern.

The report went on to say that financial institutions across the 20 largest economies have $22 trillion worth of assets within carbon-intensive sectors.

Following the report’s release, SEC Commissioner Caroline Crenshaw acknowledged the concerns expressed but drew attention to actions taken at COP26.

Many public companies have pledged to reach net-zero with world leader support.

However, she did say, “It’s sometimes unclear to me how companies will achieve these goals. Nor is it clear that companies will provide investors with the information they need to assess the merits of these pledges and to monitor their implementation over time.”

Crenshaw added that “metrics calculated using reliable and comparable methodologies that enable investors to decide whether companies mean what they say” will play a significant role moving forward.

The Securities and Exchange Commission is looking at more rigid climate reporting rules from publicly traded companies, including banks.

A ruling could take place as soon as next year.

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Elysian Carbon Management Secures $350M

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Earlier this month, Elysian Carbon Management secured a $350 million investment from EnCap Flatrock Midstream (EFM). Elysian provides integrated, full-service carbon capture and storage solutions across industries and power facilities. The funds will allow Elysian to focus on developing integrated carbon capture and storage solutions. The overall goal is to reduce carbon emissions by at […]

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Earlier this month, Elysian Carbon Management secured a $350 million investment from EnCap Flatrock Midstream (EFM).

Elysian provides integrated, full-service carbon capture and storage solutions across industries and power facilities.

The funds will allow Elysian to focus on developing integrated carbon capture and storage solutions. The overall goal is to reduce carbon emissions by at least 10 million metric tons per year.

EnCap Flatrock Midstream was formed in 2008 and manages nearly $9 billion in assets. They are based in San Antonio, with Oklahoma City and Houston offices.

As more companies seek ways to offset their carbon emissions – the carbon capture and storage industry is expected to increase – just like the carbon credit industry.

EFM Managing Partner David J. Kurtz, a member of the Elysian board of directors, said, “Elysian is at the forefront of developing projects necessary to support carbon reduction goals across North America. Few independent teams in this nascent sector have a comparable depth and breadth of the technical, financial, and operational experience needed to bring CCS projects to fruition.”

As the climate crisis continues, carbon capture, carbon storage, and carbon offsets will be needed to help mitigate environmental risk. Continued partnerships, such as Elysian and EFM, will help make environmental, social, and governance goals attainable.

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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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