This decade, we have seen rapid change in the number and complexity of regulatory market-based environmental programs in North America. Our team provides a unique combination of policy and industry expertise, financial experience and scientific training to help clients operating under these policies achieve optimal outcomes, We take a long-term view and advocate for effective yet viable environmental policies.
– Derek Six, Chief Business Officer
Regulated Carbon Market
Policy & Advisory Transaction Services Project Development
ClimeCo actively participates in regulated markets across North America, from cap-and-trade to hybrid market designs. Throughout these variable and complex programs, our mission remains the same: to help clients minimize their compliance obligations and capitalize on unique market opportunities where available. ClimeCo is an expert in the following programs:
Policy & Advisory
CCIR and Hybrid Market Programs
For Alberta’s CCIR, which replaced the Specified Gas Emitters Regulation (SGER) on January 1, 2018, ClimeCo offers a comprehensive suite of services to help optimize program participation:
- Government engagement and negotiation strategy
- Market fundamentals and regulatory overviews
- Evaluation of commercial contracting and trading parameters
- Identification of beneficial transaction opportunities
- Development of competitive market participation processes
- Negotiation and review of contracts
- Closing and delivery transactional support
ClimeCo has been active in the WCI markets since the inception of California’s cap-and-trade program in 2013. Our team assists clients with a wide variety of services, such as:
- Auction participation support
- Program reports, analysis, advocacy and forecasting
- Compliance planning and operations review
- Allowance and offset procurement optimization
- Agency negotiations
- CO2 abatement strategies
- Assessing the impact of GHG-reduction strategies on other local, regional and state air regulatory requirements
Through decades of permitting experience, ClimeCo has amassed in-depth expertise in industrial processes. This knowledge helps us successfully assist clients with benchmark negotiations and CO2 abatement strategies. In-house experts in air permitting, air dispersion modeling, project finance and entity GHG quantification augment our advisory capabilities.
In addition to the WCI and CCIR, ClimeCo provides trading and advisory services for related programs, such as the Low Carbon Fuel Standard (LCFS) and the EPA Cross-State Air Pollution Rule (CSAPR) as well as with the California Air Quality District permitting process. Clients benefit from our overarching understanding of all the programs that may affect them and how those programs relate to each other.
ClimeCo’s core strengths in sourcing environmental commodities and assisting clients with transactions stem from our comprehensive market knowledge (including both existing and proposed regulatory frameworks), our in-depth relationships with market participants and our extensive contracting expertise. We do much more than simply connect a buyer and seller; we work with both parties throughout the entire process to ensure a win-win solution.
The WCI presents a unique opportunity for companies to capitalize on credit transactions. California’s carbon cap-and-trade program permits regulated emitters to surrender lower-cost carbon offsets instead of allowances for up to 8% of their total surrender obligation in each compliance period (this decreases to 4% beginning in 2021). This allows emitters to leverage a greater number of offset credits, receive a payment to help reduce overall compliance costs, or both. By trading some of their current allowances for offsets, companies typically realize savings of 10% or more. ClimeCo has streamlined the process by offering a short, simple contract; by providing easy delivery of offsets to clients’ CITSS accounts; and by guaranteeing delivery and validity of the offset products.
Project Development Services
ClimeCo develops and manages offset projects across North America, working under the WCI with compliance credits and CCIR programs in Alberta, Canada, where numerous protocols allow instruments to be created in the Alberta Emissions Offset Registry. We engage in a wide variety of project work, with special expertise in:
- Livestock manure methane capture and destruction
- Ozone-depleting substance (ODS) destruction
- N2O abatement at nitric acid production plants (CCIR) in Alberta
Our rigorous process for each project includes the following:
- Identifying and qualifying eligible project opportunities
- Managing any or all steps (as needed) from contracting through construction, using a network of established project partners
- Monetizing the environmental credits generated by the project
Our livestock and ODS projects generate approximately 1 million tonnes per year. In addition, the two N2O abatement projects we operate in Alberta, Canada, generate approximately 550,000 offsets per year for use in Alberta’s CCIR program.
T&M Dairies, Fair Oaks, Indiana
Over a decade ago, ClimeCo partnered with T&M Dairies, a group of four dairies in Indiana that manages more than 20,000 animals. Manure from the animals was stored in open-air lagoons that allowed the release of methane into the atmosphere. ClimeCo arranged for installation of anaerobic digesters at each farm to process the manure and capture the generated methane for use in electricity production. We have been monitoring, registering and monetizing the carbon credits created from the reduction of methane emissions ever since. To date, the project has generated more than 590,000 offset credits, with average annual emission reductions of approximately 60,000 metric tonnes of CO2e.
ClimeCo engages with a network of appliance recyclers, refrigerant reclaimers, wholesalers, municipal authorities and industrial/manufacturing clients to responsibly collect and successfully destroy chlorofluorocarbon refrigerants from various used refrigeration systems. After aggregating refrigerant stocks, we oversee the destruction process using California ARB’s ODS protocol and approved destruction facilities. We ensure that the process satisfies all protocol requirements and the third-party verification process. Thus far, ClimeCo’s ODS program has generated more than 2.9 million offset credits.
Livestock Methane Reduction
ClimeCo has extensive experience in developing and commercializing projects that reduce methane produced by livestock. We have developed and financed 15 livestock manure anaerobic digestion projects on dairy and swine operations and have managed the quantification, registration, and sale of carbon credits for more than 40 projects in the United States, Mexico, and South America. For each project, methane emissions are captured and used to produce energy. The process not only destroys a potent greenhouse gas and reduces the marginal damage cost of carbon, but also creates an additional revenue stream for the farm or reduces its operating costs through power generation. In turn, our clients use the carbon equivalent (CO2e) reductions to offset their footprints. For new livestock methane reduction projects, ClimeCo typically assists clients by providing the following services:
- Preliminary dairy feasibility evaluation
- Initial screen and selection of diaries for further evaluation and project proposals
- Presentation of project evaluations and proposals to farmers
- Presentation, negotiation, and execution of project term sheets
- Detailed project-specific due diligence
- Portfolio selection
- Presentation, negotiation, and execution of definitive agreements
- Development of permit/interconnection/PPA applications
- Development of supplemental grant funding proposals
- Full-scale design-build and operation services
- Project Funding