Carbon Offsets
CommonWealth has been a market leader in the creation and monetization of high value carbon offsets based on the capture and destruction of landfill methane, a greenhouse gas with a global warming potential at least 28 times greater than that of carbon dioxide. The methane is captured at projects that prevent that gas from escaping to the atmosphere by using it as a fuel to produce renewable electrical power. In that context we have worked over the years with other pioneers in the carbon market space, including the American Carbon Registry, Verra (formerly the Verified Carbon Standard Association), the Environmental Defense Fund, and (when they existed) the Chicago Climate Exchange and the U.S. EPA Climate Leaders Program.
CommonWealth’s carbon market activity focuses on business-to- business transactions, working with institutions, corporations, environmental commodity traders and other market intermediaries. Accordingly, the information that follows is intended primarily for use by entities considering large-volume purchases or retirements of verified carbon-equivalent emissions reductions via bi-lateral transactions that are initiated off-line. Such transactions typically involve one-time delivery of previously registered, serialized offsets. However, they may occasionally involve forward commitments for delivery of offsets associated with future emissions reductions. The transactions are subject to the terms of standardized purchase and sale agreements that also serve as trade confirmations.
Offset project type and ownership. At this time, all of the offsets offered by CommonWealth are being generated at the Greater New Bedford LFG Utilization Project (the LFG Project), which is owned and operated by CommonWealth through its project company, CommonWealth New Bedford Energy, LLC (“CNBE”).
The LFG Project is located at a publicly-owned landfill in southeastern Massachusetts. The company does not act as a re-seller or broker of offsets generated at projects owned by unaffiliated third parties. More on the LFG Project can be found at the Project Development page of this website.
Offset transaction types and offset quality. Offsets from the LFG Project are currently issued and transacted on the U.S. -based and internationally-recognized Verra Registry, where they are denominated as Verified Carbon Units (“VCUs”). Each unit represents one metric ton of CO2-equivalent (“CO2e”) emissions reductions that have been independently verified in accordance with program standards and technical criteria established or adopted by the issuing registry. The offsets generated by the LFG Project and issued on the Verra Registry conform to the project validation methodology for landfill methane projects issued by the United Nations Framework Convention on Climate Change (“UNFCCC”), and certified as meeting the Core Carbon Principles (“ССР”) standard of the Integrity Council for the Voluntary Carbon Market (“ICVCM”). Independent verification of all project emissions reductions claims is further provided by ISO 14064-compliant third-party verification entities approved for use by the Verra Registry. In the past, the LFG Project was also validated for listing and offset generation on the American Carbon Registry. Users of offsets can be assured that any specific tranche of verified emissions reductions associated with the LFG Project can only be issued and registered as one type of offset product on one registry at a time.
All carbon offset transactions result in either (a) the transfer of specific, serialized units between registry account holders, or if the counterparty is not a registry account holder, then (b) the permanent retirement of specifically serialized units on behalf of that counterparty or its designated “retiree”. In the latter case, it is important for the retiree entity to understand that it does not become an “owner” of the retired units. Rather, those units are taken permanently out of circulation on the retiree’s behalf and cannot be re-transacted.
Available quantities. The quantity of offsets generated by any project will vary based on factors that affect its operations. For discussion purposes, offsets generated by the Greater New Bedford LFG Utilization Project may be available in quantities ranging from 100,000 to 125,000 metric tons per year.
For more information regarding offset price, terms and availability please contact Anton Finelli at (617) 327-8146 or by email at afinelli@crmcx.com.
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