Methane Recovery Project, Mexico.
Eco Global Markets focuses on originating, developing and trading carbon credits generated from projects that directly mitigate climate change. We work with companies from developing countries across the globe to create carbon credits in a wide variety of sectors. Eco Global Markets also work with companies in the developed world to assist them in meeting their greenhouse gas emission compliance targets.
Eco Global Markets owns ten (10) emission reduction projects developed in the Yucatan Peninsula in Mexico. These projects facilitate emission reductions through animal waste management systems resulting in carbon credits, which are considered for use in the Californian compliance program and the California Emissions Trading Scheme (CA ETS), providing hedging with exit via two markets.
Location: Mexico • Sub sector: Animal Waste Management • Instrument type: Dual listed pre compliant carbon credits (CCA/CRT) • Exit: 2013-2014 • Risk: Low/Medium
Methane Capture Methane capture projects prevent the release of methane, a potent greenhouse gas, into the atmosphere. Methane emissions from manure management systems may be captured with an anaerobic digestion system (AD system) that flares* the gas. Methane released from the anaerobic decomposition of manure depends mainly on the storage temperature, storage time, and manure composition. In the climate change policy debate, methane capture projects have garnered attention for their ability to mitigate greenhouse gas emissions. Methane (CH4) constituted approximately 8% of U.S. greenhouse gas emissions in 2011. Efforts to reduce emissions of methaneâ€”the second-most important greenhouse gas after carbon dioxide (CO2)â€”could play a significant role in climate change mitigation. * Flaring is the combustion of the gas without commercial purposes. Flaring produces carbon dioxide which is a greenhouse gas 23 times less potent than methane
Opportunity These projects provide exposure to California’s compliance system at an early stage, thus providing heavily discounted market entry rates facilitating a substantial yield on investment. In addition to this, a secondary opportunity is available to exit via California’s Emissions Trading Scheme (CA ETS). With the inclusion of Mexican livestock projects into the Californian compliance system, in conjunction with an under supply of offsets, a market floor price of US$10 has been assumed. The floor price has been legislated into Californian law and is expected to take effect from time of market implementation, scheduled to be Q4 2012.
Exit There are two exit opportunities. The first involves downstream sale into California’s compliance system based on project inclusion within Air Resources Board’s (ARB) accepted protocols. The second is the sale of CRTs via the California’s Emissions Trading Scheme (CA ETS). Target exit date – December 2013.
Carbon Trading could be worth twice that of oil in the next decade. The market could be worth
3 trillion a year The Guardian
Links Testimony from Climate Action Reserve’s (CAR)s President that Mexico’s first project has CAR’s support www.climateactionreserve.org/wp-content/ uploads/2012/05/Select-Committee-onCalifornia-Mexico-Cooperation-ReserveTestimony-Final-05-02-12.pdf Project recognised by President of Mexico, Felipe Calderon. www.eluniversal.mx/notas/761402.html ‘Reserve Achieves Milestone’ www.climateactionreserve.org/?s=CRT&x=7&y=5 www.climateactionreserve.org www.arb.ca.gov/cc/capandtrade/capandtrade.html www.thegreenx.com www.climateactionreserve.org/how/protocols/ mexico-livestock/
Source â€“ The Green Exchange
Methane Recovery Project, Mexico
Traded on The Green Exchange
Eco Global Marketsâ€™ clients sign an Emission Reduction Purchase Agreement (ERPA) for the pre issue carbon credits. These funds will be used by our project developer to undertake the strict validation and accreditation process under the Climate Action Reserve (CAR). Upon completion of this process, credits will be issued to our clients ready for sale within the The Green Exchange.
The Air Resources Board (ARB) has included in its regulation a targeted price range for allowances from a low of $10 to a high of $50 per tonne of emissions. This price range will guide the amount that covered entities bid at auction.
What are Climate Reserve Tonne (CRT)s? When purchasing carbon offsets that have been issued by the Climate Action Reserve, the unit of measurement is the CRT (Climate Reserve Tonne), which represents one metric tonne of carbon dioxide equivalent emissions reduction or sequestration (CO2e). CRTs are well-respected as being among the highest quality offsets available. They meet the criteria of being real, permanent, additional, verifiable and enforceable. This means CRT buyers can be confident that the offsets they purchase provide true and credible benefit to the environment.
What is the Climate Action Reserve (CAR)? As the premier carbon offset registry for the North American carbon market, the Climate Action Reserve encourages action to reduce greenhouse gas (GHG) emissions by ensuring the environmental integrity and financial benefit of emissions reduction projects.
The Reserve establishes high quality standards for carbon offset projects, oversees independent third-party verification bodies, issues carbon credits generated from such projects and tracks the transaction of credits over time in a transparent, publicly-accessible system.
Why invest in CRTs/CCAs? As of Q4 2012, a live exchange for CRTs and CCAs will commence as part of the California compliance cap and trade system. CRTs which will convert to CCAs are currently trading at circa $16*. This, added to the recent surge in volumes, coupled with the legislated floor price of $10 suggests real upside with minimal downside risk. *As of July 2012 (source - The Green Exchange)
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