Topic started due to our own Mr Geoff wards statement "“there's an enormous benefit in operating on biogas because we geta large carbon abatementcredit and weactually become a carbon-negative process working on renewable biogas.” Mr Geoff Ward Hazer in a interview with Alan Kohler 24 Oct 2019 " And a interesting article in the Melbourne Age today.

Enjoy and discuss

Carbon Credits/Offsets and possible benefit for HAZER

Why consider this?

Hazer, BASF, Linde/BOC, Monolith and others all have mention methane pyrolysis CO₂-neutral or negative and some chatter about credits reported as “US$45 billion 2019” and growing (See overview of Carbon Pricing). Hazer “there's an enormous benefit in operating on biogas because we geta large carbon abatementcredit and weactually become a carbon-negative process working on renewable biogas.” Mr Geoff Ward Hazer in a interview with Alan Kohler 24 Oct 2019 Makes the topic a investor consideration of interest to myself.

Types of Carbon Credits

There is two types of credits: Voluntary emissions reduction (VER): A carbon offset that is exchanged in the over-the-counter or voluntary market for credits. Certified emissions reduction (CER) Emission units (or cred its) created through a regulatory framework with the purpose of offsetting a project's emissions. “CER” is considered equivalent to one metric ton of CO₂ emissions. These allowances can be sold privately or in the international market at the prevailing market price. These trade and settle internationally and hence allow allowances to be transferred between countries. Each international transfer is validated by the UNFCCC. Each transfer of ownership within the European Union is additionally validated by the European Commission.”

Overview of Carbon Pricing

World Bank- Stateand Trends of Carbon Pricing 2020

“Thereare now 61 carbon pricing initiatives in placeor scheduled for implementation,consisting of 31 ETSs and 30carbon taxes (Figure ES.1), covering 12gigatons of carbon dioxide equivalent (GtCO2e) or about 22 percent of global GHG emissions (Figure ES.2). This is an increase compared to 2019, in which20 percent of global GHGemissions were covered by ETSsand carbon taxes that were implemented orscheduled for implementation.”

“A widerange of public and private sector actors arepushing forward with decarbonization strategiesthrough international cooperation”

“In2019, about 1,600 companiesdisclosed that they currently use internalcarbon pricing or that they anticipate doing sowithin two years.9With an increasing number ofcompanies committing to net zero targets and growinginvestor pressure, the use of internal carbon pricingto reduce supply chain emissions is likely to growin the future”

““Imposing a price on carbonsends a financial signal toinvestors that low-carboninvestments are valuable todayand will be even more valuable in the future.” Philippe Le Houérou, Chief Executive Officer of InternationalFinance Corporation”

“Carbon prices range from less than US$1/tCO2e to US$119/t CO2e, with almost half of the covered emissions priced at less than US$10/tCO2e”

“61 implemented or scheduled, of which 31 are ETSs and 30 are carbon taxes”

Carbon Credits and Australia context today

“Market Advisory Group managing director Raphael Wood said investment in Australian carbon credits was doubling every year, albeit off a low base.

“We are seeing substantial investment as these companies know they will have future liabilities arising under any carbon neutral commitments,” Carbon Market Institute chief executive John Connor said.

He noted private equity firm KKR last year spent about $100 millionbuying into Greencollar, the largest Australian generator of carbon credits,while Woodside and Shell had made similar moves.

“They are recognising what their future climate liabilities will be and also the commitments many companies have made for carbon neutrality," Mr Connor said.”

https://www.theage.com.au/politics/federal/investors-place-australian-bets-on-compulsory-emissions-reductions-20210118-p56uy9.html

Why do companies in countries without carbon pricing buy carbon credits

KKR, Woodside and Shell are not spending 100million for no reason.

I assume and companies/investors’ expectations or current real imposition taxes and tariffs in trade in many jurisdictions if they do not deal with Emissions and available Offsets. Scope 3 may be a major contributing factor to this?

Scope 3 explained US EPA

“Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly impacts in its value chain. Scope 3 emissions include all sources not within an organization’s scope 1 and 2 boundary. The scope 3 emissions for one organization are the scope 1 and 2 emissions of another organization. Scope 3 emissions, also referred to as value chain emissions, often represent the majority of an organization’s total GHG emissions.” “GHG Corporate Protocol, all organizations should quantify scope 1 and 2 emissions when reporting and disclosing GHG emissions, while scope 3 emissions quantification is not required. However, more organizations are reaching into their value chain to understand the full GHG impact of their operations. In addition, because scope 3 emission sources may represent the majority of an organization’s GHG emissions, they often offer emissions reduction opportunities.”

Have a great day
ND