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CleanTech and Carbon in the Pacific Northwest

CleanTech and Carbon in the Pacific Northwest. Seattle, WA November 8, 2007. Presentation Preview. 1) Environmental Markets Don’t Work without a Legal Framework Oregon’s Bottle Bill in early 1970s Portland vs. Vancouver, WA Carbon Markets Today US vs. Europe and Japan

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CleanTech and Carbon in the Pacific Northwest

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  1. CleanTech and Carbon in the Pacific Northwest Seattle, WA November 8, 2007

  2. Presentation Preview 1) Environmental Markets Don’t Work without a Legal Framework Oregon’s Bottle Bill in early 1970s Portland vs. Vancouver, WA Carbon Markets Today US vs. Europe and Japan 2) Once the rules are set, there are many opportunities. Will describe many concrete opportunities Will describe how EcoSecurities partners with technology providers

  3. The Kyoto Protocol Annex I Non-Annex I Not ratified

  4. Emissions Trading between Annex 1 Countries • Based on historic emissions, each nation is granted a certain number of allowances through a National Allocation Plan. • If Nation A emits less than its total number of allowances (EUAs), it can sell it’s extra credits to Nation B. • This trading can happen between nations or between capped companies.

  5. A CDM project reduces the GHG emissions in the CDM country Emissions Trading between Annex 1 and non-Annex 1 Countries U.N. – approved emissions reductions from a Non–Annex I country can be sold – as CERs -- to an Annex I country Non – Annex I (e.g. Mexico) Annex I (e.g. England) Carbon Credits (CERS) Actual emissions Emission cap Carbon value ($) Buyer Seller

  6. Services &Agriculture 6 Household 15 Power 31 3 24 Refineries Transportation 3 Other Energies 6 Iron & Steel 3 1 8 Cement Other Industry Others The EU ETS and European emissions • The EU ETS sectors (turquoise) currently account for approximately 46% of the emissions of the EU, over 2 billion tonnes of CO2 emissions per year covering approximately 11,000 industrial installations

  7. The Kyoto Protocol Annex I Non-Annex I Not ratified

  8. Origination Implementation Commercialisation Originating CDM Offsets: Selling Non-Annex 1 Credits to Annex 1 Emitters Finance & Accounting / HR / Legal / IT / Marketing / CSR Investment Consulting

  9. EcoMethane Partnership Aguascalientes project, Mexico

  10. N2O from nitric acid plants • EcoSecurities is the largest developer in the world (24 million tonnes from 27 projects)

  11. Other Kinds of Emissions Reduction Projects Landfills Small scale hydropower Agricultural biodigestors Pig waste biodigestors Biomass and waste mgt Industrial energy efficiency Current projects use 18 technologies in 36 countries

  12. Future CleanTech Partnerships • Agricultural methane digesters for bovine and porcine power generation. • Small dimensional wood pelletization for biomass fuel switching. • High tech, GPS-guided precision agriculture. • Satellite-monitored avoided deforestation. • Programmatic energy efficiency. • Transportation.

  13. Implementation Process The project cycle is convoluted, time consuming, and demands specialized skills EcoSecurities implementation team has 64 skilled professionals, working with sophisticated internal tools and systems Experience leads to successful track record of implementation: • 13 new methodologies approved • Approximately 90 Projects Registered – and growing every week EcoSecurities guides projects through this process PIN=Project Idea Note, PDD=Project Design Document, PP=Project Participant, DNA=Designated National Authority, DOE=Designated Operational Entity

  14. Supply considerations - I CDM Risks and Rewards High Risk with binary outcome Even on issuance, ongoing performance risk from project. Requires close relationship with project to maximise projected output CER price Issuance Validation Monitoring Verification Registration Import to EU ETS Production Cost Host country approval

  15. Project A “ secondary” CERs Project B EcoSecurities Net-Portfolio Buyer Project C Project D Delivery Risk Project E Guaranteed Delivery Transaction • EcoSecurities delivers CERs from the portfolio, not specific projects • Delivery risk removed from buyer (firm volume) • EcoSecurities pays liquidated damages in case of non delivery • Utilising portfolio approach and adding value to the transaction • Projects kept in portfolio until final issuance • Sales price dependent on EUA reference price

  16. Recap 1) Environmental Markets Don’t Work without a Legal Framework. 2) Once the rules are set, there are many opportunities. If your technology significantly reduces GHG emissions, contact us.

  17. Thank you.Steve GutmannSenior Commercialisation ManagerEcoSecuritiessteve.gutmann@ecosecurities.com503-333-7564

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