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Emissions Trading and Offsets

Emissions Trading, JI, & CDM Solutions

The following is a brief overview of emissions trading, joint implementation and CDM solutions undertaken by members of The Pew Center's Business Environmental Leadership Council (BELC).

For more information on each of these companies efforts to address climate change, please see the Businesses Leading The Way section of this Web site.

ABB

  • ABB has built power plants in Costa Rica through a mutually beneficial climate improvement project as part of a Norwegian consortium.  The project could avoid an estimated 4 million tons of CO2 emissions over a 20-year period.  Any CO2 credits earned by Costa Rica could then be sold to Norwegian companies or other buyers.

  • ABB participates in an Activities Implemented Jointly (AIJ) reforestation and forest conservation project in Costa Rica that will sequester an estimated net 230,800 metric tons of carbon over its 25-year lifetime.

  • ABB funds and manages the China Energy Technology Program, a two-year project evaluating the costs and environmental impacts of various technological options to provide sustainable electricity generation in the Shandong Province of China.

Air Products

  • Air Products and Chemicals, Inc. is involved in all stages of development of EU regulations, country-based voluntary greenhouse gas reduction schemes within the EU, and energy tax incentive regulations such as the Dutch ‘convenant’ system and UK Climate Change levy.

  • Air Products and Chemicals, Inc. participates in national and international trade associations to ensure progress can be made in addressing climate change and sustaining economic growth by adopting reasonable government policies and programs that do not impede the free market’s ability to develop cost-effective solutions.

  • Air Products has actively followed various emissions trading mechanisms and recently executed its first purchase of CO2 credits for an operation in the UK.

 

American Electric Power

  • American Electric Power is part of a collaborative GHG mitigation pilot project with the Government of Bolivia, The Nature Conservancy, and the Bolivian Friends of Nature Foundation. The Noel Kempff Mercado Climate Action Project will protect nearly 4 million acres of threatened forest and offset 5 to 7 million tons of carbon over 30 years.

  • AEP is a partner in the Guaraqueçaba Climate Action Project, which seeks to restore and protect nearly 20,000 acres of partially degraded and/or deforested land in the tropical Atlantic rainforest of Brazil. The Project is expected to offset approximately 1 million metric tons of carbon over 40 years.

  • AEP is a member of e7, a consortium of nine of the world’s leading electric companies from G7 countries. e7 promotes sustainable energy projects through a "learn by doing" approach on electricity-related issues in developing countries with host countries, UN agencies, NGOs, and local energy providers. e7 also works to develop human capacity building—an example being its Micro-Solar Distance Learning Program, which focuses on electrification for information and telecommunications needs using photovoltaics. AEP serves as the U.S. delegate to the e7 and has undertaken the project leadership for an e7 effort to install wind turbines on environmentally sensitive San Cristobal Island in the Galapagos. This project may be eligible for certification under the CDM.

  • AEP has led the creation of Global 3E, a charitable organization designed to attract $60 million in private contributions from the philanthropic sector in two years. Global 3E will provide zero interest loans for electricity-related humanitarian projects in developing nations.

  • AEP is a founding and active member of the  Chicago Climate Exchange (CCX). Through CCX, AEP has made legally binding commitments to reduce its GHG emissions by four percent below the average of its 1998 to 2001 baseline by 2006.


Baxter

  • Baxter has joined the Chicago Climate Exchange, a group of organizations including the City of Chicago and Mexico City, to pilot a voluntary carbon trading system focused on reducing absolute aggregated group greenhouse gas emissions a certain amount over a period of time.  

BP

  • BP believes that the use of flexible market mechanisms, such as emissions trading and the CDM, provide a cost-effective means of reducing greenhouse gas emissions.  BP operated an internal emissions trading system between 1999 and 2001 that helped reduce operational GHG emissions by 10%.  The system covered all BP operations across the globe and provided a number of insights and learning.

  • BP’s UK Upstream and Petrochemicals assets are now part of the UK Government ’s emissions trading scheme (ETS). BP carried out the first trades in the UK ETS and has also helped customers trade in the market. BP is currently applying the evolving Clean Development Mechanism (CDM) rules and proced ures to a BP solar project in Brazil, with the intention of registering the project with the CDM Executive Board. BP is currently piloting CDM projects for a range of technologies.

  • BP is currently applying the evolving CDM rules and procedures to a real BP solar project in Brazil, with the intention of registering the project with the CDM Executive Board.  BP is currently piloting CDM projects for a range of technologies and believe clear accounting principles need to be created and internationally agreed, for the use of CER’s and other types of GHG emission reduction credits, to realise value from lower carbon technologies and for compliance use in meeting mandated and voluntary GHG emission caps.  

  • BP will continue to take part in wider industry and stakeholder alliances and to share our experience with flexible mechanisms since 1997 in order to aid the development of national and regional systems.


Cinergy

  • Cinergy Corp. is working with other industries and organizations to pilot emissions trading systems, and through its subsidiary company United States Energy Bio-gas has completed the trading of carbon equivalent offsets with a Canadian company.

  • Cinergy Corp. is a partner in the Rio Bravo Carbon Sequestration project to protect 65,000 acres of endangered rainforest in Belize.  The project combines land acquisition and a sustainable forestry program and is expected to sequester approximately 2.4 million metric tons of carbon over 40 years.  Cinergy, The Nature Conservancy, and the Belize Government entered into an agreement to transfer the carbon offsets from the project to Cinergy Corp.  The agreement was reviewed and approved by U.S. Initiative on Joint Implementation (USIJI).


DTE Energy

  • DTE Energy, along with other partners, is involved in the Rio Bravo Carbon Sequestration Project to protect 65,000 acres of endangered rainforest in Belize.  The project combines land acquisition and sustainable forestry and is expected to sequester approximately 2.4 million metric tons of carbon over 40 years.


Dupont

  • DuPont has been active in working with others to pilot emissions trading systems and has concluded a number of trades through the use of bi-lateral agreements and on the emerging carbon exchanges.  DuPont is a member of the Chicago Climate Exchange and the International Emissions Trading Association.  In the winter of 2002, DuPont donated 120,000 tons of CO2-equivalent emissions credits to the Salt Lake City Organizing Committee. This allowed the Winter Olympics to offset their emissions and be declared "climate neutral." 


Entergy

  • Entergy and Elsam, the largest Danish electricity supplier, executed an international trade in CO2 allowances under the Danish climate change program.  Under the transaction, Entergy purchased 10,000 Danish allowances from Elsam and will remove the allowances from the market, eliminating 10,000 metric tons of CO2 emissions. 

Interface, Inc.

  • Interface, Inc. joined the Chicago Climate Exchange (CCX) in November 2004.  They were the first and only company in the commercial interiors industry to do so. Through CCX, Interface is actively quantifying, tracking and reporting the GHG emissions associated with the manufacture of its products (carpet and fabric) in the United States and Canada.

  • Interface has committed to decrease its absolute GHG emissions by 1% per year through 2006, using the period from 1998-2001 as a baseline, and Interface’s North American business units have committed to support emerging markets for GHG emissions trading in North America.

  • Interface purchases a range of carbon offsets to support its Cool Carpet™ program, enabling their customers to purchase “climate neutral” flooring products.  The emission reduction credits associated with Interface’s Cool Carpet products offset the full product life cycle—raw material extraction to end-of-life.

Ontario Power Generation

  • Ontario Power Generation (OPG) and PG&E’s subsidiary US Gen New England (US Gen) successfully completed a GHG emissions trade in April 2000. US Gen sold OPG 1 million metric tons of CO2 equivalent emissions reductions generated by capturing and destroying methane that would otherwise be emitted from the Johnston Landfill in Rhode Island from 1998-2000. OPG has committed to have all of its emissions reduction purchases, such as this one, verified by the Ontario, Canada Pilot Emissions Trading Project (PERT) and report them to Canada’s Climate Change Voluntary Challenge and Registry (VCR) Inc., where they are transferred and retired.

  • Ontario Power Generation has registered 1.8 million metric tons of CO2 emission reduction credits produced by its in-house energy efficiency program.  OPG also purchased emission reduction credits equal to approximately 10 million metric tons of CO2 to meet its voluntary 26 million metric ton emissions target for the year 2000.  The purchased emissions resulted from a variety of offset activities, including carbon sequestration in forests and agricultural lands, power generation from biomass, livestock waste methane abatement, and the extraction of CO2 from natural gas.

  • OPG is part of the e7, a consortium of nine of the world’s leading electric companies from G7 countries. e7 promotes sustainable energy projects through a "learn by doing" approach on electricity-related issues in developing countries with host countries, UN agencies, NGOs, and local energy providers. e7 also works to develop human capacity building— an example being its Micro-Solar Distance Learning Program, which focuses on electrification for information and telecommunications needs using photovoltaics.

  • Ontario Power Generation met its year 2000 net GHG emission target by offsetting almost 33 percent of its greenhouse gas emissions with emission reduction credits. Of these, 2.3 million metric tons were generated from internal energy efficiency improvements. The remaining credits were purchased from sources in North America and internationally. OPG has also transferred the 12.6 million metric tons CO2 equivalent emission reduction credits to Canada’s Climate Change Voluntary Challenge and Registry Inc. for retirement.


Royal Dutch/Shell

  • Royal Dutch/Shell Group developed and used a pilot internal emissions trading system (STEPS) to gain experience and understanding in the use of and structure for emissions trading. The system, which ran from 2000 to 2002, allowed trading between a number of Group entities located in Annex 1 countries. The system covered over 33 million metric tons of CO2e from over 22 separate sites, accounting for almost two-thirds of Shell's developed country emissions or over one-third of its global emissions.

  • Shell has shifted emphasis from internal mechanisms to real external instruments and has established an Environmental Products Trading Business (EPTB). The Shell Group has entered the UK Emissions Trading System, and as a result, key Shell UK upstream production facilities now have a GHG emissions cap. Shell Trading, with Nuon, executed the first trade in EU CO2 allowances in February 2003.

  • The EPTB is also actively developing a CDM business for the Group.


TransAlta

  • In August of 2004, TransAlta announced the purchase of 1.75 million tonnes of GHG candidate Certified Emission Reductions (CERs) from the Chilean agricultural company Agrosuper.  The purchase requires the registration of the project with the Clean Development Mechanism Executive Board.  Once completed, this agreement will represent the first Canadian purchase of CERs under the Kyoto Protocol. 

  • TransAlta develops and trades for approximately 4 million tons of CO2 equivalent per year in offset projects, with 80 million tons currently under contract.  Offset projects include gas recovery, energy efficiency, ruminant methane, landfill and coal mine gas to electricity, forestry, and soil sequestration, among others.  In a recent upgrade of its U.S. operations, TransAlta reduced its CO2 emissions by an amount equal to the annual emissions of 27,800 cars, and sold the resulting credits to a U.S. integrated oil company.

  • TransAlta contributes to the development of a greenhouse gas emissions reduction market by engaging in selling fractions of its portfolio. 

Wisconsin Energy Corporation

  • Wisconsin Energy participates in a project that involves fuel-switching (coal to natural gas), cogeneration, and efficiency improvements to a district heating plant in the City of Decin, Czech Republic. This project has improved local air quality, reduced greenhouse gas and other emissions, and provided educational opportunities and experience for other communities interested in improving air quality. 

Whirpool

  • Whirlpool, in cooperation with government agencies, utilities, NGOs, and manufacturers, has a program to encourage the early retirement of inefficient appliances in Brazil.  This program can potentially avoid more than 3 million tons of CO2 emissions each year.