The carbon market has developed continuously during the past 15 years and the rules and methodologies are gradually stricter and more precise. The demand for carbon offsets has increased rapidly over the past two years, backed by carbon neutrality commitments from businesses and corporations. It is expected to continue to increase in the coming years, which will support liquidity and transparency in the carbon offset market.
The carbon offset market is bilateral, highly non-commoditized and thus complex. At World Kinect Energy Services, we purchase directly from the project on our customers’ behalf, spending considerable time scrutinizing our counterparties to ensure credibility for our customers. Our long-term relationships and regular buying from project developers around the globe results in better pricing for our customers. Additionally, our team has well over a decade of experience from the global carbon market and can guide you in which projects are of the highest quality and offer co-benefits. Our offering is set up this way to ensure that we access high quality offsets while at the same time remain competitive from a pricing perspective.
We always recommend starting with actual emissions or other reductions in waste and environmentally destructive by products. However, often companies have already exhausted financially and logistically viable energy efficiency projects. In some instances, the lead time to energy efficiency or improvements in energy or fuel options are lengthy. Companies use carbon offsets as an interim measure whilst they develop other innovations. These initiatives can be costly until they become “business as usual” therefore, carbon offsets are a more economical alternative to manage carbon in the short to medium term.
If you buy certificates linked to authentic projects with a trackable source it is very easy to communicate your position so that it adds to your brand equity, rather than detracts. The market for carbon offsetting can be complex, and therefore, you need someone like World Kinect Energy Services with experience to help you to manage your plan.
We have the experience and networks to link you with the most suitable and genuine projects in the market and all purchases are backed by a cancellation statement from the public carbon offset registries. This provides verifiable proof of the carbon offsets being removed and retired from the market on your behalf. The statement will also confirm the project information provided in our contracts. Most of the income from carbon offsets is used to run the project and ensure emission reductions. For a forestry conservation project, the money will pay for land lease or buying land, salaries to project staff and often it provides additional support to local communities, schools etc. In a wind power project, the money will provide extra income that makes the project more economically viable. A smaller part of the money will also go to project development, administration, and transaction fees as in any standard service delivery.
When it comes to reducing your carbon footprint, World Kinect Energy Services always recommend to first measure and reduce your carbon emissions to the extent that is economically feasible. Ways to reduce emissions include energy efficiency measures, renewable fuels, improving operation systems etc. For your residual emissions, we recommend offsets as a bridging mechanism while waiting for new technology or renewable fuel to become available. Carbon offsetting is the most practical and cost-efficient way to neutralize your residual emissions and shows the market you are taking action which is a much better alternative than doing nothing.
When you buy carbon offsets, make sure to buy offsets that are certified by one of the major standards. We only work with the largest and most credible standards, like Verra and the Gold Standard. These are developed by NGOs and have been in the carbon market for more than 15 years. A project registered under one of these standards has been through a rigorous certification process:
1.The project must be developed in accordance with an approved methodology. The methodologies are very technology specific and are developed by sector experts and subject to public hearings before they are approved.
2. An independent third-party must certify that the project is developed in accordance with the methodology and is eligible for registration. This certification involves an assessment of the project’s additionality; that the project would not have happened without being registered as a carbon offset project. It also certifies that the offsets from the project will only be counted once and that the project will not cause increased emissions elsewhere (“leakage”).
3. If the independent third-party certifies the project, it is submitted for registration to the chosen standard. The standard will then perform its own approval process of the project before it is registered under the standard.
4. When the project has operated for a certain period, e.g., one year, an independent third party must certify the emission reductions that have taken place because of the project. When this has been certified and the standard has approved the certification report, the carbon offsets can be issued to the standard’s registry, which is publicly available.
5. Each carbon offset represents a reduction of one tonne of CO2 and has a traceable serial number.
Many projects have several co-benefits in addition to the emission reductions. These benefits may include support to local hospitals, schools or healthcare, employment opportunities, preservation of biodiversity or improved indoor climate.
What is Additionality? The additionality of a project means that the project would not have happened without being registered as a carbon offset project. To prove the additionality, the project developer must follow a strict procedure that requires documentation to be verified by an independent third-party. The rules for assessing the additionality of a project changes with time, as common practices change, and technologies become more common and less additional in terms of going beyond “business as usual”. That means that a project that was additional some years ago would not necessarily meet the requirements if they were developed today. Our expert carbon team is able to provide guidance and expertise on this and also ensure that all customers feel confident about their choices.
If you are interested in learning more about how your company can become more energy efficient and sustainable through the mechanism of carbon offsets or other emission reductions programs, please contact me to align you with one of our Energy Reduction specialists.
Gates L. Scott - 303.725.6790 - firstname.lastname@example.org
Gates L. Scott
Gates L. Scott is a Senior Land Executive with World Fuel Services developing new markets and delivery fuel management solutions through the Front Range of Colorado and beyond. A former Certified Flight Instructor and commercial helicopter pilot and aviation enthusiast, he loves anything that flies!
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