Financing a Net-Zero Future with Carbon Credit Streaming
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Financing a Net-Zero Future with Carbon Credit Streaming

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The following content is sponsored by Carbon Streaming Corporation.

Financing a Net-Zero Future with Carbon Credit Streaming

The world is advancing towards a net-zero carbon future, but achieving it will require a larger role for carbon credits.

A carbon credit is a tradeable certificate that represents one metric ton of carbon dioxide (CO2) or the CO2 equivalent (CO2e) of another greenhouse gas (GHG) that is prevented from entering the atmosphere or is removed from the atmosphere. Organizations purchase and use these certificates to offset their emissions that are difficult to reduce or control.

This infographic sponsored by Carbon Streaming Corporation explains how the company is funding the fight against climate change by bringing the streaming model—traditionally used in mining and energy—to the growing market for carbon credits.

The Rising Need for Climate Action

Global GHG emissions have risen alongside the expansion of industries and economies.

Since the Industrial Revolution, atmospheric concentrations of CO2 have increased at a rate at least 10 times faster than at any other time during the last 800,000 years. Consequently, global surface temperatures have risen, bringing the world closer to the devastating effects of climate change.

According to the latest United Nations Emissions Gap Report, limiting global temperature rise to 1.5°C requires a 50% reduction in GHG emissions by 2030 relative to current levels. While attaining this goal seems difficult, carbon credits can help get us closer to it.

What are Carbon Credits, and How Can They Help?

Carbon credits are generated by projects that avoid, reduce, or remove CO2e from the atmosphere. These projects include, but are not limited to:

  • Reforestation and forest conservation
  • Renewable energy
  • Carbon capture and storage

For every metric ton of CO2e that a project avoids, reduces, or removes, it generates one carbon credit. Companies buy these carbon credits to offset emissions that are difficult to reduce or control, such as value chain emissions.

The number of companies with net-zero targets has jumped over 200% between 2019 and 2020, up from 500 to 1,565. Carbon credits can help address various gaps on a company’s path to decarbonize, including:

  • Technological Gaps: Companies are limited by current reduction and removal technologies that are available at scale.
  • Time Gaps: Companies will require time to implement plans to reduce their emissions.
  • Cost Gaps: Companies may have emissions that are too expensive to eliminate today.

The Growing Demand for Carbon Credits

As more and more companies turn to carbon credits, the market size of both compliance and voluntary carbon markets is growing.

Compliance markets are regulated by governments to cap emissions for certain industries. Voluntary carbon markets are where carbon credits can be purchased by those that voluntarily want to offset their emissions.

YearVoluntary markets transaction valueCompliance markets transaction value
2017$146M$47B
2018$296M$170B
2019$320M$216B
2020$473M$261B
2021*$748MN/A

*As of Aug. 31, 2021.

Voluntary markets are substantially smaller than compliance markets, with a notable growth runway. Transaction values in voluntary markets have grown five-fold since 2017, and are on track to surpass $1 billion in 2021.

However, the supply of carbon credits in the voluntary markets relies on carbon offset projects, which require funding to be developed. These funds can be difficult to obtain before buyers purchase the carbon credits generated by the project. Carbon Streaming is able to provide this capital with its unique streaming model, bridging the gap in funding until credits are available for sale.

How the Carbon Streaming Model Works

The Carbon Streaming model functions in two simple steps. It involves an upfront payment from Carbon Streaming to a project developer, who then provides a stream of high-quality carbon credits in the future.

  1. Upfront payment to project developer: Carbon Streaming makes an upfront payment for the right to purchase future carbon credits.
  2. Stream of carbon credits: Carbon Streaming makes ongoing delivery payments and receives a stream of carbon credits generated by the project.

Carbon Streaming’s ability to access capital markets to raise low-cost capital provides it with a competitive advantage. The Carbon Streaming model allows the alignment of the strategic interests of Carbon Streaming and the project developer with both of them receiving multiple benefits.

Carbon Streaming acts as both:

  • A long-term partner with project developers
  • A trusted partner for buyers of high-quality carbon credits

Carbon Streaming provides impact investors with exposure to rising carbon prices while also financing projects that help achieve decarbonization and sustainability goals.

Carbon Streaming for a Cleaner Future

As the world shifts towards a net-zero carbon future, carbon credits will play a key role in helping countries and companies achieve their climate goals.

Carbon Streaming is funding the fight against climate change with its unique streaming model—an investment opportunity with several benefits for investors and the environment.

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Ranked: Emissions per Capita of the Top 30 U.S. Investor-Owned Utilities

Roughly 25% of all GHG emissions come from electricity production. See how the top 30 IOUs rank by emissions per capita.

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Emissions per Capita of the Top 30 U.S. Investor-Owned Utilities

Approximately 25% of all U.S. greenhouse gas emissions (GHG) come from electricity generation.

Subsequently, this means investor-owned utilities (IOUs) will have a crucial role to play around carbon reduction initiatives. This is particularly true for the top 30 IOUs, where almost 75% of utility customers get their electricity from.

This infographic from the National Public Utilities Council ranks the largest IOUs by emissions per capita. By accounting for the varying customer bases they serve, we get a more accurate look at their green energy practices. Here’s how they line up.

Per Capita Rankings

The emissions per capita rankings for the top 30 investor-owned utilities have large disparities from one another.

Totals range from a high of 25.8 tons of CO2 per customer annually to a low of 0.5 tons.

UtilityEmissions Per Capita (CO2 tons per year)Total Emissions (M)
TransAlta25.816.3
Vistra22.497.0
OGE Energy21.518.2
AES Corporation19.849.9
Southern Company18.077.8
Evergy14.623.6
Alliant Energy14.414.1
DTE Energy14.229.0
Berkshire Hathaway Energy14.057.2
Entergy13.840.5
WEC Energy13.522.2
Ameren12.831.6
Duke Energy12.096.6
Xcel Energy11.943.3
Dominion Energy11.037.8
Emera11.016.6
PNM Resources10.55.6
PPL Corporation10.428.7
American Electric Power9.250.9
Consumers Energy8.716.1
NRG Energy8.229.8
Florida Power and Light8.041.0
Portland General Electric7.66.9
Fortis Inc.6.112.6
Avangrid5.111.6
PSEG3.99.0
Exelon3.834.0
Consolidated Edison1.66.3
Pacific Gas and Electric0.52.6
Next Era Energy Resources01.1

PNM Resources data is from 2019, all other data is as of 2020

Let’s start by looking at the higher scoring IOUs.

TransAlta

TransAlta emits 25.8 tons of CO2 emissions per customer, the largest of any utility on a per capita basis. Altogether, the company’s 630,000 customers emit 16.3 million metric tons. On a recent earnings call, its management discussed clear intent to phase out coal and grow their renewables mix by doubling their renewables fleet. And so far it appears they’ve been making good on their promise, having shut down the Canadian Highvale coal mine recently.

Vistra

Vistra had the highest total emissions at 97 million tons of CO2 per year and is almost exclusively a coal and gas generator. However, the company announced plans for 60% reductions in CO2 emissions by 2030 and is striving to be carbon neutral by 2050. As the highest total emitter, this transition would make a noticeable impact on total utility emissions if successful.

Currently, based on their 4.3 million customers, Vistra sees per capita emissions of 22.4 tons a year. The utility is a key electricity provider for Texas, ad here’s how their electricity mix compares to that of the state as a whole:

Energy SourceVistraState of Texas
Gas63%52%
Coal29%15%
Nuclear6%9%
Renewables1%24%
Oil1%0%

Despite their ambitious green energy pledges, for now only 1% of Vistra’s electricity comes from renewables compared to 24% for Texas, where wind energy is prospering.

Based on those scores, the average customer from some of the highest emitting utility groups emit about the same as a customer from each of the bottom seven, who clearly have greener energy practices. Let’s take a closer look at emissions for some of the bottom scoring entities.

Utilities With The Greenest Energy Practices

Groups with the lowest carbon emission scores are in many ways leaders on the path towards a greener future.

Exelon

Exelon emits only 3.8 tons of CO2 emissions per capita annually and is one of the top clean power generators across the Americas. In the last decade they’ve reduced their GHG emissions by 18 million metric tons, and have recently teamed up with the state of Illinois through the Clean Energy Jobs Act. Through this, Exelon will receive $700 million in subsidies as it phases out coal and gas plants to meet 2030 and 2045 targets.

Consolidated Edison

Consolidated Edison serves nearly 4 million customers with a large chunk coming from New York state. Altogether, they emit 1.6 tons of CO2 emissions per capita from their electricity generation.

The utility group is making notable strides towards a sustainable future by expanding its renewable projects and testing higher capacity limits. In addition, they are often praised for their financial management and carry the title of dividend aristocrat, having increased their dividend for 47 years and counting. In fact, this is the longest out of any utility company in the S&P 500.

A Sustainable Tomorrow

Altogether, utilities will have a pivotal role to play in decarbonization efforts. This is particularly true for the top 30 U.S. IOUs, who serve millions of Americans.

Ultimately, this means a unique moment for utilities is emerging. As the transition toward cleaner energy continues and various groups push to achieve their goals, all eyes will be on utilities to deliver.

The National Public Utilities Council is the go-to resource to learn how utilities can lead in the path towards decarbonization.

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The Road to Decarbonization: How Asphalt is Affecting the Planet

The U.S. alone generates ∼12 million tons of asphalt shingles tear-off waste and installation scrap every year and more than 90% of it is dumped into landfills.

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Road to Decarbonization - How Asphalt is Affecting the Planet

The Road to Decarbonization: How Asphalt is Affecting the Planet

Asphalt, also known as bitumen, has various applications in the modern economy, with annual demand reaching 110 million tons globally.

Until the 20th century, natural asphalt made from decomposed plants accounted for the majority of asphalt production. Today, most asphalt is refined from crude oil.

This graphic, sponsored by Northstar Clean Technologies, shows how new technologies to reuse and recycle asphalt can help protect the environment.

The Impact of Climate Change

Pollution from vehicles is expected to decline as electric vehicles replace internal combustion engines.

But pollution from asphalt could actually increase in the next decades because of rising temperatures in some parts of the Earth. When subjected to extreme temperatures, asphalt releases harmful greenhouse gases (GHG) into the atmosphere.

Emissions from Road Construction (Source) CO2 equivalent (%)
Asphalt 28%
Concrete18%
Excavators and Haulers16%
Trucks13%
Crushing Plant 10%
Galvanized Steel 6%
Reinforced Steel6%
Plastic Piping 2%
Geotextile1%

Asphalt paved surfaces and roofs make up approximately 45% and 20% of surfaces in U.S. cities, respectively. Furthermore, 75% of single-family detached homes in Canada and the U.S. have asphalt shingles on their roofs.

Reducing the Environmental Impact of Asphalt

Similar to roads, asphalt shingles have oil as the primary component, which is especially harmful to the environment.

Shingles do not decompose or biodegrade. The U.S. alone generates ∼12 million tons of asphalt shingles tear-off waste and installation scrap every year and more than 90% of it is dumped into landfills, the equivalent of 20 million barrels of oil.

But most of it can be reused, rather than taking up valuable landfill space.

Using technology, the primary components in shingles can be repurposed into liquid asphalt, aggregate, and fiber, for use in road construction, embankments, and new shingles.

Providing the construction industry with clean, sustainable processing solutions is also a big business opportunity. Canada alone is a $1.3 billion market for recovering and reprocessing shingles.

Northstar Clean Technologies is the only public company that repurposes 99% of asphalt shingles components that otherwise go to landfills.

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