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 C2ES'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.

Air Products and Chemicals

  • 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.

Bank of America

  • Bank of America Merrill Lynch operates an active carbon market services business that provides risk management, market access and liquidity, and strcutured finaces to a variety of corporaye clients looking to offset emissions or manage their carbon exposure. 

  • Bank of America Merrill Lynch, has an option to purchase several million CERs (certified emission reductions) over a 10-year period, all of which will be generated in sub-Saharan Africa. In addition to holding compliance value from their eligibility in the European Union's Emissions Trading System (EU ETS), the carbon credits are “highly charismatic” in that they are earned through the replacement of CO2 producing kerosene lamps with innovative rechargeable light emitting diode (LED) lighting technology - a clean, safe, and environmentally sound solution that is affordable to those without access to the electricity grid. 

  • Bank of America Merrill Lynch facilitated a carbon credit agreement with four Chinese wind farms located in the Shandong, Hebei and the Inner Mongolia provinces of China, owned by Guohua Energy Investment Company, a subsidiary of China Shenhua Energy Company, the largest coal mining enterprise in the country. The wind farms, operational since 2009, have been registered with the United Nations and have the ability to generate more than 1.5 million carbon credits by 2012.

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.

Delta Air Lines, Inc.

  • In 2012, Delta will begin participating in the European Union’s Emissions Trading Scheme (EU ETS). All airlines flying to, from or within the EU will pay CO2 emission allowances for their flights. Aviation will be the second-largest industry covered by these regulations. Delta is the seventh-largest airline (in terms of emissions) subject to the regulations and will be required to either reduce its CO2 emissions or purchase allowances for those emissions. Delta submitted traffic and CO2 emissions reports for 2010 and intends to fully comply with the regulation.

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. 

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.