Category: Carbon Markets

IFC Seeds Blockchain Fund for Carbon Offsets

Source: South Pole

Key Points: The International Finance Corporation’s sponsorship of blockchain-based offsets in its new Carbon Opportunities Fund has potential to be an important catalyst for nature-based offset voluntary market growth. The Fund is stressing its project selection and MRV processes to provide reassurance to offset and blockchain skeptics.

Sponsoring new tokenized carbon offsets. Last week, the International Finance Corporation (IFC), a member of the World Bank Group, announced it would sponsor development of the Carbon Opportunities Fund (the Fund). The Fund will invest in carbon offset credits that are to be tokenized for sale through blockchain. It has teamed up with Cultivo, which builds portfolios of “natural capital” and will identify the projects; Aspiration, a fintech that will be one of the anchor investors along with the IFC; and Chia, which is providing the blockchain for the World Bank’s Climate Warehouse that will track the tokenized credits.

Continuation of endorsement of carbon markets and the potential of blockchain. The IFC’s funding of this initiative appears consistent with previous efforts to support carbon markets, including using blockchain. The World Bank introduced the Climate Warehouse in 2019, piloting the linking of registry systems using blockchain to store information (the pilot included Chile and Japan and used Verra-registered projects). This integration of the Warehouse into the Fund comes at a time in which the tokenization of carbon offsets has been criticized for facilitating the sale of lower quality projects; the Fund’s “closed system” with curated projects seeks to obviate that concern.

The Fund could prove one of the more successful Blended Finance efforts. The World Bank has embraced a number of Results-Based Finance efforts but, like its more general development initiatives, they frequently do not spur much Western private capital co-investment. Instead, the World Bank and other development institutions seek to create a heralded “multiplying effect” by de-risking projects, in which private capital vastly supplements the amount of money the government-backed institutions have invested. The Fund reflects an example of a different type of de-risking — in this case of carbon offset project quality — which is similarly intended to spur much more private capital to co-invest.

Resources to develop quality projects and Measurement, Reporting and Verification (MRV). Recognizing the reputational challenges to carbon offsets/emissions reduction credits, the World Bank’s efforts have included developing local capability to develop projects and implement MRV systems. For example, $0.4B of the $1.3 Billion raised in the World Bank’s Forest Carbon Partnership Facility is dedicated to “The PCPF Readiness Fund,” which works with countries to develop reference emissions levels, MRV systems and management arrangements. The World Bank further is looking to implement digital MRV in order to help “expand the use of smart sensors, satellites and drones, cloud computing, artificial intelligence, and blockchain encryption.”

8/25/2022

Addressing Impermanence Risk in the Voluntary Carbon Market

California Carbon Buffer Pool and Estimated Reversals

Source: CarbonPlan

Key Points: A new study of CA’s “insurance” for its carbon offsets highlights the rising risk for nature-based offsets of re-releasing CO2. This can help inform ICVCM’s recently launched push for higher standards in voluntary markets. It also supports our proposed “point” system for corporate disclosures, which devalues offsets, in part, on impermanence risk.

Study warns 100-year buffer to compensate for carbon reversal risks may be inadequate, particularly as a result of climate change. A CarbonPlan study released in early August concludes that California’s “insurance”, or buffer pool, of forest-project carbon offsets is not nearly large enough. The buffer pool is designed to compensate for release of CO2 back into the atmosphere (i.e., “reversal”) from the premature (< 100 years) demise of forests. The study’s assessment of each of the four categories of risk for which the buffer seeks to compensate (see Exhibit) varies in empiricism, yet it highlights the vulnerabilities of nature-based offsets to reversal. Climate change is exacerbating the natural and perhaps the financial and management risks. Please see summary comments of the study further down.

Integrity Council on Voluntary Carbon Markets (ICVCM) issues draft principles and protocols; ensuring adequate buffers for reversal risk is one element. In late July, the ICVCM issued its draft Core Carbon Principles and Assessment Framework and Procedures along with initiating a 60-day public consultation period. One of the 10 Core Carbon Principles is that the carbon storage must be either “permanent” or have measures in place to fully compensate if the offset is reversed prematurely. The Council accepts the use of buffer pools as an insurance mechanism for reversal; it simply notes that whatever mechanism must be robust enough (e.g. must have enough credits in the buffer pool) to fully compensate for it.

ICVCM sees a role for rating agencies and rating offsets; the Sustainable Finance Lab recommends taking it one step further. Separately, in its introduction of the public consultation period, the ICVCM welcomed the participation of public ratings agencies — and ratings for offset projects — to promote transparency. As the Sustainable Finance Lab has opined, we support taking a carbon offset rating system one step further. For the purposes of corporate reporting of offset purchases, we recommend allotting different amounts of “credit” per ton of CO2-equivalent based on each offset project’s rating. (The range of values could be 0-1, with a score of 1 reserved for permanent removal technologies; a project’s rating could be influenced by how conservatively offsets are created or the extent to which the offsets are reserved, similar to a buffer pool.) Thus, corporations buying offsets for the purposes of meeting decarbonization targets could only report an offset “value” commensurate with the independently-assessed climate (decarbonization) benefit.

CarbonPlan Study’s Buffer Pool analysis details. The buffer in the California forest offsets program (part of its Compliance Offset Program, see below) is comprised of offset “set-asides” — a portion of the offsets generated from forest management projects (which can actually come from across the U.S.). In different ways, the study concludes and/or warns that these reserves across the four categories of buffer pool offsets are either already “used up” or at risk:

• Wildfires (19% of buffer pool). Since 2015 in California have likely already depleted the formal allotment of offsets to the Wildfire category (the blue section in the exhibit). Thus, the buffer that was intended to last 100 years appears to have been depleted in less than 10 (see blue bars in the Exhibit).
• Disease & Insects (18%). The study estimates that even a single forest disease, “sudden oak death”, could result in enough tree mortality to use up more than the allotted offset buffer for the whole Disease & Insect category (orange bars).
• Other (18%). The Other category is intended to include damage due to wind, flood, and ice. Yet the study notes that drought may prove to be more severely damaging (grey bar).
• Financial & Management (44%). This relates to the non-natural risks to ongoing forest preservation/management, such as change in ownership. The study does not quantitatively assess if the allotment is adequate. Rather it notes that bankruptcy can discharge the liability for failing to perform and that separate studies of 100-year default probability point to higher rates of bankruptcy than is presumably provisioned for in the pool (yellow bar).

Background on the role of forest carbon offsets in California’s Cap-and-Trade program. In the California Cap-and-Trade Regulation that sets declining limits on Greenhouse Gas emissions for the state, the Compliance Offset Program offers use of carbon offset purchases to help entities meet a small portion (currently up to 4%) of their emissions obligations. Forests are one of six approved project areas for the Carbon Offset Program; the other project types are ozone depleting substances, livestock, mine methane capture, rice cultivation and urban forests.

8/8/2022

Benchmark Introduced for Voluntary Carbon Offset Credits

Stylized Construction of the GER Over Time

Source: NetZero Markets

Key Points: An effort to bring liquidity and transparency to voluntary carbon offset credits, known as the GER, was introduced June 17. The GER is a composite and as such, creates a way for a company to easily buy offsets that are “as good as industry average” over time; it doesn’t address criticisms about offset quality.

Introducing the Global Emission Reduction (GER) contract. A GER is a composite instrument, comprised of a weighted average of four “buckets” of offset credit types currently traded on Voluntary Carbon Markets (VCMs):

• Base Carbon Credit (BCC); emissions avoidance, consisting of renewables and energy efficiency projects
• Forestry Carbon Credit (FCC); emissions avoidance, consisting of Land Use, Land Use Change and Forestry projects
• Prime Carbon Credit (PCC); emissions avoidance, with projects that have other benefits such as contributing to the UN’s Sustainable Development Goals
• Carbon Capture Credit (CCC); emissions removal, to include CCS and Direct Air Capture projects

Recent trading in VCMs have demonstrated differentiation by price across these project buckets, with CCCs the most expensive and BCCs the least. Early trading in GERs settled at $7.23 to $7.70 per contract.

The GER functions as follows: carbon credits representing each of the four buckets are bought and “retired” — retiring credits ensures that the carbon benefit is only “used” once and cannot be resold. A GER is then issued as a new instrument underpinned by those retired credits. The details of contributing credits (i.e. the projects) are transparent to buyers, addressing a criticism regarding the opacity of current VCMs.

The representation in a GER from each of the four buckets is based on the volume of trading in each over time. Thus, GERs intend to reflect the market and reflect “an average” offset. Currently, the GER’s mix is approximately 45% BCC, 1/3 FCC, 20% PCC and 1% CCC (see Exhibit).

As an intended industry benchmark, a GER does not have its own inclusion standards for projects and instead accepts all established verifying agency practices and all offset types that are currently traded. (This differs from some others’ products, which seek to offer a portfolio of higher quality offsets, see discussion about quality in the explainer below.)

­­­Over time, GER mix is expected to first include more FCC and gradually, as removal activity grows, to be entirely comprised of CCC (see Exhibit) (again this reflects how the offset markets are expected to evolve). This transition to all CCC is consistent with the Oxford Principles for Net Zero Aligned Carbon Offsetting, which excludes emission avoidance offsets by 2050.

The GER contracts are being administered by NetZero Markets, which has partnered with exchanges AirCarbon Exchange (for spot contracts) and European Energy Exchange (EEX) and Nodal (both for futures contracts).

Carbon offset credits explained. A carbon credit offset is a certificate that one ton of CO2 is not being emitted to the atmosphere. The certificate is issued by a verifying agency for approved types of projects that conform to established practices. The certificates can then be sold to buyers seeking to offset their own carbon emissions to meet emission reduction goals. Proceeds from the sale of the offsets go to the project developer to help provide financial incentive for the project (as well as to market makers). As suggested above, the most common project types include those related to construction of renewable energy and investments in energy efficiency and land use (such as preserving forests such that they continue to absorb CO2).

Carbon offsets have been criticized for exaggerated claims of contributing to climate mitigation. A key feature of this criticism is an idea known as “additionality.” If a project works on its own economic merits, then that project should not qualify for carbon offset credits because the project developer would have executed on the project anyway. One example of this is developing solar or wind-based energy; since the cost of generating electricity with RE is often lower than that of generating it with fossil fuels, such projects make economic sense and thus shouldn’t also receive support from offset credits.

A separate criticism is that carbon offsets hinder global carbon emissions reduction efforts. This stems from the view that offsets are a cheaper and easier way for corporations to represent that they have lowered their carbon footprint vs. changing (investing in) their own operations. Emerging best practices encourage that companies only use offsets to address the portion of emissions that they cannot reduce “organically” (i.e. by their own actions).

6/25/2022

Voluntary Carbon Markets’ Uneasy Start With Blockchain

Retirement Demand 4Q21-1Q22 for Verra Project Credits, by Year (Millions of Tonnes)

Source: Carbon Direct (data from the Berkely Voluntary Registry Offsets Database)

Key Points: A new report, from Carbon Direct, concludes that blockchain-based buying of carbon offsets has had lower quality standards than traditional buyers (i.e. corporates), which bear more direct reputational risk. Meanwhile Verra is seeking to ensure transparency and bolster the perceived climate integrity of Blockchain tokens.

Blockchain-based demand emerges as relevant portion of traded credits. Per Carbon Direct, which analyzed trades on the Verified Carbon Standard (VCS) registry, Blockchain-based (digital) purchases accounted for 29% of the carbon credits that were retired in the six months of 4Q21-1Q22. (Note that Blockchain-based trades were a much smaller share of the total market as approximately 70% of trades in 2021 on the VCS registry were not retired. Non-retirement purchases are motivated by brokers, investor/speculators and corporates purchasing for planned commitments.)

Blockchain-traded credits perceived to be of lower quality. Versus traditional buyers, the mix of credits purchased digitally on the VCS over that six month period skewed to more renewable energy credits — 64% in the digital pool vs. 37% in the traditional — and to older credits — modes of 2009 and 2013 in the digital pool vs. 2015 and 2019 in the traditional (see chart).

Renewable Energy project-based credits have been criticized for often not being “additional,” as in the projects would have been viable economically without the credits and thus there was no additional climate benefit. Verra, the verifying agency behind VCS, for example, spoke to this issue when, in 2019, it limited credits for Renewable Energy projects to least-developed countries. Related to some degree, older projects are viewed as often having lower standards than newer ones.

Report argues that blockchain can be less discriminating. Carbon Direct argues that blockchain fosters “a willingness to commingle carbon sourced from a wide spectrum of project types” and that token holders have the incentive to grow and that there are “few restrictions on accepted credit project types.” By implication, corporates may feel more scrutinized in the nature of the credits they buy, and thus Carbon Direct implies some hope that (some of the) lower quality credits would not have been purchased. That said, corporates do not face regulatory constraints, nor is it mandated that they provide detail about the purchases, and as such develop their own sense of constraint based on perceived reputational risk.

Verra puts a restriction on; will seek public comment on working in other ways with crypto. In late May, Verra announced that it will prohibit the creation of tokens based on retired credits, an apparent move to shore up perceptions of integrity (so there aren’t two payments tied to one environmental benefit). It also indicated that it will engage in public consultation for its ongoing interaction with blockchain-based transactions, including to ensure adequate traceability and transparency.

Details about the VCS registry and Toucan Protocol. The Toucan Protocol “bridges” VCS credits to Blockchain, where the credit forms the basis for a fungible token. When users bridge these credits, they are retired on the VCS registry. Toucan, which launched in October 2021, comprised 94% of “on-chain” purchasing on the VCS registry in 4Q21-1Q22.

6/7/2022

Price Trend by Type of Carbon credit, 1Q21 – 1Q22

Source: S&P Global via The World Bank (Report: State and Trends of Carbon Pricing, published May 2022)

Key points: The World Bank’s carbon pricing report includes an update on voluntary carbon markets (VCMs). Price differentiation of carbon offset credits shows preference for carbon removal activities. Demand for nature-based credits is also benefitting from buyers’ focus on co-benefits; and growing demand and market maturity bode well for higher prices.

World Bank report on Carbon Pricing. The World Bank (WB)’s State and Trends of Carbon Pricing report published this week includes discussion of global carbon pricing instruments, both taxes and trading systems, and the outlook and implications of new policy and agreements coming out of COP26. Among the key takeaways from the report is that global carbon pricing revenue increased 60% in 2021 to US$84 Billion, with emissions trading systems generating more than carbon taxes for the first time. The report also includes a review of voluntary carbon market trends, prospects and issues related to future growth.

Nature-based credits dominate VCM value in 2021. As noted in a previous Payne Financial Flow, Forestry and Land-Use credits comprised nearly 80% of the estimated US$1+ Billion VCMs’ value in 2021 (data as compiled by EcoSystems Marketplace remains unfinalized; our estimate reflects compiled data through November). This category of nature-based credits is largely comprised of projects to avoid deforestation, but includes some removal-type projects as well including afforestation, carbon sequestration in agriculture and improved forest management. The WB report notes that as demand grows overall, as there are more buyers adopting decarbonization targets and relying on offsets to meet milestones, some of these buyers are putting value on co-benefits of projects. Co-benefits can include achieving one or more of the Sustainable Development Goals.

However, removal-based credits command a higher price. The WB report cites S&P Global analysis pointing to removal-based credits trading at 2.5x the average price of reduction/avoidance-based credits in 4Q21-1Q22 (see chart). This stronger price appears to reflect buyers’ (1) desire to comply with Net Zero strategies (i.e. buyers view that credits related to projects that (only) avoid emissions don’t offset their internally-generated emissions) and (2) views of the potential for removal technologies. Removal technologies also avoid, as the WB report puts it, the  “polarized debates regarding additionality, permanence and baseline accuracy” of Forest and Land-Use credits.

Further, removal-based credits are in short supply, in part because of the non-commercialized state of removal technology (such as Direct Air Capture) and slow development of sequestration projects. Financial sponsorship of removal technologies is also happening outside of marketplaces and rather through direct investment.

Market maturity points to greater liquidity. The report notes several signs that VCMs are maturing, including that (1) financial actors are stepping in to provide capital and to hedge risk, (2) standardized transactions are growing more common and (3) there are signs of speculative (i.e. non-strategic) buying. The report also notes the role that Blockchain is starting to play in tokenization of carbon credits to increase buyer access and highlights the potential issues this creates related to integrity (see here for a brief review of technology’s role in spurring greater environmental investment).

Regulator Declines to “Bless” Certified Natural Gas Given Varying Standards

Expected Daily Volume of Responsibly-Sourced/Certified Natural Gas by Basin, End-2022e
Source: S&P Global

Key Points: The FERC’s recent rejection of Tennessee Gas Pipeline’s proposal to sell responsibly sourced/certified natural gas highlights the value in establishing (robust) measurement standards. Market-wise, TGP’s more recent proposal, which allows unbundling certification from the product, makes more sense than the company’s original physical (hub)-based plan.

The FERC rejects proposal to sell responsibly sourced gas. At the end of April, the Federal Energy Regulatory Commission (FERC) rejected Kinder Morgan subsidiary Tennessee Gas Pipeline (TGP)’s proposal to sell natural gas that is below a threshold for methane intensity. The FERC begged off taking responsibility for what constitutes so-called responsibly-sourced gas (RSG), noting that the market was nascent, that different standards were being set by different independent vendors and that methane emissions are unregulated (see more below).

Evolution of TGP’s proposal. TGP’s original proposal was based on a physically traded hub market, i.e. that the pipeline would source gas that had been certified as meeting methane intensity criteria. That proposal was met with protest from gas producers that had not pursued certified gas, that would be excluded from selling through the pipeline.

In response, TGP shifted its proposal to a “certification-based” market, which allows for the unbundling of the certification of methane intensity from the physical product. In other words, similar to Renewable Energy Credits in power markets, the natural gas sold through the pipeline could be sold separately from the methane intensity certificate for that gas, thereby allowing buyers other than those using the gas. TGP’s proposed gas “certifiers” included Project Canary (Trustwell Responsible Gas program), RMI/SYSTEMIQ (MiQ Standard) and Xpanisv (which in turn can use third party certification providers). Accentuating the FERC’s key objection, the third party certifiers have different methodologies/standards for certification, including frequency of monitoring. TGP’s revised proposal also met with objections, in this case that TGP would be too influential in determining what qualifies as certified gas.

Thus the pipeline company proposed to place criteria for RSG in its tariff, placing responsibility on the FERC. In rejecting this last proposal, the FERC indicated it was unclear how to evaluate TGP’s criteria given lack of Federal regulation on methane emissions and lack of standards in the industry.

The FERC further cited the risk that TGP’s tariff structure as proposed might stifle market-driven efforts to further reduce methane emissions. In other words, if the tariff only rewarded meeting a threshold, gas producers may lack the incentive to deliver even lower methane intensive gas. Other certificate schemes have incorporated such incentives — for example, the S&P Platt’s/Xpansiv’s recently introduced Methane Performance Certificate uses percentage-below-industry-average as a metric (issuing more certificates for natural gas with emissions further below industry average).

The FERC’s ruling was reported to have been positioned such that it is expected that TGP sorts out a way to proceed with its RSG plan. But the FERC’s point about varying standards reflects the challenge for buyers (and everyone else) in assessing the “true” methane intensity of the certificates and (therefore) of price discovery. This highlights the value in having a set of standards regarding ongoing measurement (frequency, number of points on site, nature of monitoring, etc.).

U.S. RSG market appears set to grow to 20 Bcfd. S&P Global reports that ~20 Billion cubic feet per day of U.S. natural gas production, or 21% of the U.S.’s total dry gas production, is set to have third party certification by the end of 2022 (see chart).

5/18/2022

Large Surplus Remains in EU Emissions Allowances

EU ETS Emissions Allowances (Excess Supply, Reserves and Cap) vs. Emissions, 2013-2021

Sources: European Commission, European Environment Agency

Key points: The EU compliance trading market for emissions allowances announced an 8% decline in allowances in circulation for the coming year. However with this “excess supply” still at 1.45 Billion tons, there is no change in the argument for more aggressive reductions of allowances in order to create financial pressure on EU industry to lower GHG emissions.

EU ETS (over)supply cut to 1.45 Billion emissions allowances. The European Union this week announced a 130 Million, or 8%, reduction in the Total Number of Allowances in Circulation (TNAC) in its Emissions Trading System (ETS) from a year earlier (blue bar in the chart). The TNAC is a measure of oversupply of emissions allowances in the ETS and has a direct bearing on pricing for ETS allowances. The ETS is the EU compliance cap and trade system and each allowance is equivalent to one ton of CO2-equivalent emissions.

The TNAC is managed through the use of a Market Stability Reserve (MSR) (orange bar in the chart) — a formula-based process to remove allowances for the following year when there is oversupply and keep them off the market unless the market swings to a pre-determined under-supply level. For the coming year, 708 Million allowances are to be put into the MSR to bring the total to 2.63 Billion; the addition reflects primarily (1) the annual formula-drive additions (24% of the oversupply) plus (2) previously unallocated allowances being reserved minus (3) deductions for a new entrants reserve.

The MSR has been a key to firming up EU ETS prices. With chronic oversupply in its market through much of the 2010s and allowances priced below €10/ton, prices of emissions allowances began to firm in 2018 (to €20-30/ton) with the advent of the MSR as well as other restrictions on access to allowances. A combination of pressures in 2021, including political, speculative and higher energy prices (driving greater demand for coal and thus more emissions allowances) bid up prices further in 2021 and into 2022, peaking near ~€100/ton.

Although the MSR helps, oversupply seems likely to persist without more stringent cuts to allowances. As can be seen in the chart above, emissions have consistently run under the caps set by the EU, creating more excess supply every year. This faster emissions reduction is credited to the power sector as it has switched to renewable sources, while heavy industry emissions had fallen only 8% by 2020 vs. 2013 (at least in part as these industries continues to receive nearly all of its allowances at no cost).

Oversupply remains the default expectation over the medium term given continued decarbonization of the power sector (e.g. Germany’s coal retirement scheme) even if this has been disrupted by Russia’s invasion of Ukraine. Although the MSR helps to constrain that supply, the emissions allowances remain available for future use. A tightening of caps and lower TNAC has been recommended, with potential steps including increasing the formula-driven rate of excess put into the MSR each year, making it harder to put MSR allowances back into circulation, retiring allowances held by the MSR after a certain number of years and lowering the emissions cap more quickly than the current reduction factor of 2.2% per year.

5/12/2022

U.S. Hydrocarbon Emissions Certification Expands

MiQ Registry’s Natural Gas Grades (based on emissions intensity of produced gas)

Source: MIQ

Key Points: Last week, Xpansiv introduced the first certified crude oil, which has specific GHG and ESG performance. This follows industry introduction of natural gas certification in 2021, coupled with trading in unbundled methane emissions offsets. These offsets can help fund emissions mitigation investment and are the first tied to hydrocarbon production.

The first “certified” crude oil. Last week Xpansiv, an exchange that specializes in environmental commodities including carbon offsets and Renewable Energy Certificates (RECs), introduced Digital Crude Oil™ (DCO) as an addition to its Digital Fuels™ program. DCO has certified Greenhouse Gas (GHG) and Environmental, Social and Governance (ESG) characteristics. The first DCO will come from Lundin Energy’s North Sea production and certification services are being provided by Intertek. This is the first certified crude oil of which we are aware.

Certified natural gas has been gaining traction very quickly. A little over 6 Billion cubic feet per day (Bcfd) of natural gas has now been certified across Appalachia and the Haynesville play; the certifications have all come since December 2021. EQT is the largest contributor, with ~4 Bcfd of its Appalachian gas production, followed by Seneca Resources (~1 Bcfd, also in Appalachia), Chesapeake (~1 Bcfd, Haynesville) and BPX Energy (0.2 Bcfd, Haynesville). The companies have received certification (and a grade, see image above) from either or both Equitable Origin and MiQ (and the certified gas can be traded through MiQ’s or others’ digital registries). Project Canary is providing continuous monitoring services for these producers.

The presumption is certified hydrocarbons will be differentiated in the marketplace. Oil companies have already offered “carbon neutral” product, with purchased offsets, but certified low-emission fuel distinguishes in that it reflects both investments in emissions reduction (Scope 1 and 2) and ongoing monitoring, reporting and verification (MRV). There is at least some policy momentum mandating both such certification and eventual reduction of emissions intensity of fossil production. For example, EU regulation proposed last December includes language that importers of fossil energy into the Union must document annually whether the exporter is measuring and reporting its methane emissions and envisions its own methane emitters monitoring tool (satellite based). Further, the proposal stipulates that by 2025 the European Commission must consider implementing constraints on emissions intensity.

Certified gas has created the basis for a “carbon offset” product to help fund necessary investments. In one example of an unbundled offering, Xpansiv and S&P Global Platts partnered last Autumn to introduce Methane Performance Certificates (MPCs). MPCs are awarded for production based on how much its methane emissions intensity is below industry average (as long as it is below 0.1%). For example, a producer with methane intensity 80% below the industry average is awarded 800 MPCs per 1 Billion BTUs of production. Prices thus far for MPCs have ranged from $6 to nearly $9 per CO2 equivalent.

3/30/2022