Case Study 1 - CER transaction
Climate Cent
 
Relationship with the Swiss Climate Cent Foundation

In mid 2006, the Commercialisation Group at EcoSecurities entered a contractual relationship with the Swiss Climate Cent Foundation with an agreement to provide up to 3 million CERs during the Kyoto Commitment Period.

Climate Cent's Requirements

The Climate Cent Foundation has an agreement with the Swiss Federal Council in which it has committed by mid-2007 to be in a position to reduce greenhouse gas emissions by at least 9 million tonnes of CO2 equivalent in the Kyoto commitment period. In order to fulfil the commitments the Foundation can purchase up to 8 million Kyoto Credits (CERs or ERUs) during the period.

Transaction structure
To help the Foundation meet their requirements, EcoSecurities provided a contract for the guaranteed delivery of 2 million CERs in four equal tranches over the years 2009 to 2012. The CERs are not project specific, but will be delivered from projects within the EcoSecurities CDM project portfolio. Due to the technological and geographic diversity of its portfolio, EcoSecurities was able to guarantee that the CERs would be delivered from projects which fulfilled the Foundation’s specifications regarding ecological integrity and sustainable development.

In addition to the guaranteed volumes, EcoSecurities was also able to provide the Foundation with a call option for the provision of up to another 1 million CERs over the same period. This option is exercisable up to mid-March 2008.

Benefits to Climate Cent

The guaranteed volumes provided by EcoSecurities have allowed the Foundation to source CERs for a portion of their portfolio without taking on the delivery risks that exist throughout the CDM market. The secure volumes provide a core position within their program and allow them to diversify and take on more delivery risk in other contracts. The call option has given the Foundation the ability to fine tune the CERs they receive so that they don’t exceed, or undershoot, their mandate. With a fixed exercise price, this has allowed the Foundation to fulfil its commitments to the Swiss Federal Council within its mandated time period. EcoSecurities believe that by providing these two products they provided the Foundation with sufficient scale in their portfolio with known costs and flexible volume control mechanisms that are not readily available elsewhere in the relatively immature CDM market.

In addition to the Swiss Foundation, EcoSecurities had contractual relationships with the representatives from the Austrian, Japanese and Danish governments for the provision of CERs and ERUs.
 
Case Study 2 - VER transaction
Yahoo! 


Yahoo!’s objective
In April 2007, Yahoo! announced its decision to become a carbon neutral organisation. In order to achieve this, they are changing their internal energy consumption practices alongside investing in greenhouse gas emission reduction projects. Yahoo! wanted to support projects that met their criteria and provided the best fit for Yahoo!’s overall objectives – this included investing in projects located in areas of the world where Yahoo! has a presence.

Yahoo!’s other criteria for investing in emission reduction projects included:
  • Measurable results: They wanted to see real, measurable, direct emissions reductions.
  • Verification: Yahoo! wanted their projects to be screened through a third-party verification process to ensure they are actually delivering their expected environmental benefits.
  • Additionality: Yahoo! wanted to ensure that their investments supported projects that go beyond the business as usual scenario, and help to develop the use of clean energy in regions where coal and diesel are the standard approach to providing power.
  • High quality: Yahoo! looked for projects with strong environmental returns andalso helped other businesses and consumers build faith in this new and emerging offset market.
Working with EcoSecurities

After reviewing over 100 projects and undertaking much due diligence, Yahoo! decided to offset part of its 250 thousand metric ton carbon footprint from 2006 using pre-registration VERs from EcoSecurities’ Primavera hydropower project, located near Catorce de Abril, a small village in the state of Rondonia, 1,400 miles northwest of Sao Paulo. Primavera is a small run-of-river dam, which means it uses natural flow and elevation drop to generate electricity. Although hydropower is common in Brazil as a whole, much of this region receives its power from state-subsidized diesel plants, therefore investing in a clean power project here seemed to be a critical and timely decision for Yahoo! 
  
 
Case Study 3 - VER transaction
Netjets
  
Netjets' requirements
In September 2007, Netjets Europe, the largest business jet company in Europe, announced a comprehensive new programme to address its impact on the environment and become 100% carbon neutral by 2012.

Alongside sponsoring research at Princeton University to develop ultra low-emission jet fuels, and hiring a board of top environmental consultants, Netjets Europe decided to purchase a portfolio of high-quality, robust emission reductions.

Working with EcoSecurities
After considering 29 other providers, Netjets Europe approached EcoSecurities to supply them with credits from its wide portfolio of emission reduction types. The company decided to invest in pre-registration Verified Emission Reductions (VERs) from the following projects to offset the carbon emissions of both the company and its clients:
  • Hydroelectric project – China, Sichuan province
    This project is a hydroelectric plant that is being built in the village of Wahouku. It consists of two 22 MW generators that will use water from the river without the creation of a dam or reservoir. When completed, the project will contribute over 180,000 MWh of electricity to China’s central power grid, which is currently 99% powered by coal-fired generators.
  • Landfill gas project – Chile, Elqui province
    This is a project to capture methane (the major component of natural gas) from a landfill site in the city of Coquimbo, in Chile, and use it to generate electricity. Methane is 21 times more harmful to the environment than carbon dioxide. The project will eliminate an average of 95,000 tonnes of CO2 - equivalent gas a year for 10 years beginning in 2008, as well as serving as a clean energy demonstration project for other landfill sites in Chile.
  • Pig farm biogas project – Philippines, Pampanga provinces
    This project is part of a series of demonstration projects that will bring the technology and financing to engineer more sustainable waste treatment solutions and capture methane emissions to create biogas for electricity generation. The project will also turn the effluent into water that is safe for irrigation. 
“We started out with the desire to make a real difference in the world. We quickly learned that the offset marketplace was a bit of a jungle. But we didn’t want to just do transactions. So we literally sat down with 29 different providers and decided to work with one, EcoSecurities. We chose them because we are confident the projects they source, monitor and verify, provide additionality and really reduce emissions,” said Mark W. Booth, Chairman & CEO.