![]() ![]() At $100/ton, that would represent a $1.6B annual market opportunity for that potential buyer alone. Take just Microsoft MSFT, for example, which estimates that their annual carbon emissions impact is 16 million tons. Once a market and pricing and offtake agreements become established, the market opportunity will be huge. And so with Shopify and Northern Lights and others are now signing up to contracts that essentially resemble revenue contracts resembling PPAs, that is enabling direct air capture project developers to move forward with financing. This looks very familiar to power project developers, who often need to sign up a PPA before being able to raise construction financing. Specifically, corporate buyers are now starting to sign up for the kinds of purchasing agreements that will enable project developers to obtain the financing they need for efforts like direct air capture. The past cases of forestry-based offsets that didn’t yield expected results will mean lots more scrutiny, and that should result in stronger enforcement mechanisms. These corporate buyers are also going to be under increasing pressure for their carbon offsets purchases to be legitimate, and this should serve to force better quality control on the projects themselves. ![]() But others will work to establish the conditions for actual market success. When real commitments are put in place by companies, some will look to greenwash their way to meeting those commitments. Many of the criticisms described above should look really familiar to project developers (aside from the “indulgences” argument, probably), in that they come down to contractual obligations, operational executions, and price and volume certainty.Īnd the private sector buyers increasingly interested in acquiring carbon offsets more naturally understand this now than previous generations of voluntary buyers. That’s because project finance is really at the heart of this market. These are definitely not interchangeable markets with true fungibility between them, and yet the wave of demand is such that it’s still driving up prices across the board, with some now projecting that a $100/ton price for carbon will become commonplace.īesides the surge in demand for these credits, we’re also seeing early signs that the voluntary involvement of private sector buyers could help create the conditions for a more efficacious market for carbon offset project development. ![]() There are compliance markets and voluntary markets for carbon offsets, and a thousand different micro-markets for various solutions. That is what is now creating a big demand surge for offset projects. ![]()
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |