Post on 28-Dec-2015
©2003 AgCert International LLC, AgCert™
The True Solution for Managing Climate Change
Opportunities for Cooperatives Associated With Greenhouse Gas Emissions
©2003 AgCert International LLC, AgCert™ 22©2003 AgCert International LLC
AgCert International, plcAgCert International, plc
Leader in the production and sale of agriculturally derived
greenhouse gas (GHG) emission reduction offsets Corporate Headquarters in Dublin, Ireland
USA Headquarters in Melbourne, FL
Founded to generate emission reductions from livestock farms
to reduce the adverse impacts of GHG emissions related to
global warming and climate change and at the same time
provide environmental co-benefits
©2003 AgCert International LLC, AgCert™ 33©2003 AgCert International LLC
What Does AgCert Do?
An Aggregator / Developer who creates and markets a commercial product, GHG Emission Reductions (ERs):
Aggregation - Links farms (production activities) with potential buyers in;
- Diverse geographies
- Diverse farming operations
Developer – develops projects using methodologies based upon
Intergovernmental Panel on Climate Change (IPCC) science.
Uses a standardized process to produce uniform offsets on large scale Proprietary information management system Aggregates (pools) and sells offsets to emitters
Provides livestock farmers with turnkey manure management solutions to: Manage effluent, capture methane, destroy (combust) methane
(methane is 21 times more potent a greenhouse gas than carbon dioxide)
Qualify / quantify GHG emissions and create offsets
AgCert Methodology AM0016 has been approved by the UNFCCC Covers swine, dairy (beef), poultry, sheep, buffalo, goats Globally applicable (all climates)
©2003 AgCert International LLC, AgCert™ 44©2003 AgCert International LLC
AgCert Global OperationsAgCert Global Operations
CanadaOffice: Edmonton
IrelandCorporate Office: Dublin
ChinaAggregating
South KoreaFuture Aggregation
USAOffice: Melbourne, FL
Project ActivitiesNext aggregation priorities
Amazon office location
MexicoOffice: Mexico City
ChileOffice: Santiago
Argentina BrazilOffice: São
Paulo
Eastern EuropeAggregating
(JI)
PhilippinesFuture
Aggregation
Malaysia Aggregating
VietnamAggregating
©2003 AgCert International LLC, AgCert™ 55©2003 AgCert International LLC
What is Global Warming?
When solar gain and re-radiation are balanced, there is no net warming…
The Greenhouse Effect is a natural process that maintains the earth’s temperature at levels hospitable for life
Energy from the sun warms the earth
The earth absorbs heat from the sun and radiates it back into space in the form of infrared radiation
About 1% of the earth’s atmosphere is composed of greenhouse gases (GHG), primarily water vapor, carbon dioxide, ozone, methane, and nitrous oxide.
Together, these gases reflect enough heat back to earth to maintain the average temperature of the atmosphere at around 60° F.
Without the greenhouse effect, the earth would be a cold, uninhabitable place.
©2003 AgCert International LLC, AgCert™ 66©2003 AgCert International LLC
What is Global Warming?
At issue is humankind’s role in enhancing the greenhouse effect, contributing to overall global warming.
Deforestation – Trees remove CO2 from the air. Destruction of trees reduces the number of trees available to remove CO2, and releases stored CO2.
Agriculture – Methane is produced when bacteria decomposes organic matter. About ¼ of global methane emissions from human activities comes from livestock and the decomposition of animal manure.
Fossil Fuels – The supply and use of fossil fuels (burning of coal, natural gas and oil) accounts for about ¾ of humankind’s CO2 emissions.
Industrial – A wide range of processes create “man made” GHG – such as SF6, HFCs and PFCs.
©2003 AgCert International LLC, AgCert™ 77©2003 AgCert International LLC
GHG is measured in metric tons of CO2e (where e = equivalents)… based upon a consideration of GWPs
These gases, plus water vapor, trap Infra Red (heat) energy that is released from the Earth’s surface. GHG stays in the atmosphere for decades or centuries
What are Greenhouse Gases?
Greenhouse Gas
Carbon Dioxide (CO2)GWP = 1
Methane (CH4)GWP 21
Nitrous Oxide (N20)GWP 310
Hydrofluorocarbons(HFCs) GWP 1,000s
Perfluorocarbons (PFCs) GWP 1,000s
Sulfur Hexaflouride (SF6) GWP 16,900
Man-made Causes
Combustion of coal, natural gas for electricity generation, petroleum products including fuel.
Production, transportation of coal and natural gas; decomposition of waste in landfills
Fertilizers; Industrialization combustion of fossil fuels.
Aerosol additives
Aluminum Production
Semiconductor manufacturing processes.
Natural Causes
Volcanoes, trees, forest fire, vegetation, oceans
Decomposition, animal waste, wetlands, natural gas
Moist soils
©2003 AgCert International LLC, AgCert™ 88©2003 AgCert International LLC
Sources of Total GHG Emissions
CANADA
U.S.
39%
3%
14%
10%
25%8%
34%20%
9%
27%
7%
4%
Electricity Generation
Agriculture Transportation
Residential & Commercial
IndustrialWaste
Disposal
Globally: Agriculture accounts for 20% of GHG emissionsGlobally: Agriculture accounts for 20% of GHG emissions
©2003 AgCert International LLC, AgCert™ 99©2003 AgCert International LLC
The World Influence
The US will ultimately be forced to participate in GHG emission reduction programs Compliance requirements Proxy actions Directors and officers insurance (Carbon Disclosure
Project & Swiss RE) Trade barriers Litigation EU ETS / Kyoto
US Multi-nationals already feeling the “compliance pinch” abroad
US voluntary standards do not satisfy international standards for protocol development, reporting, auditing, compliance
Emission reduction market value – quality and reality differentiates EUA: ~ €16-25 ($20.00-30.00) CER: ~ € 5-22 ($6.25-24.00) US ER: ~ $2.10 – $4.50
©2003 AgCert International LLC, AgCert™ 1010©2003 AgCert International LLC
The Role of Agriculture
Agriculture produces 20% of the world’s greenhouse gases Therefore has the potential to be the single largest source of
affordable offsets Agricultural sector continues to grow – offering increasing
opportunity to create offsets Project implementation cycle very short
(weeks/months – not years) Powerful positive environmental co-benefits
Ideal opportunity to foster INDUSTRY ↔ AGRICULTURE partnerships
Agricultural sources in the US and Canada run a HUGE risk of becoming point sources vs. emission reduction suppliers due to: Lack of defined policy Role of sequestration hasn’t been defined – but potential is HUGE Inappropriate baseline and verification definitions/standards Lack of country-wide GHG mitigation initiative(s) “Global realities” - No recognition of existing US efforts via Kyoto, EU ETS Lack of approved agricultural methodologies or verification protocols Perception of voluntary vs. mandatory reductions Denial
©2003 AgCert International LLC, AgCert™ 1111©2003 AgCert International LLC
Baseline
Composting
Digester
Covered Lagoons /Covered Storage
Earthen Basin
Lagoon
Agricultural “Baselines” Will Determine Agriculture’s Capacity to Contribute…
In this manure management example, open air lagoons are the “baseline”. Any practice or technology enhancement yielding improved GHG performance (compared to the baseline) qualifies for ER consideration…
Similar baselines are being derived for other agricultural practices, such as tillage, land application of manure, etc.
©2003 AgCert International LLC, AgCert™ 1212©2003 AgCert International LLC
Creating Agricultural ERs
Incremental Technology Progression
Manure Management (Methane and Nitrous Oxide Avoidance)
Tillage
Open Lagoon Covers Anaerobic Digester
Invasive Minimum Till No Till
(baseline)
(baseline)
©2003 AgCert International LLC, AgCert™ 1313©2003 AgCert International LLC
Practice Change Create Reductions?
•Emission Reductions (ERs) are created by a difference in the amount of emissions from a defined baseline.
•ERs are created by improved manure handling practices such as covering a lagoon/earthen basin with a biocover or non-permeable cover, the use of a Slurrystore, deep pit confinement buildings, or anaerobic digesters.
Less MethaneLess Nitrous Oxide
Less CO2e
Emission Reduction
©2003 AgCert International LLC, AgCert™ 1414©2003 AgCert International LLC
Wetlands
Corn
Soy Beans
Forest
Wetlands
GRP
$
CRP
Pasture
Corn
Hill
Corn
$
$
Wetlands
Hill
Methane Avoidance
CRADA Phase 1
Woods
Pasture
Pasture
Soybeans
CRP
Sequestration
CRADA Phase 1
Wind Breaks CRADA Phase
2
Grass Filterstrips & Riparian Buffers CRADA Phase 2
Grasslands Mgt.
CRADA Phase 2
Afforestation, Silvopasture &
AgroForestry CRADA Phase 2
Bio Digester CRADA Phase
2
$
$
$$
$
$
$
$
Farm ERs: Phased Approach
©2003 AgCert International LLC, AgCert™ 1515©2003 AgCert International LLC
StatesUpdated July 2005 by…
States with a Carbon Cap or Offset Requirement for Power Plants
States with GHG Reporting & Registries
©2003 AgCert International LLC, AgCert™ 1616©2003 AgCert International LLC
Climate Action Plans
Climate Action Plans detail steps that the states can take to reduce their contribution to climate change.
The process of developing a climate action plan can identify cost-effective opportunities to reduce GHG emissions that are relevant to the state.
The individual characteristics of each state’s economy, resource base, and political structure provide different opportunities for dealing with climate change.
Without targets for emissions reductions, incentives for cleaner technologies, or other clear policies, climate action plans will not achieve real reductions in GHG emissions.
Updated July 2005 by…
©2003 AgCert International LLC, AgCert™ 1717©2003 AgCert International LLC
States
RGGI (Regional GHG Initiative) Multi-state cap-and-trade program
CT, DE, ME, NH, NJ, NY, RI, VT DC, MD, PA observing
Phase 1 is power sector only 1990 levels by 2010 10% below 1990 by 2020 75-85% below current levels in the long run Rules are being finalized 8 states now
California Has Signed into law Reduce GHD Emissions to 1990 levels by
the year 2020
California & RGGI Announced they will link the two systems together
©2003 AgCert International LLC, AgCert™ 1818©2003 AgCert International LLC
States
Climate Trust 501(c) non-profit start up formed in 1997 to meet
needs of Oregon’s new CO2 standard New power plants must offset approximately 17% of
CO2 emissions Develop CO2 offset project themselves Buy offsets created by other project developers Pay Carbon Trust to purchase offsets on their behalf
Offsets can only be CO2 (no methane or other GHG equivalent) Carbon sequestration may qualify
©2003 AgCert International LLC, AgCert™ 1919©2003 AgCert International LLC
Voluntary
Chicago Climate Exchange (CCX) Multi-sector cap & trade program supplemented with
project-based offsets Price discovery & dissemination of market information 2003 – 2006: Reduce emissions to 1%, 2%, 3% and 4%
below 1998 – 2001 baseline
©2003 AgCert International LLC, AgCert™ 2020©2003 AgCert International LLC
Voluntary
1605(b) Voluntary GHG emission inventory and reductions
reporting Established by section 1605(b) of the Energy Policy Act of
1992 Over 200 regular reporters Goal is to reduce GHG emissions intensity 18% by 2012 3/24/05: Interim Final General & Draft Technical
Guidelines published in the Federal Register for comment 9/20/05: Guidelines become effective (unless extended) Summer 2006: First reports under guidelines Reduction projects must have a project start date of 2002
or later 3rd party verification is encouraged but not required Relationship to WRI, Climate Leaders and Climate Vision
©2003 AgCert International LLC, AgCert™ 2121©2003 AgCert International LLC
What are Buyers Requiring?
Government Approval
3rd Party Verified Science based Audited Clear Title Data Transparency Permanence Additionality
Emission Reductions that enable emitters to meet their compliance requirements…
Emission Reductions that meet all global “credibility” tests…
Long term contracts/relationships Sustainable Economics Guaranteed Delivery Kyoto Compliance Kyoto Approved Project
Development Design Environmental Co-Benefits
©2003 AgCert International LLC, AgCert™ 2222©2003 AgCert International LLC
The AgCert Solution
AgCert provides:
Government protocols – developed with USDA and other government entities
Globally applicable UNFCCC-approved GHG emission reduction methodology (AM0016)
Science partnerships:
USDA CRADA #58-3K95-2-949
BNL CRADA #BNL-C-04-08 Geo-referenced, time/date stamped data; transparent access Rigorous 3rd party verification ISO Certification Aggregated supply: simplicity and dependability for buyers
and sellers AgCert manages verification, registration and liability issues
©2003 AgCert International LLC, AgCert™ 2323©2003 AgCert International LLC
Where Are the $s For Farmers & The Cooperatives?
Partnerships:
Biogas Recovery systems Coop could recruit farmers whose
livestock operations are big enough to support digesters on individual farms
Organizes possible centralized systems Possible marketing opportunities for
solids Coop collects data Coop performs site assessments
©2003 AgCert International LLC, AgCert™ 2424©2003 AgCert International LLC
Soil Sequestration
Coop already has large percentage of data Fertility records Cropping history Need to add tillage history
Conventional Minimum No Till
Range-Land Management
©2003 AgCert International LLC, AgCert™ 2525©2003 AgCert International LLC
By a WALL STREET JOURNAL Staff ReporterOctober 24, 2006; Page B2
Cargill Inc., the farm-commodity processing giant, is expected to announce today that it is branching into the business of turning livestock manure into methane gas.
The move by the closely held Minneapolis company would be a big boost for the fledging renewable natural-gas industry and could help fuel trading in greenhouse-gas credits on carbon-credit exchanges, such as the Chicago Climate Exchange.
Cargill has agreed to recruit farmers whose livestock operations are big enough to generate a reliable supply of manure for anaerobic digesters built and operated by Environmental Power Corp., Portsmouth, N.H. A digester, which can cost $1 million to build, uses microorganisms to convert manure from about 1,000 cows into methane, which is then sold to natural-gas utilities.
While Cargill isn't investing in the operation, Cargill would earn warrants for Environmental Power stock if it generates a certain amount of business. Cargill has close ties to thousands of livestock producers; it sells them feed as well as buys their cattle and hogs for Cargill meatpacking operations.
Rich Kessel, Environmental Power chief executive officer, said the U.S. livestock industry is capable of supplying several hundred manure-to-methane complexes. While farmers aren't paid for the manure they deliver to such operations, they typically share in profits if revenue rises to a certain level.
Environmental Power operates three digesters in Wisconsin, all of which are supplied by dairy cows, and is building a complex in Texas.
URL for this article:http://online.wsj.com/article/SB116166048686101768.html
Cargill to Assist Venture to Convert Manure to Methane
©2003 AgCert International LLC, AgCert™ 2626©2003 AgCert International LLC
Adopt environmental management practice
Reduce GHGs (and other pollutants)
AgCert verifies emission reduction (via data, site visit, technology)
Creation of agricultural emission reduction
3rd party verification/validation
Audit (if applicable)
Sell within emissions trading system
Farm revenue
How the ER Aggregation Process Works
(and how to capture the dollars in carbon credits)