Emission Advisors was formed to assist our clients in navigating the ever changing landscape of the environmental markets.
Whether it is a one time transaction or portfolio optimization or a consulting job, Emission Advisors is committed to providing excellent service and achieving results for our clients. We deal in all environmental credit markets from, emission reduction credits (ERCs), carbon allowances (AB32 cap and trade program and Regional Greenhouse Gas Initiative (RGGI)), carbon offsets, renewable energy certificates (RECs), and Cross State Air Pollution Rule (CSAPR.) We offer Brokerage services, Portfolio Optimization, Valuation Services, Environmental Asset Management and Consulting to clients across United States and Canada. We work closely with the credit buyers and sellers to assess their demands, manage their portfolios and execute their desired environmental credit transactions.
What are Environmental Credit Markets
Environmental credit markets provide a market based mechanism to reduce emissions in a specific area whether nationally or regionally. The market program is designed by establishing a cap on emissions then decreasing the cap over time and allows for facilities in the area to trade amongst themselves below the cap.
This market based approach allows the facilities who can make the lowest cost reductions to do so and sell excess allowances to other facilities in the program. The Clean Air Act of 1990 allowed for environmental credit markets in the United States to be established and to thrive. Nitrous Oxide (NOx), Sulphur Dioxides (SO2), Volatile Organic Compounds (VOC), Particulate Matter (PM10 and PM2.5), and Greenhouse Gas (GHG) are all pollutants that are being actively reduced by using market based cap and trade programs.
EPA designated nonattainment areas are required to have a program in place to bring the area back into attainment with the National Ambient Air Quality Standards (NAAQS). Majority of nonattainment areas have established an Emission Reduction Credit (ERCs) program. The ERC program requires any major new builds or the expansions in the area to offset their potential to emit along with an offset ratio on average ranging from 1.1 to 1 up to 1.5 to 1. Therefore, if a company wanted to build facility with potential to emit 100 tons they would have to turn in up to 150 tons of ERCs in order to receive their operating permit. ERCs are created when an existing facility permanently reduces it emission. ERCs are only generated for actual emissions. In this example 150 tons of actual emissions are reduced but will not be replaced with anymore than 100 tons of emissions. This is how the nonattainment area is able to reduce emissions over time with goal of achieving attainment with the NAAQS.
Majority of environmental credit transactions are executed through an environmental credit broker. Some environmental credit markets trade over a futures exchange and bilaterally with a long form contract. A number of the less liquid and less transparent regional markets on trade with bilaterally. A number of markets report pricing daily or monthly while there are some environmentalmarkets where prices are not reported. An environmental credit broker adds significant value in environmental markets where there is little price transparency.