Equatic and Eco Launch Carbon Dioxide Removal Methodology

Equatic and Eco Launch Carbon Dioxide Removal Methodology

Equatic, in partnership with EcoEngineers and the ISO – International Organization for Standardization (ISO), unveiled ISO 14064-2:2019, a new methodology for monitoring, reporting, and verifying (MRV) of electrolytic ocean-based carbon dioxide removal (CDR).

This methodology offers a thorough, transparent framework for quantifying, monitoring, reporting, and verifying greenhouse gas (GHG) emissions and removals at the project level in ways that meet ISO’s rigorous and world-renowned reporting standards. Requirements for project planning as well as identifying and selecting project-specific GHG sources, sinks, and reservoirs (SSRs) are included in the standard. Furthermore, it offers guidance on project performance and data quality management, including recommendations on baseline scenario outlines, monitoring, quantifying, documenting, and reporting. Some of the most rigorous and unique aspects include:

  • Closed-system crediting, including measuring the changes in the carbonate system in both the incoming and outgoing seawater using off-the-shelf sensors for solid and liquid samples;
  • Carbon emissions of any inputs and the transportation of all inputs and outputs;
  • System leakage considerations, including electricity and carbon dioxide (CO2) sourcing and leakage, as well as physical forms of potential CO2 leakage;
  • Guidelines for additionality including regulatory and financial additionality.

“This high-integrity methodology provides a clear framework to standardize MRV across the industry,” said Roxby Hartley, Ph.D., climate risk director for Eco. “It provides a clear road map that aligns with the highest industry standards, ensuring that the carbon removal process is meticulously monitored and recorded.”

Read the announcement on Equatic’s website here: https://www.equatic.tech/articles/iso-14064-2-2019-mrv-methodology

Download the methodology here: 

Equatic invites public comment until June 10, 2024, via MRV@equatic.tech.

 

About Equatic

Equatic is a carbon removal company leading the industry in combined carbon dioxide removal and carbon-negative hydrogen generation. Using a patented seawater electrolysis process, Equatic amplifies the ocean’s inherent ability to absorb and store massive amounts of carbon. The technology was created and developed at the UCLA Samueli School of Engineering’s Institute for Carbon Management. Following the successful operation of two pilot facilities in Los Angeles and Singapore, Equatic is now constructing the world’s largest ocean-based CDR facility and works with industry pioneers, national agencies, and government leadership to scale climate solutions at unprecedented rates. The company sells high-quality carbon removal credits and is the only ocean-based carbon removal company that measures removal inside the boundary of its plants, leading to unprecedented certainty.

EcoEngineers Partners With XPRIZE to Accelerate Carbon Removals

The following is an article originally published May 16, 2024, by Business Wire.

EcoEngineers Partners With XPRIZE to Accelerate Carbon Removals

DES MOINES, Iowa–(BUSINESS WIRE)–EcoEngineers (Eco), a consulting, auditing, and advisory firm with an exclusive focus on the energy transition, today announced that it is partnering with XPRIZE to evaluate finalists vying for the $100 million XPRIZE Carbon Removal competition that incentivizes innovation in carbon dioxide removal (CDR). Eco will conduct performance verifications to establish how effectively each project removes and durably stores carbon dioxide.

XPRIZE Carbon Removal aims to tackle humanity’s biggest threat – fighting climate change by rebalancing Earth’s carbon cycle. Upon its launch in 2021, the $100 million competition was the largest incentive prize in history. The nonprofit has set a challenging goal for its competitors: each project must demonstrate the removal of at least 1,000 tonnes of carbon dioxide within the specified project period. Eco will evaluate eight of the 20 groundbreaking projects in this year’s competition.

“We are honored to partner with XPRIZE in their ambitious efforts to combat climate change,” said Shashi Menon, CEO of Eco. “We look forward to applying our skills to help identify and promote the most promising and impactful innovations in carbon removal.”

Eco will leverage its extensive expertise in life-cycle analysis (LCA), carbon removal technologies, and greenhouse gas monitoring, reporting, and verification (MRV) to conduct a thorough evaluation of each project. This process is vital for confirming that the stated environmental benefits are quantifiable and substantiated thereby guiding future investments and policies in environmental technologies.

Eco will examine a diverse array of carbon removal technologies and approaches in various sectors such as energy, manufacturing, and agriculture. Each project represents a potential breakthrough in its field, and Eco’s evaluations will play a key role in determining which solutions can scale up to have a global impact by ensuring that the innovative solutions proposed by the competitors are both effective and verifiable.

The outcomes of these evaluations are eagerly anticipated, as they will highlight the most effective and scalable solutions for CDR. The insights gained from Eco’s assessments will also contribute to the broader environmental sector, offering valuable insights that can influence future environmental strategies and policies.

Eco’s involvement in XPRIZE represents a significant step forward in its mission to foster sustainable development and mitigate climate change on a global scale. By ensuring the accuracy and reliability of carbon removal claims, Eco is helping to pave the way for a more sustainable future.

About XPRIZE

XPRIZE is an established global leader in designing, launching, and executing large-scale competitions to solve humanity’s greatest challenges. Our unique model democratizes innovation by incentivizing crowd-sourced, scientifically viable solutions to create a more equitable and abundant future for all. Donate, learn more, or join a team at www.xprize.org.

About EcoEngineers

EcoEngineers (Eco) is a consulting, auditing, and advisory firm with an exclusive focus on the energy transition. From innovation to impact, Eco helps its clients navigate the disruption caused by carbon emissions and climate change. Eco helps organizations stay informed, measure emissions, make investment decisions, maintain compliance, and manage data through the lens of carbon accounting. Its team of engineers, scientists, auditors, consultants, and researchers live and work at the intersection of low-carbon fuel policy, innovative technologies, and the carbon marketplace. Eco was established in 2009 to steer low-carbon fuel producers through the complexities of emerging energy regulations in the United States. Today, Eco’s global team is shaping the response to climate change by advising businesses across the energy transition. For more information, visit www.ecoengineers.us.

Venturing Into The Voluntary Market

The following is an article originally published May 14, 2024, by Ethanol Producer Magazine.

Venturing Into The Voluntary Market

By Luke Geiver, Ethanol Producer Magazine

The U.S. ethanol industry has officially entered the voluntary carbon market (VCM). In March, Red Trail Energy, a western North Dakota producer, became the first ethanol plant to be issued CO2 removal credits (CORCS) within a global marketplace that connects CO2 suppliers and buyers looking to neutralize their carbon footprint. Apart from RTE’s much-celebrated, multi-year effort to complete an onsite carbon capture and sequestration project at its North Dakota biorefinery, the plant’s management team worked with EcoEngineers to successfully navigate the process of generating CORCs. Puro.earth, a Finnish-based carbon crediting platform—backed by Nasdaq and other investors—issued the CORCs, making them available for companies like Microsoft, Shopify and other massive brands to purchase as part of their CO2 reduction initiatives. Renewable Products Marketing Group, the Minnesota-based ethanol marketing company, will market the credits.

Jodi Johnson, RTE CEO, called the accomplishment a groundbreaking milestone, noting that the company’s position in the ethanol industry is now stronger. Antti Vihavainen, CEO of Puro.earth called the milestone monumental, highlighting the scale of the project as an example of how large projects can and will supply the VCM with significant volume. Jim Ramm, vice president of biofuels at EcoEngineers, said the achievement by RTE and all those involved has created an opportunity for ethanol producers that can be leveraged now and well into the future.

Get to Know the VCM 
The voluntary carbon market was created to promote the removal of industrial carbon dioxide at a global scale. The market provides corporations and other entities that do not directly produce carbon dioxide in large volumes the ability to participate indirectly in the physical reduction of CO2. Through one of several marketplaces operating today, a buyer can purchase carbon removal credits, in various forms, for a fluctuating fee. By purchasing credits, the buyer is able to meet its own carbon reduction initiatives while incentivizing the removal of CO2. In return, the supplier is monetarily rewarded for partaking in CO2 removal practices. The way RTE and its partners are venturing into the VCM appears to be refreshingly clear cut, but both Vihavainen and David LaGreca, managing director for EcoEngineers, say that’s not always the case for the carbon capture and storage (CCS) sector.

The wind and solar industries have been participating in, and benefiting from, the VCM for years, LaGreca says. The VCM is roughly 30 years old and picks up where global governmental policies leave off. The purpose of the market is to reward carbon removal and make CCS projects more feasible.

“Renewable fuels haven’t really played in this sandbox before, as others have,” LaGreca says.

Playing in the VCM requires the establishment of capture metrics, proof points, traceability and several other terms that all relate to verification. According to LaGreca, a project aiming to participate in the VCM as a supplier must submit project documentation in a particular format with exacting methodology. For RTE, LaGreca and his team were brought in to explore the feasibility of the ethanol plant participating in the VCM in the first place, and then to produce the documentation required from RTE to receive CORCs.

According to Puro.earth, the verification process is one major reason why Nasdaq has taken a leading investor position in its company. Puro.earth has developed a rigorous, effective and proven process for analyzing and verifying the carbon capture and/or sequestration abilities of suppliers to the VCM. While most carbon offset schemes focus broadly on emissions reduction, Puro.earth’s approach is all about carbon removal. The company requires scientifically verified removal methods that capture and store CO2 durably for a minimum of 100 years—with industrial scaling potential. The scaling criterion is one of several reasons Vihavainen and his team are excited to work with RTE.

“Puro has developed multiple methodologies for this,” Vihavainen says. His company has worked with scientific advisory boards and other third-party advisors to create its verification system. The company has no investments or stake in any CO2 supplier or marketplace, he emphasizes. It exists to generate CORCs that the marketplace can trust. Vihavainen says Puro’s approach is aligned with global benchmarks, namely the International Carbon Reduction and Offset Alliance, a trade group of providers of voluntary carbon offsets.

Also, Puro only certifies durably stored carbon with net-negative emissions. Avoided or reduced emissions aren’t included in any carbon accounting. The company recognizes five different carbon removal methods: biochar, terrestrial storage of biomass, carbonated materials, enhanced rock weathering and geologically stored carbon. To date, Puro has certified CORCs for 175 different projects across 33 separate countries for a total of 818,527 tons of CO2. RTE is by far Puro’s largest CO2 CORC supplier. It’s also the only U.S. project in its portfolio. The majority of all CORC suppliers through Puro are in the biochar sector.

The verification process required of suppliers includes four steps. First, the supplier makes a claim on the net negativity of their products or process with accompanying evidence via a lifecycle assessment or environmental product declaration (which basically says the product has removed more CO2 than it has emitted). Second, independent assessors in the Puro system visit the production facility, validate data accuracy and issue an audit statement. Puro covers the cost of verification. Third, the verified volume of extra carbon absorbed in the products or process is then issued CORCs for every metric ton of CO2 removed and stored. Then, suppliers are free to sell their CORCs to any venue, marketplace or broker; they can also sell them directly to companies that want carbon credits to neutralize their emissions by indirect removal.

“We publish a price index with Nasdaq,” Vihavainen says. “We promote the existence of high-quality carbon removal.”

The CORC Carbon Removal Price Index tracks the price of all CORC transactions (with a separate index for biochar). As of February, the CORC index price hovered around $170 per ton. Over the past 18 months, the index price has fluctuated from roughly $130 per ton to almost $200 per ton.

When a CORC is retired (i.e., bought) the owner of the CORC can claim the benefit. CORCS will last up to three years, Vihavainen says. There are several marketplaces for buyers and suppliers to connect, including Supercritical, Patch, Carbonfuture, Cloverly, Watershed, Klimate, Lune and even Salesforce. CORCs are digital, certified and tradable.

Ethanol’s Future In the VCM 
Puro.earth gets compensated for its CORC certification work in two ways: An account holder can pay an annual membership fee, or a service fee is applied to the supplier when a CORC is traded for the first time. The fee is based on the volume of the annual output of CORCs and the price level of the CORCs.

Apart from its revenue generation goals, Puro’s mission and overarching goal is to expand the number of carbon removal projects across several industries. The company also aims to expand the access of CO2 buyers to suppliers with large CO2 removal volumes, like RTE.

When Puro.earth launched in 2017, Vihavainen says, there were a half-dozen biochar companies in the world, and now there are more than 500. That growth is, in part, due to Puro.earth and its ability to create an additional buyer for one of the industry’s main processes: carbon removal. Prior to RTE, the suppliers that Puro.earth has typically certified have had annual output totals far less than 100,000 CORCs. In fact, RTE is the first supplier to be certified by Puro that is at or above that level.

“Adding RTE is very significant,” he says.

None of it would have happened without Ramm of EcoEngineers. Ramm introduced RTE to LaGreca and his team. At first, LaGreca wasn’t sure if the RTE project would work in the VCM. Now, he says, it’s starting to look like a blueprint for other ethanol producers to follow. RTE underwent an independent verification and successfully met all requirements of feedstock sustainability, carbon sequestration permanence and financial additionality. Through only the first 14 months of its CCS project, RTE was issued more than 150,000 CORCs.

EcoEngineers has published a case study on its work with RTE that demonstrates the opportunity to both RTE and the ethanol sector as a whole. Participating in VCMs, the study says, “creates alternate revenue streams that reduce project risks and create optionality for bioenergy with carbon capture and storage projects.” The study added that “current incentive programs in the U.S. such as the 45Q federal tax credit for carbon capture and storage and state low-carbon fuel standards … are attractive to ethanol producers, but long permitting times and regulatory risks that impact credit pricing pose barriers.”

By participating in the VCM, producers have more choices, LaGreca says. “They now have the choice to go from one to the other depending on price.”

Shashi Menon, CEO of EcoEngineers, says that the company’s goal was to set RTE up for success in regulated markets (i.e., LCFS programs) while also helping the ethanol producer jump into the voluntary market. “This gives RTE a significant competitive advantage within the ethanol sector and serves as a new industry standard for others to follow,” Menon says. 

Ramm echoes that belief.

“The VCM recognizes that these CO2 removal projects, like that at RTE, are very important to meeting their clients’ goals,” he says. “Ethanol [producers are] in a really good position to participate in the VCM because they provide the best form of CO2 for sequestration.”

Should an ethanol plant control the environmental attributes of its captured carbon, it will have optionality. Some producers looking to capture CO2 via pipeline may not retain their environmental attributes based on their respective contracts with a pipeline provider. According to EcoEngineers, by registering CCS pathways in several jurisdictions and alternative VCMs, ethanol producers will be able to choose to attach the CCS credits to the fuel product and sell ethanol for a premium, or separate the CCS credits from the fuel and sell CO2-removal credits into the “demand-heavy VCM.”

Despite the testing and documentation requirements necessary to register CORCs through Puro.earth, Ramm and LaGreca estimate they could onboard a capturing producer through feasibility studies, education about the VCM and other essential steps in roughly 90 days. Other producers currently capturing CO2, or planning to, may be wondering whether entering the VCM is right for them. For Ramm, the answer is a resounding yes, he says.

LaGreca believes the VCM will be a strong growth driver in the short term for carbon capture projects.

“I think that a lot of the ethanol producers or capture equipment companies can leverage this and help make a more rapid decarbonization of the industry happen,” he says.

Those that move into the VCM early may also be rewarded. While the incentive portion of the VCM is a major driver now, it isn’t meant to last forever. The goal, according to LaGreca and Vihavainen, is that someday every industrial carbon producer will incorporate capture methods into its systems, regardless of incentives.

For CO2 capture projects that aren’t funded or economically feasible at the moment, Puro has an accelerator program to match up projects with investors. It also has a large list of sales channel partners, suppliers and buyers already connected and ready to do business with a large list of credit takers. Interested auditors and verification companies can also link up to Puro. As Vihavainen says, every part of the VCM is growing, including the number of participants.

EcoEngineers has already proven its trailblazing capabilities within the ethanol sector, its management team says. Now, they’re ready for their next project, equipped with the knowledge gained from their role in helping the first-ever ethanol plant enter the voluntary carbon market. Their work has been verified and is repeatable.

EcoEngineers Achieves Milestone With Canadian Clean Fuel Regulation Scope Extension Accreditation

EcoEngineers Achieves Milestone With Canadian Clean Fuel Regulation Scope Extension Accreditation

DES MOINES, Iowa–(BUSINESS WIRE)–EcoEngineers (Eco), a consulting, auditing, and advisory firm with an exclusive focus on the energy transition, today announced the expansion of its services in compliance with the Canadian Clean Fuel Regulations (CFR). After an intensive four-month period of ISO 14064-3:2019 training and aligning a cadre of life-cycle analysis (LCA) critical reviewers and specialists, Eco has been granted a scope extension by the ANSI National Accreditation Board (ANAB). This accreditation empowers Eco to perform CFR verifications for producers and importers looking to participate in the clean fuels market in Canada producing renewable, bio, and low carbon intensity (CI) fuels.

The Canadian government expects the CFR to drive significant economic opportunities in the development and use of clean fuels and technologies. CFR focuses on emissions throughout the life cycle of fuels, following similar approaches that exist in British Columbia, California, and Oregon. These jurisdictions have benefited from the expansion of clean technology industries because of these regulations.

In combination with the government of Canada’s $1.5 billion Clean Fuels Fund, the CFR creates incentives for the increased domestic production of low-CI fuels, such as ethanol. This creates economic opportunities for biofuel feedstock providers like farmers and foresters. It will also help Canadian fuel producers to compete in the rapidly expanding global market for clean energy.

“This expansion reflects our unwavering commitment to supporting sustainable energy solutions,” said Shashi Menon, CEO of Eco. “We are dedicated to aiding businesses in meeting the stringent environmental regulations set by the Canadian government.”

Eco’s accreditation (Accreditation ID: ECOEN 9159) for greenhouse gas (GHG) verification standards is extended to the verification of applications and reports under the CFR for renewable, bio, and low-CI fuels. The scope extension, effective as of March 22, 2024, adds to its initial accreditation as a GHG verification body in accordance with ISO standards ISO/IEC 17029:2019, ISO 14065:2020, and ISO 14064-3:2019 with specific scope accreditation for verification of assertions related to GHG emission reductions and removals at the project level for project activities under ANAB scope 01 GHG emission reductions from fuel combustion.

“The world is relying on market-based mechanisms to find a solution to the emissions problem and the climate problem,” said Menon. “In this context, there is a need for solid methodologies and reliable verification services to ensure the systems we put in place over the next decade are robust and will deliver the results we seek. ISO standards are emerging as the de facto global accepted standard for verification of environmental attributes to help structure sustainable financial market and create the trust and confidence that investors need. One great example of this is our recent work with Red Trail Energy.”

Link here for detailed information on the accreditation and services offered by Eco, or visit www.anab.org.

About ANAB

Launched in 2008, ANAB’s accreditation program for GHG/verification bodies oversees the competence and professional conduct of third parties responsible for verifying the accuracy of emission attestations and applies to a broad spectrum of industries. For more information, visit www.anab.org.

About EcoEngineers

EcoEngineers (Eco) is a consulting, auditing, and advisory firm with an exclusive focus on the energy transition. From innovation to impact, Eco helps its clients navigate the disruption caused by carbon emissions and climate change. Eco helps organizations stay informed, measure emissions, make investment decisions, maintain compliance, and manage data through the lens of carbon accounting. Its team of engineers, scientists, auditors, consultants, and researchers live and work at the intersection of low-carbon fuel policy, innovative technologies, and the carbon marketplace. Eco was established in 2009 to steer low-carbon fuel producers through the complexities of emerging energy regulations in the United States. Today, Eco’s global team is shaping the response to climate change by advising businesses across the energy transition. For more information, visit www.ecoengineers.us.

Forbes | The Path Forward: Examining The Complexities Of R&D In Clean Energy

The following is an article originally published February 1, 2024, by Forbes.

The Path Forward: Examining The Complexities Of R&D In Clean Energy

By Shashi Menon, EcoEngineers

As the head of a consulting firm with a focus on energy transition, the conversation around the allocation of resources to nascent clean energy projects is of paramount importance to me.

While the growing support for clean energy initiatives is commendable, there is often an underlying concern about the fiscal prudence of backing projects with commercially unproven technologies. However, I believe that it’s crucial for business leaders to recognize how applied research and development (R&D) plays an important role in the long term for clean energy and how failures can be just as important as successes.

Applied R&D is inherently a trial-and-error process. History has shown us that many of the essential fuels and chemicals we rely on today, from gasoline to various plastics, have been born from the ashes of R&D projects that initially failed.

Innovating For Tomorrow

Among R&D World magazine’s 2023 R&D awards finalists, several promising clean energy innovations are highlighted, ranging from new motor drives for hybrid electric aircraft to novel systems for capturing carbon dioxide (CO2). These finalists represent just a fraction of initiatives aimed at improving human safety, comfort and environmental sustainability.

Admittedly, the science behind each of these innovations is complex, and if it were simple, we would already be employing these technologies instead of investing considerable resources to refine and validate them.

Can Profit-Driven Innovation Help Solve The Energy Crisis?

Despite efforts to curb energy consumption and transition to cleaner sources, the stark reality is a continued rise in global CO2 emissions, as indicated by data from the International Energy Agency (IEA). With the world population expected to reach 10 billion by 2050, the demand for energy to support human demand will only intensify.

I believe that the quest for a solution to the energy conundrum through R&D is perhaps one of the most significant applications of capitalism. It can propel profit-motivated innovation to help discover transformative solutions akin to the discovery of penicillin. According to McKinsey & Company, the global expenditure on R&D in 2019 was around $2.3 trillion, with the pharmaceutical sector leading the investment. In contrast, they found that the energy sector is at the lower end, investing approximately 3% of its earnings into R&D.

The Crucial Role Of R&D Funding

Whether it be through advancements in direct air capture of CO2, improved solar panels or more efficient heating and cooling systems, business leaders should understand how investment in applied R&D remains crucial to meeting the clean energy demands of a growing global population.

Much of the funding for R&D for clean energy stems from taxpayers. I see this investment by society as a recognition of R&D’s intrinsic value for maintaining global competitiveness. Through this, leaders can take advantage of initiatives like the Inflation Reduction Act and its allocation of nearly $400 billion for developing clean energy solutions.

While the U.S. share of global R&D expenditures decreased from 69% in 1960 to about 31% in 2020, I see this as more a reflection of the increase in global competition. As other countries have realized the critical role of R&D in their competitive edge, they have increased their investments accordingly. There is still plenty being invested by the U.S. government for those looking to utilize public funds for their R&D.

Charting The Course

I believe that in focusing your R&D investment. it’s important to find ways to incentivize investment in areas more likely to generate success and redefine our relationship with energy. This includes direct air capture technologies, the development of biomaterials and elsewhere.

Practicality

One piece of advice to make R&D more productive is to make sure to be realistic about the process and product development timing and costs. Many promising renewables projects have failed because they ran out of funding during the process/product development stage. In most cases, it is better to be realistic than optimistic.

When focusing your R&D budgets on alternatives to burning petroleum for energy, you can take advantage of the opportunities provided by the Inflation Reduction Act, particularly through the Investment Tax Credit (ITC) and the Production Tax Credit (PTC). These credits enable taxpayers to deduct a percentage of the expenses associated with renewable energy systems from their federal taxes.

Bonus Credits

There are also bonus credits available for having minimum levels of domestic content, thus incentivizing American manufacturing. Under the Inflation Reduction Act, eligible taxpayers who are not tax-exempt entities can transfer all or a portion of specific tax credits, including the earlier mentioned ITC and PTC, to an unrelated party.

Research And Planning

Some words of caution: When investing in your R&D, it’s important to perform in-depth research on similar or adjacent R&D programs globally as far back as 30 years. This is often instructive and helps prevent you from “reinventing the wheel” or going down an investigative path that has already failed or fallen short.

Charting The Course

I believe that in focusing your R&D investment. it’s important to find ways to incentivize investment in areas more likely to generate success and redefine our relationship with energy. This includes direct air capture technologies, the development of biomaterials and elsewhere.

Practicality

One piece of advice to make R&D more productive is to make sure to be realistic about the process and product development timing and costs. Many promising renewables projects have failed because they ran out of funding during the process/product development stage. In most cases, it is better to be realistic than optimistic.

When focusing your R&D budgets on alternatives to burning petroleum for energy, you can take advantage of the opportunities provided by the Inflation Reduction Act, particularly through the Investment Tax Credit (ITC) and the Production Tax Credit (PTC). These credits enable taxpayers to deduct a percentage of the expenses associated with renewable energy systems from their federal taxes.

Bonus Credits

There are also bonus credits available for having minimum levels of domestic content, thus incentivizing American manufacturing. Under the Inflation Reduction Act, eligible taxpayers who are not tax-exempt entities can transfer all or a portion of specific tax credits, including the earlier mentioned ITC and PTC, to an unrelated party.

Research And Planning

Some words of caution: When investing in your R&D, it’s important to perform in-depth research on similar or adjacent R&D programs globally as far back as 30 years. This is often instructive and helps prevent you from “reinventing the wheel” or going down an investigative path that has already failed or fallen short.

 

For more information about the EcoEngineers and the services we offer, contact us at clientservices@ecoengineers.us or complete a contact form.

Red Trail Energy is First Ethanol Plant to Enter Voluntary Carbon Markets

The following was originally published March 5, 2024, by Puro.earth.

Largest Durable Carbon Removal Credit Project Registered to Date Signals New Opportunity for Capturing and Storing Biogenic CO2 from Ethanol Plants and Reducing Carbon Removal Project Financial Risks

 RICHARDTON, ND – [March 5, 2024] – Red Trail Energy, LLC (RTE), and Puro.earth today announced issuance of RTE’s carbon dioxide (CO2) removal credits on the Puro Registry, making it the first ethanol production facility to generate CO2 Removal Certificates (CORCs) in the voluntary carbon market (VCM) and the largest durable carbon removal project registered to date. RTE will be offering its CORCs through its marketing arm RPMG. 

RTE worked with clean energy advisory firm EcoEngineers to successfully register its project under the Puro Standard, the world’s leading crediting platform for engineered carbon removal. The carbon dioxide removal (CDR) credits are generated through bioenergy with carbon capture and storage (BECCS) from ethanol production in compliance with Puro’s Geologically Stored Carbon Methodology. Prior to the issuance of CORCs, RTE underwent an independent verification and successfully met all requirements of feedstock sustainability, carbon sequestration permanence and financial additionality. 

RTE sequesters CO2 from the fermentation process at its ethanol plant into a permitted underground Class VI well located approximately 6,500 feet directly beneath its facility. This carbon removal will be available as CORCs to help buyers complement their emission reduction activities in pursuit of net-zero targets. 

“We have not only achieved a groundbreaking milestone as one of the first bioenergy facilities with BECCS but have also emerged as pioneers in bringing verified CDR credits to the market,” said Red Trail Energy Chief Executive Officer Jodi Johnson. “This program strengthens our position in the ethanol industry and sets a new standard for sustainability and innovation, driving positive change and demonstrating the viability of proactive environmental stewardship within our industry.” 

Through Puro.earth and with EcoEngineers’ guidance, RTE was issued more than 150,000 CO2 Removal Certificates from the first 14 months of BECCS operation. 

“Engineered carbon removal is in its infancy and there are a great many risks for project developers. The need for high-quality removals programs, such as RTE, is undisputed in the context of our overrun global carbon budgets and the imperative to reduce carbon emissions,” says David LaGreca, Managing Director of VCM Services at EcoEngineers. “The VCM serves in this case to provide producers optionality for markets and to reduce revenue risks through diversification, consequently making such projects investable in the first place.” 

Antti Vihavainen, Chief Executive Officer of Puro.earth, said, “This is the largest durable carbon removal credit issuance to date in the VCM, marking a monumental milestone toward scaling CDR to climate-relevant levels. At Puro.earth, we remain steadfast in our commitment to establishing rigorous standards that propel the expansion, commoditization, and liquidity of durable CDR markets. The significance of RTE’s CCS project cannot be overstated, as it serves as a compelling demonstration that through stringent methodologies for carbon removal and the financial incentives from CORCs, the vital infrastructure required for large-scale carbon sequestration will materialize.” 

The Puro.earth-issued CORCs indicate 1,000-plus years of carbon sequestration durability, which provides the key environmental criteria of permanence. For traceability and transparency, CORCs are listed in the International Carbon Reduction and Offset Alliance (ICROA)-endorsed Puro Registry where their complete lifecycle is recorded, from issuance to retirement. 

RTE is a 64 million-gallon-per-year corn ethanol production facility that captures and stores biogenic CO2 from its ethanol fermentation process. The first facility permitted under state primacy to capture and store CO2 in a Class VI well, with an estimated annual output of 180,000 tons. RTE captures the biogenic CO2, which would otherwise be vented into the atmosphere, and injects it for permanent storage into an underground Class VI well beneath its facility. RTE has continuous efforts in place to ensure that the fossil footprint of their main product, biofuel, is reduced through energy efficiency measures and reasonable agricultural practices. 

CORCs generated in accordance with rigorous scientific and market requirements, including additionality and permanence, may supplement other incentives. RTE made an additional investment in first of its kind application of proven technology infrastructure to capture and inject the CO2 considering future revenue from carbon removal credits. CO2 Removal Certificate sales in voluntary markets are necessary to support building out CCS projects while reducing carbon removal project financial risks. 

About Red Trail Energy 

Red Trail Energy, LLC (RTE), located near Richardton, North Dakota, is an investor group that has established a corn-based ethanol production facility. Operational since January 2007 with a $99 million investment, RTE employs 47 staff with a $4 million payroll. Initially a coal-fired plant, it switched to natural gas in 2016. Annually, RTE uses 21-23 million bushels of corn to produce 59-64 million gallons of ethanol, also generating significant amounts of dried distillers grain, modified-wetcake, and corn oil. With a complex spanning 100,000 square feet, the facility includes a range of structures for various production stages and has implemented cutting-edge processing technologies. RTE is overseen by a 7-member board and has been recognized for its economic and environmental impact in North Dakota, receiving accolades from the Central Stark Soil Conservation District. RTE’s mission is to enhance economic outcomes by transforming local corn into ethanol and value-added products. 

About Puro.earth 

Nasdaq-backed Puro.earth is the world’s leading carbon crediting platform for engineered carbon removal. Its mission is to mobilize the economy to reward carbon net-negative emissions by helping voluntary corporate buyers accelerate carbon dioxide removal at an industrial global scale. Puro Standard creates carbon credit methodologies for processes that remove carbon dioxide from the atmosphere for at least 100 years. It then certifies suppliers that run those processes and issues digital, tradable CO2 Removal Certificates (CORCs) into the public Puro Registry per metric ton of carbon dioxide removed. CORCs are purchased in the voluntary carbon market directly from suppliers or via sales channel partners by ambitious corporations like Microsoft, Shopify, and Zurich Insurance, to help reverse climate change and neutralize residual carbon emissions. Puro Accelerate is a program to scale the carbon removal ecosystem, assisting suppliers who require financing to launch or expand operations through CORC advance market commitments and prepayments. 

About EcoEngineers 

EcoEngineers is a consulting, auditing, and advisory firm with an exclusive focus on the energy transition. From innovation to impact, Eco helps its clients navigate the disruption caused by carbon emissions and climate change. Eco helps organizations stay informed, measure emissions, make investment decisions, maintain compliance, and manage data through the lens of carbon accounting. Its team of engineers, scientists, auditors, consultants, and researchers live and work at the intersection of low-carbon fuel policy, innovative technologies, and the carbon marketplace. Eco was established in 2009 to steer low-carbon fuel producers through the complexities of emerging energy regulations in the United States. Today, Eco’s global team is shaping the response to climate change by advising businesses across the energy transition. EcoEngineers is an American National Standards Institute’s National Accreditation Board (ANAB) accredited greenhouse gas (GHG) verification body. 

About RPMG: 

RPMG is a Minnesota based bioethanol marketing company. For over 25 years, RPMG has been a leading supplier of low carbon bioethanol, DDGS, DCO, high purity alcohol, and Altipro across North America. RPMG has a best in class logistics department that creates value in the supply chain for its marketing partners and end customers. With an in-house compliance department, they have expertise in regulated markets, carbon compliance markets, and carbon reduction initiatives. 

Contacts:

For Puro.earth
puro@gongcommunication.com
+44 7904304983

For EcoEngineers
marys@astorystore.com
312.218.4508

Europe Requires Imported Steel and Iron to Report Carbon Emissions

The following is an article originally published in the November/December 2023 issue of Steel Times International.

Europe Requires Imported Steel and Iron to Report Carbon Emissions

By Urszula Szalkowska

In May 2023, the European Union (EU) implemented the Clean Border Adjustment Mechanism (CBAM), a groundbreaking regulation to control embedded emissions in imported goods, including steel and iron.

CBAM requires importers in the EU to measure, monitor, and report greenhouse gas (GHG) emissions embedded in imported products. It will subject foreign manufacturers to the same emissions limits as domestic manufacturing within the European Union.

A wide array of manufacturing outside EU borders, including foreign producers of metal roofing, frames, vehicle parts, trains, pipes, nuts, bolts, etc. will all be impacted. Importers must accurately identify whether their imported products fall under the specific Combined Nomenclature (CN) codes, which are the EU’s version of HS (Harmonized System) codes for international trade classification.

The initial implementation of CBAM, in addition to steel and iron, requires cement, aluminum, fertilizers, and hydrogen imports to report emissions as well.

During the transition period of CBAM, which spans from October 2023 to December 2025, importers are required to report direct and indirect emissions resulting from the production of imported goods and the production of input materials (precursors). Detailed reporting is specified for steel and iron, covering, among others, fuel combustion, reduction of iron and steel by reducing agents, from the thermal decomposition of carbonate raw materials, heating, and cooling.

Direct emissions must be correctly attributed to imported products; importers should also report quantities of raw or semi-finished material inputs and determine embedded emissions of these precursors (see Figure 1). The regulation also recommends that foreign manufacturing facilities voluntarily have their emissions data and embedded emissions data verified by independent verifiers.

CBAM Embedded Emissions

From 2026 onwards, if a carbon price has been paid by the foreign manufacturer in a foreign country, for producing goods and precursors, it may lead to a reduction in CBAM prices. During the transitional phase, information on foreign carbon taxes must be reported by the importer, so the European Commission can analyze the data and avoid double taxation as CBAM enters the definitive period in 2026.

If no information is reported, it will be assumed that there were no carbon taxes on the goods and precursors in their country of origin.

Leveling the Playing Field and Addressing Carbon Leakage 

The EU’s Emissions Trading Scheme (ETS) was the world’s first emissions trading program, and it has resulted in approximately a 35% reduction in emissions within the EU since 2005. However, it only tells a partial story. The full story is that many industries fled ETS’s regulatory requirements and set up shop outside EU borders – and they continued to manufacture and export to the EU without reducing their emissions and without penalty.

Thus, manufacturing facilities in countries with lax environmental regulations gained an advantage over EU industries that were subject to more stringent GHG-reduction requirements.

To prevent this carbon leakage, the EU had initially relied on free ETS allowances for industries deemed at risk of flight. However, critics argued that this approach compromised the goals and principles of the EU ETS and failed to reduce the carbon intensity (CI) of foreign manufacturing. In fact, Europe became the largest importer of CO2 emissions embedded in imported goods, a major obstacle to becoming a carbon-neutral continent by 2050. CBAM attempts to fix this problem and level the playing field between domestic and foreign manufacturing with respect to emissions. 

CBAM Complexities and Timeline

The CBAM system tries to mirror the EU ETS.

Starting in 2026, importers will be required to purchase CBAM certificates for the embedded carbon in steel imports that are above the limits set by the rules less any carbon price was paid in the country of origin. The price of a CBAM certificate will be based on the weekly average price of the EU ETS allowance. An independent accredited verifier must verify the reported emission’s accuracy. By May 31, importers will surrender the purchased CBAM certificates and thus ensure all the steel and iron consumed in the EU has the same emissions from manufacturing.  

Acknowledging the challenges associated with implementing such a complex rule, the EU is requiring importers to only report data in 2024 and 2025 without a requirement to purchase CBAM certificates. Steel and iron importers are required to submit their first reports by January 31, 2024.

During the reporting period, importers can use emissions calculations from foreign countries to report embedded emissions, but starting in 2026, the EU calculation methodology with its emissions factors must be used.

Unilateral Regulatory Globalization and CBAM Reach 

CBAM exemplifies the EU’s approach to unilateral regulatory globalization, a concept that has been called The Brussel’s Effect. Instead of negotiated standards under treaties or international agreements, the EU uses its buying power to externalize its regulations beyond its borders through market mechanisms.

The CBAM regulation indirectly dictates how foreign producers must measure their emissions. While reporting requirements are binding for importers in the EU, the regulation also impacts operators in third countries, who are required to provide the importers with relevant emissions data. This impact on economic operators in third countries highlights the far-reaching effects of the EU’s climate policies.

CBAM also demonstrates how carbon markets are maturing and becoming globalized. It is not unusual for foreign producers to place an EU-specific quality or safety label on automobiles, electronics, or food that is being exported for European consumption, but it is a first for carbon emissions. CBAM will require an EU-specific “low-emissions” label on steel and iron. As more manufacturers across the globe comply with these rules, it will have a far-reaching effect on global steel supply chains.

As the CBAM enters into force, foreign steel and iron companies must navigate the complexity of the system and its timeline to ensure compliance. Understanding these key requirements and the depth of the regulation is crucial for exporters looking to participate in the EU markets.

For more information:

For more information about CBAM or other EU climate policies and programs, please contact Urszula Szalkowska at uszalkowska@ecoengineers.us.

Urszula Szalkowska is based in Poland and is the managing director and senior consultant, Europe for EcoEngineers.

CCS and the VCM: Voluntary Carbon Markets Accelerating Climate Action

The following is an article published in Issue 2, 2023 of Carbon Capture Magazine.

CCS and the VCM: Voluntary Carbon Markets Accelerating Climate Action

By David LaGreca, Voluntary Carbon Markets Services Director

While the Inflation Reduction Act (IRA) has paved the way for a dramatic increase in investment in carbon capture and sequestration (CCS) solutions for heavy-emitting industries, the funding from these incentives frequently falls below the total cost to deploy these systems. At the same time, the entire raison d’être for the voluntary carbon markets (VCM) is to make CCS projects financially viable. The marriage of financial incentives from public sector financing and the VCM is an important, if not imperative union in getting many CCS installations off the ground and fully realizing the potential of these technologies in the near term. Often, companies are so focused on the regulated markets and tax incentives, that these funding streams are overlooked and underutilized in the financial stack to get to the final investment decision (FID).

According to the U.S. Department of Energy (DOE), capture costs for industrial-scale CCS projects range from $140/metric ton for ethanol, gas processing, and hydrogen steam methane reforming (SMR), up to $1,700/metric ton for coal power plants.1 Section 45Q of the IRA provides for a maximum of $85/metric ton, leaving an obvious hole in the justification for investors and companies in nearly every sector endeavoring to reduce their emissions through carbon management. Though much less certain in terms of willingness to pay for a metric ton of carbon sequestration, the international marketplace is currently starved of industrially sourced, readily quantifiable carbon credits to be used for environmental, social, and governance (ESG) reporting and carbon footprint reductions. The Carbon Neutral Buyers Alliance, Mitsui, and others have incorporated CO2 credits generated from CCS into claims of “carbon neutral liquified natural gas (LNG)”. Similarly, UK-based energy utility, Drax, inked a memorandum of understanding (MOU) with Respira for the sale of upwards of two million of their bioenergy carbon capture and storage (BECCS) credits to be issued this decade. While under scrutiny, this is a clear signal that there is a demand for such credits generated from CCS, be it biogenic or fossil in origin.

A McKinsey & Company analysis from 2022 states that carbon capture, utilization and storage (CCUS) uptake needs to grow 120 times over by 2050 for countries to achieve their net-zero commitments.2 Whereas their analysis somewhat downplays the relevance of voluntary markets in driving financing to these new projects outside of more niche, carbon dioxide removal (CDR) categories such as BECCS and direct air capture (DAC), they are presently attracting bids for credits (ex-ante in many cases) in the range of $300/metric ton and $1,200/metric ton, respectively. These prices are leading to a rapid entry into this space by registries, project developers and investors alike. Though likely not a mainstay for funding throughout the lifespan of these projects, agreements for the offtake of voluntary carbon credits may be a key factor in going from design to implementation in many cases.

Unlike commodity markets (i.e., crude oil or corn) and regulated credit markets (i.e., Low-Carbon Fuel Standard or EU’s Emissions Trading Scheme), VCMs have wide-ranging prices for credits emanating from similar project types. As many transactions are inherently bilateral, taking place over the counter between a developer and an end-user (think Microsoft offsetting their historical emissions), projects are frequently valued on their nuances as much as their atmospheric benefit. In the case of CCS activities, the most apparent distinction is between carbon avoidance (point source capture) and carbon removal (CCS from biogenic feedstock). Though capturing CO2 from any operation is, in essence, preventing emissions from entering the atmosphere, capturing emissions from combusted organic material has, due to photosynthesis, the indirect impact of reducing net carbon in the atmosphere. This biogenic differentiator propels these projects into a higher echelon of pricing in the current market as they are being treated as “carbon removals.” Other project characteristics come into play as well in the VCM, such as general sentiments towards fossil fuels and whether credits purchased from projects are effectively subsidizing their continued profitability.

In contrast and in addition to CCS projects that register their activities for harvesting 45Q and other tax incentives under the IRA, projects registering in the VCM must go through a rigorous process involving disclosure and proof of project activities to independent assessment bodies. This process requires the development of traceable data systems to be audited by both a third-party verification body and an independent registry for credits to be issued and legitimized. At present, few CCS crediting pathways exist, including under the Puro.earth standard and the California Air Resources Board (CARB), with the former for crediting CO2 removals and the latter for fuel carbon intensity (CI) reductions. On the horizon are comprehensive protocols to be released by the American Carbon Registry, the Verified Carbon Standard, and numerous jurisdictions globally. Because VCM crediting is an incentive mechanism, project proponents must show that they require the funds from credit sales, or that they have overcome other substantial, non-financial hurdles, to qualify. Whereas the U.S. Environmental Protection Agency (USEPA) Class VI well permit places a strong, primary focus on water quality along with other components, VCM protocols also emphasize the notions of additionality, permanence, life cycle emissions, co-benefits and environmental harm. These differences illustrate how federal incentives are complementary to voluntary incentives and allow for many of them to be at times “stackable” rather than exclusive to one another.

Entities involved in renewable fuel production can leverage federal, state, and voluntary incentives to establish a differentiated profile of revenue streams. A U.S. ethanol plant with carbon capture installed may, for example, apply for multiple outlets for their low-carbon intensity (CI) fuels, as well as the carbon attributes. Double counting of attributes is not the intention here, but rather a doubling of available sales outlets for fuel and its climate benefits. In these installations, the fuel may be sold, with or without the CI reduction from CCS, into Canada’s Clean Fuel Regulation (CFR), Clean Fuel Programs into Washington and Oregon, California’s LCFS or to voluntary markets. When the CO2 value is sold separately, it provides for the opportunity to garner the absurdly high CDR credit prices on the VCM as is the case in the market today. This approach of maintaining multiple outlets for revenue, selected by the winds of market prices across all the pathways available, is what we call “optionality.” This is a key and underutilized financial benefits for many companies.

CCS is an environmental imperative, according to the Intergovernmental Panel on Climate Change (IPCC). Between 300-600 gigatons (Gt) (or 1 billion metric tons) of CO2 must be cumulatively captured and stored between now and 2100, in conjunction with a massive drawdown of emissions, to maintain our climate within the 1.5°C threshold for heating established in the Paris Agreement. For this level of activity to transpire across the energy and industrial sectors, both governments and the private sector will need to drive substantial finance using multiple methods of incentives. Where governments fall short in terms of ambition and regulation, it is up to the VCM to step in to fill gaps, as it has done for more than 30 years.

1 US Department of Energy. 2023. Pathways to Commercial Liftoff: Carbon Management.
2 McKinsey & Company. 2022. Scaling the CCUS industry to achieve net-zero emissions. October 28, 2022.

voluntary carbon markets
David LaGreca

 

For more information about our VCM services, contact:

David LaGreca, Voluntary Carbon Markets Services Director | dlagreca@ecoengineers.us

Bridging the Gap: Connecting Carbon Markets From the Farm Gate to Fuel

The following is an article originally published in the September/October 2023 issue of Ethanol Today.

Bridging the Gap: Connecting Carbon Markets From the Farm Gate to Fuel

By Mark Heckman, Strategic Development Director (U.S. Biofuels)

What will it take to connect a carbon market from the farm gate through to food and fuel production and link it to downstream markets? This question strikes a chord with me on a deeply personal level. You see, I’m not just writing about this issue as an observer; I’m living it every day on our farm in eastern Iowa.

For years, I’ve been putting sustainable farming practices into action in the form of cover cropping, no-till farming, and responsible use of hog manure and overseeing our cow-calf operation. In 2014, our operation started cover crops on 40 acres with the encouragement of my son. Since then, the reward of increased yields and improved soil health has grown, and so has the removal of carbon dioxide (CO2) from the atmosphere in the process.

However, while I’m reducing carbon emissions on my farm, those carbon savings haven’t been monetized to their full potential. The methodologies and tools needed to quantify and verify these carbon reduction activities exist, but the broader infrastructure to connect these carbon-saving practices to markets is in its infancy. Agriculture needs to bridge this gap and create a thriving carbon market that recognizes and rewards farmers like me who are actively reducing carbon emissions from the farm gate onwards. 

The GREET model is one of the leading models in this field for calculating carbon intensity (CI). Leveraging its knowledge of the GREET model for assessing the Life-Cycle Analysis (LCA) of agricultural products and biofuels, EcoEngineers has been instrumental in crafting robust, science-driven methodologies for a wide range of new technologies – ranging from corn kernel fiber and CO2 capture to seaweed and renewable biogas. To maintain the integrity of carbon markets, independent third-party verifiers will also play a crucial role in providing reliable, science-based, and transparent methodologies to ensure the credibility of carbon reduction claims and activities that are being made.

To bring this all together for the industry, the support of a sponsoring agency like California’s Air Resources Board (CARB) or associations like the American Coalition for Ethanol (ACE) can be a game-changer. These entities can provide valuable guidance and standards to ensure the success of carbon reduction programs on farms and downstream fuel markets.

Farmers and downstream fuel producers are at the heart of this endeavor. By gathering high-yield crops and engaging in sustainable farming practices, we have a unique opportunity to centralize carbon-saving efforts.

When we leverage technology, develop transparent methodologies, garner multi-stakeholder support, engage ethanol producers, employ third-party verifiers, and expand carbon markets, we can ensure farmers like me are stewards of the land and recognized contributors to carbon reduction efforts. 

bridging the gap carbon markets
Mark Heckman

 

For more information about our Ethanol and Biodiesel services, contact: 

Mark Heckman, Strategic Development Director (U.S. Biofuels) | mheckman@ecoengineers.us 

Forbes: Should You Outsource Your Sustainability Services?

The following is an article originally published July 21, 2023, by Forbes.

Should You Outsource Your Sustainability Services?

By Shashi Menon, EcoEngineers

In today’s business world, many functions are outsourced. For example, at my company, we outsource payroll, IT, legal services and taxes because of the highly specialized knowledge required to do the tasks and the economies of scale achieved by the vendors. It doesn’t make sense for us to hire a full-time, in-house attorney with expertise in contracts, employment law, litigation, etc., when there is a buffet of highly specialized lawyers I can access through one relationship with a law firm—and I can rely on them as needed.

A similar theme is emerging in sustainability services. As an expert in providing outsourced CSO services, my company and others in the space help firms achieve their sustainability goals.

One of the biggest challenges faced by businesses today is finding people to assimilate all the knowledge needed to maneuver the energy transition, which places increasing pressure on businesses to reduce emissions, promote circularity and track sustainability. According to LinkedIn’s Global Green Skills Report 2022, demand for “green skills” is outpacing supply, and the specialization of “green skills” is proliferating—from climate and renewable energy to environmental awareness and corporate social responsibility.

Companies are responding to this need by appointing a chief sustainability officer, or CSO, who is expected to lead the response to the energy transition. The skills required to do this are complex, technical and often beyond the abilities of one person. It requires engineers, legal experts, market analysts, investment bankers and project managers.

Outsourcing CSO services, like outsourcing legal and accounting, allows businesses to access specialized sustainability experts. Outsourced CSOs can provide sustainability, business strategy and operational guidance related to the energy transition.

Making The Decision To Outsource

Whether you are leading a small startup or a large publicly traded firm, here are several instances where outsourcing CSO services can be an effective way to address some of today’s carbon challenges:

  • New climate startups: You have launched a successful business model and are fortunate enough to be juggling multiple balls—hiring and training, sales and business development, investor relations and more. Your leadership team may not have time to keep up with global climate policies, emerging incentive programs, new competing technologies, evolving carbon markets, data standards and carbon accounting rules.

  • Small or midsized privately held businesses: You have loyal customers who like your products or services, and you are growing steadily in a stable environment. Recently, these customers have been asking casual questions about the company’s sustainability efforts. The leadership team doesn’t have the time or the baseline knowledge to analyze the company’s sustainability.

  • CEOs or CFOs: It’s time to update investors and shareholders about profit margins, strategic plans and key performance indicators, and they also want to see an analysis of energy transition risks and climate risks. As a believer in risk-averse governance, you know you should include this in your quarterly report, but you are not clear where to start.

  • One-person sustainability departments: Pressure from the board and upper management has forced one person to research and respond to a variety of questions over the years, and their role has evolved to include “sustainability expert.” But the questions are becoming more complex and overwhelming. A climate scientist, a policy analyst and a process engineer are needed on the team to fully respond to the situation, but the budget doesn’t allow this.

Of course, outsourcing a task core to a business’ strategic direction is not always a good idea. A CSO is a part of the leadership team and has access to confidential information that is key to a company’s success and competitive advantage, which are not things that can be shared with an outside firm before establishing a high level of trust. In these cases, it is better to plan to have an in-house CSO who can incorporate these business secrets into a long-term sustainability strategy.

Getting Started With An Outsourced CSO

The CSO is usually key to building the company’s “green team” that has the passion for facilitating the energy transition and the specialized skills needed to perform the critical analysis needed. If you are outsourcing a CSO, make sure you have established an internal team with diverse skill sets; these include climate scientists, market analysts, process engineers, policy advisors, etc.

The energy transition requires a business to rethink how it’s doing business, and a CSO must frequently interact with purchasing, marketing, legal, accounting and operations, and talk their language.

A key CSO function is communicating complex technical concepts in simple language. Ask your CSO to conduct an analysis of the risks and opportunities your business faces, so when a customer or an investor casually asks what you are doing on the sustainability front, you can give a clear and confident response.

CSOs lead a company’s response to the energy transition: Look for someone who is unbiased, data-driven, aspirational in their approach, has a strong grasp of internal and external stakeholder needs, and a peer network that includes policy analysts, engineers, auditors, carbon life cycle experts, etc.

The biggest challenge in deciding whether to outsource the CSO function is how to integrate someone external into the day-to-day details of your team’s workflow. Should you give them a company email? How much confidential information should you share? Who should be the main point of contact internally for the outsourced service? Each company has to develop its own processes to govern the level of outsourcing it wishes to put in place.

Some companies starting fresh on the energy transition journey need a temporary leader with a full team of external technical resources that they can use as needed. Others, further down the path, may have an internal CSO on the team, but they need to outsource technical expertise and receive policy briefings and technical analyses, as needed.

Outsourcing the CSO function can make it easier for businesses to make sustainability and strategic decisions. An outsourced CSO can analyze the risks and opportunities a business faces due to climate policy, carbon pricing, consumer preferences or even severe weather events, so when a customer or an investor asks what you are doing on the sustainability front, you can give a clear and confident response.

For more information about the EcoEngineers and the services we offer, contact us at clientservices@ecoengineers.us or complete a contact form.