Market for VER
Outside of
the CCX most domestic GHG transactions are done on a direct
procurement basis by companies via corporate social responsibility
(CSR) programs or by governmental agencies in conjunction with state
or local government offset programs.
There are
already several bills proposed including the Feinstein/Carper Bill,
the Jeffords Bill and the Lieberman/McCain Bill. In response,
companies are now looking to gain first-movers advantage with their
carbon strategies by participating in the voluntary market. Credits
from these transactions are referred to as Verified Emissions
Reductions (VERs) and can conform to several alternative standards
for VERs.
TFS assists
our clients in determining the quantity of offsets needed and in
structuring purchase agreements for VERs from either domestic or
international projects.
We have a
solid track record of matching clients with projects that represent
the highest standards.
Clients who
enter VER transactions have the added advantage of developing
valuable transactional experience in the carbon marketplace prior to
the formation of any formalized regulatory regimes in the US and may
potentially gain if early credits are recognized under future
federal carbon legislation.
In 2006 TFS
Energy offset its own emissions with a purchase of 5,000 VERs from a
solar energy project in Laos. The project was verified under the
Voluntary Carbon Standard.
TFS is in a
unique position to capitalize on its dominant role in international
carbon trading which will serve as a major asset as all the
development of these regulations take hold in the domestic
marketplace.
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VER Transactions
As with the
compliance regime, there are two main types of transactions, "spot"
and "forward". Spot transactions are carried out for VERs which have
already been generated, and have completed or are in the process of
verification by an independent third-party. A spot transaction can
be arranged based on current prices, as long as VER delivery is
expected within approximately three months. Forward transactions are
carried out for VERs with a generation schedule over several years,
typically up until 2012.
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