Sustainability Transformation: Harnessing the Power of Environmental Commodities
Have you ever heard of environmental commodities? As we know, commodities are raw materials in the form of physical goods that can be bought or sold on the commodities market. Unlike traditional commodities, environmental commodities are a new type of asset that represents tangible environmental benefits. This is the current form of solution that is gaining high traction with the emergence of environmental degradation.
Environmental commodities are assets developed by adopting sustainable practices that show proven environmental benefits like emission removal or reduction. These commodities are presented in different forms, such as carbon credits, renewable energy certificates (REC), International Renewable Energy Certificates (IRECs), and water rights. In this blog, let’s explore carbon credits as environmental commodities.
What Are Offset Credits?
Carbon credits represent the most common environmental commodities that are gaining interest in many businesses. Carbon credits represent the reduction or removal of the amount of greenhouse gas emission from the atmosphere. One ton of carbon dioxide equivalent (CO2e) emission reduced or removed equals one credit. Carbon offset markets determine the value of carbon credits. These markets provide a platform for entities that generate emissions to purchase credits and offset their environmental impact. Carbon markets set prices for carbon credits, which vary based on factors like project type, location, and emission reduction verification.
Type of Carbon Credit?
Carbon credits are a valuable tool for mitigating climate change. They represent a quantifiable reduction in greenhouse gas emissions achieved through various projects. These projects, known as carbon offsetting projects, can involve various methods to reduce, capture, and store emissions. There are two primary methods to obtain carbon credits.
| Nature-Based Solutions (NBS) NBS involves harnessing natural ecosystems to capture and store the carbon in its natural form. This we call natural carbon sequestration or carbon sink process. Natural carbon sequestration happens through forestry, agroforestry, reforestation, afforestation, and planting trees. Carbon can also be naturally stored by wetlands or through marine conservation like mangrove restoration. |
| Technology-Based Solutions (TBS) TBS offers innovative technological solutions that help reduce and remove carbon emissions. These solutions often involve advanced technologies to directly capture or prevent greenhouse gas emissions. Additionally, TBS solutions like waste-to-energy technology can also contribute to high-value carbon credits. For example, methane capture from oil palm effluent and its conversion into electrical energy is one of the scalable carbon offsetting projects gaining significant attention. |
How Offset Credits Are Generated
Once a carbon offset project is developed, it undergoes a rigorous validation and verification process to assess its emission reduction potential. This process involves thorough audits to ensure the project meets the standards set by the carbon market and that robust measurement, reporting, and verification systems are in place. Upon successful verification, carbon credits are issued and traded on the carbon market.
Environmental and Economic Benefits of Offset Credits
Carbon offset projects provide a valuable tool for addressing unavoidable emissions and promoting business sustainability. While many companies face challenges in accounting for their residual emissions, these projects offer a direct path to balancing their carbon footprint. By investing in carbon offset projects, businesses can contribute to ecosystem preservation through initiatives such as reforestation and waste-to-energy solutions. For example, converting biomass waste into biochar can be used to cover plantation soil, reducing evaporation, conserving water, and improving soil health. This approach allows businesses to demonstrate their commitment to environmental stewardship and biodiversity preservation.
Beyond the environmental benefits, participating in carbon reduction and removal projects can also enhance a company's brand image. By associating with eco-friendly products or services, businesses can attract more potential investors and expand their reach into international markets.
Carbon Bank: Reimagining Sustainability Together
At Carbon Bank, we're more than just a carbon credit project developer. We're your strategic partner in driving meaningful environmental impact. We guide businesses by identifying, developing, and implementing high-quality carbon offset projects. We are also providing expert advice to carbon credit buyers, helping them select projects with strong Measurement, Reporting, and Verification (MRV) standards. We are welcoming corporations to leverage our connections to access a wide range of high-quality carbon credit projects. Join us in shaping a sustainable future. Together, we can make a real difference.