THE CARBON MARKET:
Managing the Risks
&
Capturing the Opportunities
Measurements that Matter™
Green Filter Initiatives:
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Presentation Overview
To review the Carbon Market, Offsets, and Credits
Address Regulatory and Reporting Issues
The Jomini Response: Measurements that Matter™
•
Develop the Strategy: Risk or Reward
•
Eliminate the “GreenWash”
•
Marketing Advantage, Economic and Positional Value:
The ROGI™
•
Strategies in Action: Case Study (MotorSilk™, IIG,
Canadian Tire, AAF)
Questions
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Key Principles
Green Demand Continues to Grow
•
Increasing consumer demand for green products and greener operations
creates significant market opportunities- strong economic drivers
•
The pursuit of profits and the aversion to the cost of energy and volatility
of fuel prices
Going Green Requires Collaboration
•
Greener product creation affects everything
•
R&D processes to manufacturing, supply chains, packaging, marketing
and infrastructure—as well as relationships with customers, partners and
shareholders
Proactive and Progressive Steps are Key
•
Avert legislation, regulation and consumer backlash and promote a green
image
Corporate “Peer-to-Peer” Pressure
Productivity and Efficiency = Cost Benefit
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Carbon Market Review
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Kyoto Protocol: Greenhouse
Gases Targeted
Green House Gas (GHG)
Description
Carbon Dioxide ( CO2)
By far the most important GHG .
Generated from burning fossil fuels and
deforestation.
Over 80% of US GHG emissions comes
from CO2 generated from burning fossil
fuels
Methane (CH4)
Comes from landfills, coal mines, oil and
natural gas operations, and agriculture.
Nitrous oxide (N20)
Emitted from the use of nitrogen fertilizers,
from burning fossil fuels and from some
industrial and waste management
processes
Sulfur hexafluoride (SF6)
Used in the electrical insulator, freezing
agent, heat conductor.
Hydroflurocarbons (HFCs) and
Perfluorocarbons (PFCs)
These are groups of gases Used as
alternative to ozone -depleting CFCs in
refrigeration systems
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Carbon Market Review
Discussion from Earth Summit (1992)
Kyoto Protocol (1997)
•
Gov’t of Canada responsibility: GHG Quantification and Reporting of
GHG Emissions and Removals Standard
•
Adoption of ISO 14064 Standard at COP/MOP 2005
•
Process ‘sold’ to CSA: accepted by International bodies, i.e. GHG
Protocol, ASTM, trading platforms etc.
Clean Development Mechanism (CDM): International Trading
EU ETS: 2005: Growing pains to 68% world market
World market (2009): €136 Billion (€ 11.40 weighted average)
Chicago Climate Exchange/RGGI/CAR; Alberta*, BC
Pending Legislation/Copenhagen Accord
Voluntary Reporting: Carbon Disclosure Project (CDP)
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Carbon Offsets
There are 2 fundamental types of
carbon instruments :
•
•
Allowances
Project-based credits
Allowances are generally used for
compliance with government schemes
An allowance is a permit to emit a
quantity of CO2e (normally 1 tonne)
Project-based credits can be used for
both compliance and voluntary
activities
A project-based credit represents an
emission reduction below a baseline
(‘business as usual’)
Most credits / allowances are NOT
interchangeable with each other for
regulatory purposes
Prices vary widely between instruments
2008
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2008
2012
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Trading and Use
Of Offsets
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National Trends:
Legislation vs Regulation
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The Perfect Storm:
Congress, EPA, Corporations
and the Consumer
Increased Scrutiny – Regulatory/Public concern on emissions
07/12/09:
Massachusetts vs. EPA formally declares CO2 a
“Dangerous Pollutant”
•
Mandatory reporting requirements at 25K tonnes (4,500 passenger vehicles)
•
Annual emission reports starting in 2011 for the calendar year 2010 (13k
facilities)
02/23/10: EPA announces Phased Approach to Regulation
•
Targeting large facilities in early 2011; medium-sized emitters Q3 2011;
smaller emitters 2016
•
Consideration now to raising the emissions thresholds in its proposed
“tailoring” rule to exempt more facilities
02/12/10: U.S. Securities and Exchange Commission’s issues
new climate change disclosure guidance
•
Business must now report on how climate change will impact their businesses
and how it poses new challenges for them
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Converging Forces:
Canada and the United States
06/10/09: Canada issues rules for claiming GHG emissions or
“offsets” that will form the basis for a national carbon market
•
Federal System is to complement and not duplicate Provincial Market
•
Based on Provincial methodologies, ISO, and CDM Standards
07/20/09: Canada sets deadline for emissions reporting:
•
Emitters to report 2009 emissions by June 2010
•
Facilities in excess of 50,000 tonnes GHG emissions to report
•
Alberta moved to same threshold reporting target
31/01/10: Announced Copenhagen Accord Targets
•
“Harmonized” approach with the US
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North American Regional
Initiatives
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Regional Cap & Trade
Programs
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Pre-Compliance “Offsets”
Project-type
Pre-Compliance Protocol
Afforestation
Creation of a forest where none has existed
since at least 1990
Landfill Gas Capture and
Combustion
Capture and destruction of methane from sites
Reduced or no-tillage
Reduction in the amount of tillage on farmland
(soil management)
Wind
Generation of Electricity from Wind Energy
Forest Management
Quantification of the net benefits of activities
that sequester carbon on forestland
Wastewater Management
Capture and destruction of methane produced
from anaerobic wastewater treatment
processes and to prevent the venting of biogas
to the atmosphere
Anaerobic Biodigestors
Decomposition of Agricultural Materials
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Potential Carbon Liability
by Sector
12%
Carbon costs at $28.24* per
tonne of CO2e would equate
to at least 1% of revenue for
109 companies.
10%
8%
For the five most Carbon
Intensive sectors costs
would average between 1%
and 12% of revenue
6%
4%
2%
For 32 companies, carbon
costs would equate to over
5% of revenue.
0%
Source: Investor Responsibility Research Centre Institute
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Wal-Mart
Wal-Mart Taps CDP for Emissions Reporting in
Sustainability Index
News Release
(Little Rock, ARK, July 16, 2009) Wal-Mart's top executive said Thursday that
the world's largest retailer hope a new effort to develop eco-ratings for
products the company sells can result in international sustainability
standards that all retailers can apply to all suppliers.
Highlights:
Wal-Mart exec foresees eco-ratings for all
As Wal-Mart goes, so goes the world. When it comes to carbon emissions
reporting, the $406 billion retailer appears to be suggesting that suppliers go
through the Carbon Disclosure Project.
Additionally, Wal-Mart sees its new sustainability index leading to a universal
standard that can be applied across “all retailers, all suppliers,” said Wal-Mart
chairman and CEO Mike Duke.
“We see this as universal — this is not a U.S. standard,” Duke said during a July
16 meeting to unveil the firm’s new sustainability index.
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Jomini at a Glance
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Integrated Solutions
Technology company involved in
commercialization of new technologies
Government and Private Research &
Development
Established “Jomini Network™” as a result
of partnerships from interaction seeking or
providing unique technology
applications/services and products
Provide Solution Sets resulting in
Sustainability Opportunities based on ISO
14064 Conformance and Jomini Green
Filter™ Review
ISO 14064 Project Leadership through
Jomini Green Filter™
Development of ISO 14064 Process
Conformance Green Plans and Programmes
Deliver economic and marketing benefits
From ROI to ROGI™
International Projects: CDM in Asia, Africa
North American Regulated (Alta, BC, RGGI)
North American Voluntary (VCS, ISO)
Federal Offsets for Compliance
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Overview:
The Jomini Network &
Technology Deployments
Other Segments
Manufacturing
Automotive Parts: Magna International Inc.,
Martinrea International Inc.
Energy Efficiency Bundles and Solutions: ISO, VCS
Wind, Solar and Roofing Technologies: ISO, CAR
Automotive OEMs: Japan and Europe
Waste to Energy: CDM, JI, ISO, VCS, RGGI, CAR
Process Engineering
Forests Protection:
•
Vehicle Performance
•
4 National Government REDD Projects
Equipment Recycling
Irving Oil/ Canadian Tire
High Heat Insulation: Oil and Steel: ISO, VCS
Transportation
HVAC and Lighting Systems: ISO
Rail: Bombardier/ CN Rail/ CPR/ Amtrack
Hydrogen OEMs
Shipping/Intermodal/Rail Operations
Run-Of River Hydro: CDM, ISO, VCS, ACR
Trucking and Transport
Waste Oil Recovery
•
Large Canadian/US Fleets
Retail
Canadian Tire/Walmart/Mars
Transportation Solutions/Technology: ISO, ACR
Power Supply Solutions
Diversion and Landfill Quantification
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The “Jomini Difference™”:
A Leading Advisor
Corporate
Market Leader
International Scope & Broad environmental
Reach
Driving force in Industry Standards and
Protocols: IPOG, US Government*
Environment Compliance
Expertise in Offset Projects and Key
Verticals [Renewable Energy, Forestation,
Waste, Air Quality, Transportation]
Technology Commercialization
Access to World Markets
Significant R&D investment
Establishment of the Jomini
Sustainability Network
IP Asset Management
Expertise
Partner Management
Unique GHG Qualifications
Verdecon Capital Inc.
Proven ability to work with CDM, VCS, CAR,
ACR, EU ETS, REDD Standards
Corporate Sustainability Programmes
Strategic Marketing for Competitive
Distinction
Accelerated ROI Models & Carbon Trading
Execution
Bennett Jones, LLP: ISO Standard ‘Framers’
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Areas of Focus
Corporate Facilities Plan
Purchasing and Acquisitions
Quantify to Maximize Value from ‘Day to Day’
activities
ROI of Proposals include Carbon Market Returns
Replicate Best Practices as Green-Print for
Facilities/Operations
Assess all Energy Sources
Due Diligence to Include Environmental Risks
Infrastructure Projects
Intelligence with Environmental Regulation
Deploy Clean-Tech/e²-Bundles
Understand Supply Chain Procedures*, Transport etc.
Better Cost Management and
Operational Savings
Products that have Achieved ISO Process Conformance
R&D Activities
Offset Programmes
Unique GHG Confirmation
Assess Value of Solution from GHG
Quantification of Reductions
Meet OEM and Consumer Needs
Employee Programmes to Assist in Corporate
Objectives
Positive Economic and Marketing Returns from
Off-Setting Carbon Footprint
Deployment of Quantified and Proven Solutions
to Meet Sustainability Initiatives
Accelerated ROI Models
Renewable Energy Projects and Sources
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Emission Reduction Quantification
58.0
60
}
50
32.0
40
Emissions
GtCO2e/year
26
30
20
10
-
BAU (Forecast)
New Solutions
(Objective)
Life Cycle Assessment to Deliver
Maximum Value
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Proprietary Process &
Programmes
GHG Process Conformance
Jomini
Jomini
Environmental Environmental
Inc.
Inc.
Business
Strategy
& Planning
Project Plan
&
Assertion
GreenPrint
Assessment™
(GPA)
Independent
Third Party
Validation
Canadian
Standards
Association
Jomini
Environmental
Inc.
Independent
Third Party
Jomini
Environmental
Inc.
Project Plan
Registration
Monitor,
Report &
Register
Verification
Aggregation
Project Phase:
Making of an ERR
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GHG Credit
Exchange
Trading
Trading Phase:
Making of a VERR
Opportunity vs Risk
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Climate Risk & Opportunity:
Selected Industries
Electric
Power
Manufac- Auto &
turing Transportation
Oil &
Gas
Mining
Forestry
Agriculture
Fisheries
Healthcare
Real
Estate
◆
◆
Tourism
Regulatory Risk
Physical Risk (dependent on location)
Competitive, Reputational Risk
◆
◆
◆
◆
◆
◆
◆
◆
◆
◆
◆
◆
◆
Regulatory Opportunity
Technological Opportunity
◆
Competitive, Reptuational Opportunity
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Water
Strategic Opportunities:
Regulated Entity
Credit
Credit
Offset Aggregation
Verifer
Waste Water
Management
Credit
Reforestation
Credit
Transportation
Energy
Efficiency &
Renewables
(Wind)
Low Carbon
Fuel
Production
Energy
from
Waste/Tailings
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Reduced
or
No Tillage
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Supply Chain
“Decarbonization”
Source: 2008 World Economic Forum
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“Greenwashing” Runs Rampant
98% of Products’ Green
Claims are Misleading
ONLY 2% of products
claiming in some way to be
“green” actually measure up
The number of big box store
products making green
claims has grown 79% since
2007
“Greenwashing” has become
an international challenge
Source: TerraChoice April, 2009
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“GreenWash” or Green
Green.wash (green’wash’, -wosh’) – verb: the act of
misleading consumers regarding environmental practices of a
company or the environmental benefits of a product or service.
Substance
Spin
JEI ISO 14064, Green Filter
Initiatives™

Phony constituents (hidden
trade-off)





Who Says? (No Proof)
Clarity of Message (Vagueness)
Why Should I care? (Irrelevance)
Risk in the Market (Fibbing)
Relativism (Less of Two Evils)
Substantiate the claims and
eliminate the GreenWash
Meet ISO 14021 Guidelines
Internationally recognized for
Economic and Marketing Success
Leadership
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Marketing Value
Strengthen Competitive Position
Define/re-define Market Position Internationally
•
Competitive Differentiation
•
Meet Consumer/Client Requirements
•
Establish Leadership Position
•
Review Pricing Strategy
Establish clear leadership through increased Market-Share
Make use of “ISO 14064 Process Conformance” moniker, or
other statement depending on Standard and Registry
Ability to Register in multiple markets for Environmental
market Conformance
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MotorSilk™ - A Case Study
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Case Study
A Jomini Sales Corporation Solution
Technology developed for NASA at Argonne National Laboratory (US
Department of Energy Research Facility)
The Boron CLS Bond™, a patented
Self-renewing
High-performance
Biodegradable
Anti-corrosive
Bottom line impacting
Lubricant and surface coating
friction reduction technology
Winner:
Environmental Technology Partnership Award
R&D 100 Award
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MotorSilk™ Engine
Treatment
One-time use; passivates the metallic surface
Crystal Lattice Structure creates Boundary Layer with Co-efficient
of friction: 0.01
Delivers 8% improvement in fuel efficiency for in-use vehicles
Decreases emissions through reduction in engine wear (elimination
of wear metals)
4-8 hour drive-time to form boundary layer
Biostat/Anti-corrosive/Anti-oxidant
Displaces varnish, carbon and sludge in used equipment
Prevents deposit formation in new equipment
Solution is 100% Biodegradable
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MotorSilk™
CO2e Results
Project Assertion: High Level of Assurance: ISO Process Conformance
Calculated Results for 200,000 Kms:
•
OEM First Fill (10 years @ 20k Kms):
•
Same for Automobiles and Fleet Vehicles (Driven Kms Dependant)
•
Trucks Short Haul: 120,000 Kms
16.76 Tonnes per annum
•
Trucks Long Haul:
33.52 Tonnes per annum
240,000 Kms
3.67 tonnes CO2e
CarQuest: 6110 vehicles: 14.5% improvement in fuel efficiency
•
Currently Trading in New York: 32,000 Tonnes
•
Now aggregating for Nestlé Waters (USA), Inter-State Trucking etc.
Currently Being Deployed at Kraft (USA):
•
2500 Trucks to be treated (Class 6, and Class 8)
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Within the next 12 months many companies will change how
they engage with their suppliers
Usage of Supplier Management Processes
(% of respondents)
80%
74%
70%
70%
65%
60%
52%
48%
50%
44%
39%
40%
30%
22%
20%
10%
0%
Reward Supplier
Practices
Joint Process
Improvement
Track a Set of
Sustainability Metrics for
Major Suppliers
Require 3rd Party
Certification for Major
Suppliers
Do This Today
Will Do This in 12 Months
Source: A.T. Kearney & Institute for Supply Management
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QUESTIONS
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“Green” Winners
Sources: Bloomberg, AT Kearny Analysis
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ISO 14064 Overview
Accepted as the Standard
ISO 14064-1: Specification for Quantification and Reporting of GHG
Inventories and Carbon Footprint
•
Organization Level
ISO 14064-2: Specification for Quantification, Monitoring and Reporting
of GHG Emission Reduction and Removal Enhancements
•
Projects
ISO 14064-3: Specification for Validation and Verification of GHG
Assertions
These principles are successfully employed by Jomini to
Technologies, Products, and Energy Efficiency Applications
Across the Globe … able to meet CDM/VCS requirements
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GHG Inventories
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In The News
Going Green
Three-quarters of Canadians take into
account the environmental impact of their
actions when buying a product
The same proportion (75%) also believes
that most environmental claims are just
marketing ploys
More than 85% want standards enforced
and support labelling regulations
Far more consumers would buy green
products if they were priced the same as
standard items (40%)
Most consumers are not convinced that it
actually costs more to produce green
products
Survey showed significant opportunity for
companies that can prove their products are
eco-friendly - ISO 14064, backed by Jomini
Source:
Gandalf Group for Bensimon Byrne, Globe and Mail, July 2008
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Areas of Interest
Strategic Implications: GHG Reporting companies that complete with
more carbon efficient peers could lose market share, or risk investor
concern
Measuring Direct impacts
•
Understand “hot spots” in operations
•
Financial exposure to carbon and other environmental costs
•
Performance relative to competitors
Measuring Indirect impacts from suppliers
•
Minimize supply chain exposure
•
Risks of carbon costs due to inefficiency
Benchmark Performance
•
Carbon Footprint
Partnership and Jomini Network
•
Access to technology
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Areas of Interest
General Operations
•
Facilities/IT Management
•
Process Activities: Furnaces, Kilns, Milling, Grinding
Energy
•
Source/Usage
Waste
•
Tailings/Re-use- W2E
Water
•
Re-Use
Transportation
•
On-Site/Truck/Rail/Stand-BY
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