A Pioneer of Carbon Offset Trading Looks Ahead

A Pioneer of Carbon Offset Trading Looks Ahead

On May 25, Dr. Mark Trexler joined us in a Perspectives discussion to take a look at what is happening in the financial ways to achieve carbon emissions reductions.  Thirty years ago, Mark was with the World Resources Institute, working to create carbon trading markets globally as an economic means to reward reductions. Now after a career which included working for one of the largest carbon offset brokers in the world, Mark and a partner formed The Climatographers as a web-based archive of great information on climate change, quantifying carbon footprints, and market approaches to carbon reductions.  We asked him to comment on how he sees the future of these markets and what it could mean for cleantech startups.

He had a couple of really key insights.  First, carbon offset/allowance markets are not working well to create real reductions.  Nevertheless, there is building momentum behind a massive expansion of these markets.  The markets in his view are not working well because it has hard to verify that the offsets offered actually result in a reduction in emissions that would not have occurred anyway. He said the rules for certifying a tradable offset are susceptible to varying interpretations and tend to result in questionable offsets that someone can sell.  He sees this tending to reduce the market price of offsets since buyers realize they have to buy large quantities of them to achieve measurable carbon reductions.  He believes this is the reason why the offsets traded in US markets have such a low price ($20/ton of CO2 in California, and less in the Northeast.)  The good news is that there are many established mechanisms for startups to apply to claim benefits as verified carbon offsets to reap a small amount of additional revenue.  The bad news is that the amount received may not justify the expense of going through the qualification.  In particular, most offsets are sold only a year at a time.  For there to be a consequential amount of money, the sale should be for ten or 20 years into the future.  This is not happening.  

He is disappointed that this is the way things turned out from what he and others started three decades ago.  But with all the focus on trying to achieve big reductions in the next decade or two, he foresees a number of financial institutions and traders trying to increase the volume of offsets being traded by a factor of ten or more—from hundreds of millions of tons traded per year to billions of tons and maybe with multi-year commitments.   This may put these markets beyond the reach of small players yet not improve the credibility of the offsets being traded.

Second, on reflection, he now sees that a much more certain route to achieving substantial and real carbon reductions would come through a carbon tax rather than offset trading.  This is a much less politically popular solution, but if countries are interested in the most effective ways to meet their carbon reduction goals, the carbon tax may enjoy a resurgence.  However, an effective carbon tax may be at a level of $50/ton of CO2.  That clearly would give cleantech innovators a much more competitive landscape.  That’s a big leap from the price of offsets today, and hard to see it becoming popular enough to be implemented.

We recorded the entire session and you can view it here.  Take a look at this one and all the other great videos we have cataloged of our Perspectives discussions at www.cleanstart.org.

Thomas Hall

ABOUT THE AUTHOR

Gary Simon is the Chair of CleanStart's Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.

CleanStart Sponsors

Weintraub | TobinBlueTech Valley, Revrnt, River City Bank

Moss AdamsPowerSoft.biz, Greenberg Traurig, California Mobility Center

Are You Leaving Free Money on the Table?

Are You Leaving Free Money on the Table?

That was the interesting question Lloyed Lobo asked in our Perspectives discussion on May 20.  Turns out that most tech startups are.  Lloyed is a serial entrepreneur who has established several ways to help startups succeed—and he makes them free to access.  He does a really good job and his podcast has some great guests.

The “free money” he was talking about was the federal R&D tax credit and similar ones in the states, most particularly in California.  In general, startups can get 10% of qualifying expenses back from the federal government either in the form of credits on income taxes or, since most startups don’t pay income taxes, as reductions of social security taxes paid on employees.  There is an art, however, in claiming these expenses and if care is not taken in applying for them, the claims are rejected.  He had great advice about how best to apply, and can help those who want to give it a shot.  The most important piece of advice was to document thoroughly what expenses are claimed and keep excellent records.  Applicants are subject to audit for three years and payments can be clawed back if the documentation is poor.  OK, so the money is not entirely free.  You have to work for it.  Still, it is out there and available.

One of Lloyed’s consistent themes is on the importance of choosing the right team and on the four things good company leaders should focus on.  He summarized that on our video.  Everything he said was pretty valuable, so please if you are willing to view just one of our videos, make it this one.  [LINK].

What Lloyed has to offer goes far beyond just these two insights.  He and his team have built an extensive resource to help startups grow and thrive.  His innovation was that people were less inclined now more than ever to attend a two-day conference and listen to two dozen speakers, no matter how good they were.  The Covid Zoom experience has converted people to a preference for bite-size chunks of information.  Lloyed used to do an annual Traction Conference in the traditional way.  No longer.  He has now taken his blue-ribbon list of speakers and makes them available on twice-weekly free podcasts.  While this is not focused on clean tech specifically, it does apply to any tech startup.  Check out the list of recent podcasts you can call up on the Boast website. Here are some sample titles:  

      • Ten Secrets to Building a Billion Dollar Company
      • The Playbook to Reaching $100 Million in ARR
      • Scaling Engineering Teams:  Fast Growth Remote Culture
      • Everything You Need to Know About Startup Finance
      • The Key to High-Performing Companies

Lloyed helped out at the first TechStars StartUp Weekend in Sacramento and has maintained a good connection to us.  He is based in the Bay Area and has always been willing to help.  Good person to know.

Thomas Hall

ABOUT THE AUTHOR

Gary Simon is the Chair of CleanStart's Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.

CleanStart Sponsors

Weintraub | TobinBlueTech Valley, Revrnt, River City Bank

Moss AdamsPowerSoft.biz, Greenberg Traurig, California Mobility Center

Aussie Aluminum-Ion Battery Shows Great Promise

Aussie Aluminum-Ion Battery Shows Great Promise

The battery revolution is showing no signs of slowing down. Now a group at the University of Queensland has demonstrated in small “button” cells a new aluminum-based battery that can charge 10-times faster than Li-ion, has a longer life (2000 cycles), and needs no cooling. Sounds almost too good to be true. The downside is that its energy density is only about 60% of the best lithium-ion battery at 150 Wh/kg. The reason for the fast charge is that the power density is massive at 7,000 W/kg, so the battery functions almost as an ultra-capacitor which typically can carry 12,000+ W/kg. A lithium-ion battery has a power density of about 700 W/kg. Big difference. 

In a smartphone, the fast charge could mean getting a full charge in less than 5 minutes, and could be an immediately attractive option. In an EV, the relatively low energy density and hence limited range is offset by the weight savings of eliminating the need for a cooling system. On balance, the performance of the aluminum battery pack with no cooling system weighing the same as a lithium-ion system with cooling could provide 72% of the range. Might be an okay tradeoff, especially if the aluminum battery pack could be recharged in minutes.

The fast recharge rate also opens up the possibility of using an aluminum-ion stationary battery array at a charger station to reduce the demand on the grid to get a fast charge on an EV. 

A battery that does not use lithium, but rather cheap and abundant aluminum could resolve issues on not having enough lithium ore and on recycling used batteries.

But there is a long road from the current small-scale demo of the technology to the production of commercial batteries at a reasonable price. The new technology apparently uses high-quality graphene as an essential component. Right now, graphene is pretty expensive per kg. No information has been provided on the cost of these new batteries. That shoe will drop later. The Graphene Manufacturing Group (GMG) in Australian intends to commercialize this new technology starting with small cells for consumer electronics by 2025, and building up to the pouch-type cells most appropriate for EVs at an unspecified date. 

You can learn more in this article in Forbes and the news release from GMG.

Thomas Hall

ABOUT THE AUTHOR

Gary Simon is the Chair of CleanStart's Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.

CleanStart Sponsors

Weintraub | TobinBlueTech Valley, Revrnt, River City Bank

Moss AdamsPowerSoft.biz, Greenberg Traurig, California Mobility Center

Low Carbon Fuel Standard Accelerates Business in Sac

Low Carbon Fuel Standard Accelerates Business in Sac

California utilizes incentive programs to reduce carbon emissions, creating costs for polluting entities and generating revenue for those adopting cleaner technologies. One of the most recognized State policies is California Assembly Bill (AB) 32 and the Governor’s Executive Order S-01-07. These led to the Air Resources Board (ARB) creating the Low Carbon Fuel Standard (LCFS) and a market to trade them on. Sacramento-based e-Mission Control helps small and medium-sized businesses take advantage of the LCFS by navigating and administering the regulatory hurdles associated with fleet electrification. Led by CEO Todd Trauman, e-Mission Control has seen significant growth helping companies turn the LCFS into a revenue opportunity. 

The LCFS aims to reduce emissions in the transportation sector by limiting the carbon intensity of fuels used reducing the state’s greenhouse gas emissions. The ARB also created a market to trade them on, ultimately creating economic incentives to accelerate change. In the LCFS market, low carbon intensive fuel producers can register to produce LCFS credits for the amount of fuel dispensed. High carbon intensive fuel producers or distributors must offset emissions by purchasing these LCFS credits to offset deficits they create unde the same program. 

If that sounds confusing for companies whose expertise is not dealing with government programs or calculating their carbon emission offsets, e-Mission Control is here. They have built a software platform to help companies learn how to track and manage their fleet, earn revenue from LCFS credits, and reduce emissions without additional administration headaches. They have expertise on the LCFS, fleet technology, and impact on companies. They represent hundreds of facilities across the state utilizing their My-eMC platform.

Their success has enabled them to close a fundraising round rapidly and move to continue expansion and develop additional value-adds for fleets. As we have highlighted before, and our recent CleanStart Perspectives with Sabya Das highlights, raising significant funds relies on having validation and a plan. Trauman highlights investors understood how customers valued their work and recognized their growth path. This didn’t happen overnight. e-Mission Control’s parent company is Momentum with decades of experience with the CEC, ARB, and many other  entrepreneurial and innovation support institutions in the state. The connections they’ve built enabled them to build a better product and show customers, investors, partners, and agencies they were listening and responding to build a sustainable business.

Check out E-Mission Control's impact:

What has their success been? Over 43 thousand megatons of CO2 offset and tens of thousands of pieces of zero-emission equipment deployed and tracked for small and medium-sized companies across the state. They’re truly delivering value companies want and supporting the principles and intent of AB 32.

Reducing emissions is not a straightforward task. Market incentives leveraged by the Low Carbon Fuel Standard, and startups like e-Mission Control are allowing for new access to revenue, upgrading of fleets, and streamlined compliance with state regulations, so that businesses can continue focusing on their business.

ABOUT THE AUTHOR

Thomas is the Executive Director of CleanStart. Thomas has a strong background in supporting small businesses, leadership, financial management and is proficient in working with nonprofits. He has a BS in Finance and a BA in Economics from California State University, Chico. Thomas has a passion for sustainability and a commitment to supporting non-profits in the region.

CleanStart Sponsors

Weintraub | Tobin, Moss Adams GreenbergTraurig

BlueTech Valley, PowerSoft.biz, Revrnt, Synbyo, Califronia Mobility Center

My Mobility

My Mobility

Back in April 2019, Sacramento was introduced to GIG cars and not long after I moved to Sacramento from San Diego for college I started using them. GIG is an electric car sharing program where one can rent a gig car that is strategically placed around the city of Sacramento. 

Because I don’t have a personal car, GIG cars have made things more enjoyable, saving me money and being easily accessible. You can take gig cars anywhere so long as you place them back in one of the designated ride ending locations. If you need any type of help, they have operators that will help you 24/7 which has been helpful to me when I lose bluetooth connection to the car. My overall experience with gig cars has been great. Electric cars are easy to drive as well as typically fully charged. My most memorable experience when driving them was when I took it to go ice skating and ended up getting locked out of the car because I had no service. The operator support was able to open the car and even made sure that I was able to start it. I chose GIG cars instead of buying a car because I am a full time college student and have other priorities. 

So, I am a student hundreds of miles from home. Able to access a vehicle and get support without all the baggage that comes from owning a vehicle. It makes life easier and I don’t lose opportunities because of it.

Currently, I am a second year computer science major at Sac State. My desire to go into computer science was first sparked when I watched CSI cyber and there was an episode where a person was able to hack into people’s cars and kidnap them. Before seeing this I was completely unaware that people could hack into cars but I knew in that moment that I wanted to help people who didn’t know that they were even being attacked. Thankfully, I have confidence this is not a problem with GIG cars.

Thomas Hall

ABOUT THE AUTHOR

Saraia Jackson is a second-year computer science major at CSU Sacramento. Her long-term goal is to become a cybersecurity analyst. She wants to show young African American women that they can do whatever they put their minds to no matter where they come from. She also really wants to devote her life to helping children and making a difference. 

CleanStart Sponsors

Weintraub | Tobin, EY, Moss Adams, Momentum

BlueTech Valley, PowerSoft.biz, Revrnt

College of Engineering & Computer Science at Sacramento State


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