How Zero Carbon Project leverages international climate credits to beat fossil fuel energy on price
Zero Carbon Project tackles climate change using the blockchain and international carbon credits. Our Market beats renewables and fossil fuels on price; and our customers are rewarded with valuable Energis tokens as the catalyst for change.
Energy suppliers can compete with each other across our Zero Carbon Market and they can beat fossil fuels on price. They can do this by sourcing their electricity from the same cheap fossil fuels, while offsetting the carbon emissions using international carbon credits. The offsets are much cheaper than the premium for renewable energy and our intensely competitive market delivers more than enough price reductions to cover the extra cost.
The following chart compares zero carbon energy prices which can be 6% cheaper than fossil fuels and 21% cheaper than new renewable energy, using typical household usage and price assumptions described below.
1 Renewable electricity prices sourced from UK’s Ecotricity green offer on 10/8/17 (15.79p/kWh + 32.42p/day standing charge)
2 Fossil fuel electricity prices sourced from UK’s Eon standard offer on 10/8/17 (14.721p/kWh + 16.422p/day standing charge)
3 International carbon credit prices sourced from Intercontinental Exchange (ICE) CER futures price of €0.21/tonne on 10/8/17
4 Competition discount sourced from Beond analysis of savings performance for small energy consumers
5 Higher renewable premium in Australia based on Origin green premium of 5.61c/kWh on 10/8/17
What are international carbon credits?
International carbon credits are a mechanism to subsidise cheap carbon emission reduction projects in developing countries. A typical project may be closing a factory which releases greenhouse gases; or avoiding deforestation. Without the subsidy generated by purchasing the carbon offset, the project would not be viable. With the subsidy the project can be implemented to reduce carbon emissions into the planet’s atmosphere, providing a cheap and effective way to reduce carbon emissions.
International carbon credits were designed by the Kyoto Protocol in 1997 and re-confirmed by the 2016 Paris Climate Agreement. They can be purchased as Certified Emission Reductions (CER) which are issued by the Clean Development Mechanism (CDM) and they must be surrendered to effect a carbon emission reduction.
The United Nations designed standards for verification and monitoring which are followed by the VCS (Verified Carbon Standard) and GS (The Gold Standard) to regulate the process. These standards aim to ensure that emission reduction projects are ‘additive’ which means that they would not have proceeded without the subsidy.
To close the loop, to compete on our Zero Carbon Market, energy suppliers must provide evidence that they are not ‘double spending’ a carbon offset credit by allocating them to our energy consumers and another customer. Evidence may include that the green energy supplier sources all of their energy from renewables sources or offsets. Secondly, an energy supplier can provide us with an annual third party audit to match their aggregate zero carbon supply with their source. Third, an energy supplier could provide the carbon credit to the Market for surrendering, or they could request the Market to purchase the carbon offset on their behalf.
