Demand for voluntary carbon credits is expected to increase 5-10 times in the next ten years, 8-20 times by 2040, and 10-30 times by 2050, resulting in expected shortages. Analysts predict a significant price increase in the voluntary carbon credit market in the near future.
Companies are under increasing pressure to compensate for or neutralize their greenhouse gas emissions.
In fact, 632 of the world's largest 2000 revenue-producing public companies announced plans to achieve Net Zero greenhouse gas emissions following the 2021 United Nations Climate Change Conference (COP26) conference in Glasgow, Scotland.
At COP27, which kicked off on November 6, the US outlined a new carbon-credit plan called the Energy Transition Accelerator, which aims to pump billions of dollars into developing countries’ energy transition. The plan aims to enlist investors in an effort to reduce carbon emissions across entire regions and countries by paying these developing nations to accelerate the construction of renewable energy sources and shut down fossil fuel energy sources.
Many more companies are expected to follow in the footsteps of these trailblazers as consumers and major financial institutions with trillions of dollars under management, such as the US Federal Reserve and mega-funds like Blackrock and Vanguard, continue to emphasize their desire to do business with companies that care about the environment.
It has quickly progressed to the point where environmental responsibility has become a driving force for business success.
It is now estimated that in order to meet climate goals, at least two-thirds of companies will require voluntary carbon credits.
This is a problem because a carbon credit shortage is on the horizon and in order to meet the demand for carbon credits, carbon project development must accelerate at an unprecedented rate. Not just any old projects, either.
Corporate buyers and even entire countries are calling for restrictions on the use of older, lower-quality credits, meaning companies that can provide quality credits to the voluntary markets will be in higher demand.
Base Carbon Inc. (NEO:BCBN) (OTCQX:BCBNF) is an upstream commodity capital allocator that funds and develops emission-reduction projects in order to generate carbon credits for voluntary markets.
Its two main flagship projects are fuel-efficient cookstoves and home appliances.
Unlike low-quality carbon avoidance projects, Base Carbon provides nature and technology-based solutions that are already changing thousands of lives, removing millions of tonnes of carbon from the atmosphere, and solidifying this company's position in the expanding market.
In the last six months, the Company has completed two carbon-reduction projects, which have resulted in strong partnerships and offtake agreements with short-term capital recovery.
Base Carbon announced another carbon reduction project through its subsidiary Base Carbon Capital Partners Corp. On November 22, the company signed a letter of intent (LOI) with the Danish Red Cross to scope, assess, and potentially develop one or more mangrove-related carbon reduction projects in Southeast Asia using the VERRA “Tidal Wetland and Seagrass” methodology.
In addition to carbon sequestration, such projects can aid in mitigating natural disasters and restoring fish and other marine life habitats. The parties have agreed to work exclusively on such potential regional projects until at least October 2024.
The Danish Red Cross is a well-known innovator in the development of investment and underwriting structures for the commercialization of carbon, climate, and social benefit projects. Potential projects will be funded jointly by the Danish Red Cross (as well as other Red Cross affiliated entities), and the parties anticipate that any project will be insured by Dunant Re IC Limited, a joint venture between the Danish Red Cross and Replexus. As the parties collaborate, Base Carbon intends to provide regular updates.
“This partnership is consistent with Base Carbon’s mandate to work with leading organizations on carbon projects with strong economics and social benefit additionalities, said Philip Hardwick, COO of Base Carbon. “The Red Cross Movement, with its scale and breadth is ideally suited to execute carbon reduction and removal projects. Base will invest and contribute technology to materialize these projects.”
The Red Cross, in collaboration with other partners, established the Mangrove Trust Fund, which will allow capital from donor funding and trustees to be split to pay for ecosystem restoration and the insurance premium for a parametric cat bond, which protects against loss or damage to newly planted mangroves and the surrounding communities.
Base Carbon Completes a Carbon-Cutting Project in Vietnam
Base Carbon released its second quarter corporate and financial highlights earlier this year, including the execution of a carbon reduction project involving the distribution of 850,000 cookstoves and 364,000 water purifiers in Vietnam, with Citigroup Global Markets contracting as the project's carbon credit off-taker.
Base Carbon announced the completion of a carbon reduction project in Vietnam that will see the distribution of 364,000 water purifiers and 850,000 cookstoves in the second quarter of 2022. Base Carbon expects a contractual project offtake agreement to result in a 2.75-year payback period on the total amount of invested capital for the initial production of carbon credits.
With approximately 710,975 devices already distributed, it is expected that the distribution of the devices in Vietnam will be completed ahead of schedule by the middle of 2023. It is exceeding expectations in terms of the distribution of cookstoves as part of the Company's initial carbon reduction project in Rwanda, with full deployment expected by the end of 2022.
The Company also stated that the distribution of cookstoves in its initial carbon reduction project in Rwanda is exceeding initial project timelines, with full deployment of cookstoves expected by the end of this year.
As of September 30, 2022, the Company had total assets of $52.4 million, mainly comprised of $24.8 million in cash and cash equivalents, $14.2 million in investments into carbon credit projects, $0.7 million in prepaid and other assets, a $1.3 million equity investment in AirCarbon and a $11.3 million investment in associate company, Hardwick Business Climate Limited.
Base Carbon aspires to be the preferred carbon project partner in the provision of capital and developmental resources to carbon projects globally and will seek to leverage emerging carbon industry technologies to improve efficiencies, commercial credibility, and trading transparency where appropriate.
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6) This document contains forward-looking information and forward-looking statements, within the meaning of applicable Canadian securities legislation, (collectively, “forward-looking statements”), which reflect management's expectations regarding Base Carbon Inc.’s future growth, future business plans and opportunities, expected activities, and other statements about future events, results or performance. Wherever possible, words such as “predicts”, “projects”, “targets”, “plans”, “expects”, “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”, “intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking statements. These forward-looking statements include, among other things, statements relating to: (a) revenue generating potential with respect to Base Carbon Inc.’s industry; (b) market opportunity; (c) Base Carbon Inc.’s business plans and strategies; (d) services that Base Carbon Inc. intends to offer; (e) Base Carbon Inc.’s milestone projections and targets; (f) Base Carbon Inc.’s expectations regarding receipt of approval for regulatory applications; (g) Base Carbon Inc.’s intentions to expand into other jurisdictions including the timeline expectations relating to those expansion plans; and (h) Base Carbon Inc.’s expectations with regarding its ability to deliver shareholder value. Forward-looking statements are not a guarantee of future performance and are based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this document including, without limitation, assumptions about: (a) the ability to raise any necessary additional capital on reasonable terms to execute Base Carbon Inc.’s business plan; (b) that general business and economic conditions will not change in a material adverse manner; (c) Base Carbon Inc.’s ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; (d) Base Carbon Inc.’s ability to enter into contractual arrangements with additional Pharmacies; (e) the accuracy of budgeted costs and expenditures; (f) Base Carbon Inc.’s ability to attract and retain skilled personnel; (g) political and regulatory stability; (h) the receipt of governmental, regulatory and third-party approvals, licenses and permits on favorable terms; (i) changes in applicable legislation; (j) stability in financial and capital markets; and (k) expectations regarding the level of disruption to as a result of CV-19. Such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of Base Carbon Inc. to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking statements. Such risks include, without limitation: (a) Base Carbon Inc.’s operations could be adversely affected by possible future government legislation, policies and controls or by changes in applicable laws and regulations; (b) public health crises such as CV-19 may adversely impact Base Carbon Inc.’s business; (c) the volatility of global capital markets; (d) political instability and changes to the regulations governing Base Carbon Inc.’s business operations (e) Base Carbon Inc. may be unable to implement its growth strategy; and (f) increased competition.
Except as required by law, Base Carbon Inc. undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future event or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. Neither does Base Carbon Inc. nor any of its representatives make any representation or warranty, express or implied, as to the accuracy, sufficiency or completeness of the information in this document. Neither Base Carbon Inc. nor any of its representatives shall have any liability whatsoever, under contract, tort, trust or otherwise, to you or any person resulting from the use of the information in this document by you or any of your representatives or for omissions from the information in this document.
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