Trading Operations

Markets

Compliance carbon markets

Carbon trading operations can be used to reduce greenhouse gas (GHG) emissions

ALLCOT Group is a well established carbon trading leader with an extensive network of global counterparts. Our Carbon Trading operations provide instruments for our clients to efficiently and effectively manage their carbon exposure.

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What is Emissions Trading?

An emissions trading system (ETS) is a market-based mechanism that can be used to reduce greenhouse gas (GHG) emissions. It works on the principle of ‘cap and trade’. The government sets a limit (cap) on the total emissions in one or more sectors of the economy. Companies in these sectors need to hold one permit for every ton of greenhouse gases they release. They may either receive or buy permits, and can trade them with other companies.

Who is covered by an ETS?

The Government decides which sectors of the economy and which gases are included in the system. The power and industrial sectors are included in most systems currently operating around the world. Carbon dioxide (CO2), as the most common GHG, is also usually covered by an ETS. Other GHGs include methane (CH4), nitrous oxide (N2O) and other fluorinated gases (SF6, HFCs and PFCs).

What is a Cap and How to distribute pemits?

The limit (or cap) on emissions is set in advance and declines over time. It should also be in line with the jurisdiction’s overall emissions reduction target. Governments can decide to allocate permits free-of-charge (based on past emissions or performance standards) or it may auction them. How permits are distributed will also affect the way companies manage their emissions.

How can companies manage their emissions?

At the end of a trading period, each company must submit enough permits to cover its emissions. To do so, companies can choose one or more of the following options:
1. Reduce their emissions, by improving the efficiency of their production processes or switching to a less carbon-intensive energy source. This may leave them with surplus emissions allowances that they may sell in the market.
2. A company may buy additional permits from other companies corresponding to the number of allowances it needs to meet its actual emissions.
3. Use domestic or international offsets. Systems often allow companies to cover part of their emissions with credits from emission-reduction projects in sectors that are not covered by an ETS. The most common types are renewable energy or forest projects.

Information provided by ICAP www.icapcarbonaction.com

Voluntary carbon markets

Markets where we feel there is tremendous growth potential.

In recent years, following on from our strong performance in compliance markets, ALLCOT has gradually built a robust understanding of voluntary markets, where we feel there is tremendous growth potential. As a result, we have developed a strong portfolio of products and marketing partnerships with project developers in this segment and continue to innovate in our voluntary actions.

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Sales

The process of corporate sales and offsetting requires a thorough understanding of the fundamentals of the carbon assets, the projects themselves and the social impacts involved at ground level. ALLCOT has considerable experience in the evaluation of various VER standards and projects to meet a wide range of end-use scenarios.

Memberships and exchanges

The Carbon Trade Exchange is a global electronic trading platform serving primarily the voluntary carbon markets. The security and transparency of the platform allows ALLCOT to use the service as a public channel to create awareness and sales of the VERs under our management.

Structured products

Swaps, Repo Agreements, Lending Operations

A disciplined investment process and a solid risk management framework provides net worth to our counterparts who would prefer to see their assets work for them rather than have valuable compliance carbon assets sit idle and non-productive.

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AVOID SPECULATION
A key goal for most of our clients is to avoid speculation. Speculation is usually defined as buying or selling stocks or commodities to profit from an anticipated price movement. Most companies operating under compliance market obligations don’t want to speculate, as it is not their business.

Swaps

The swap is the exchange of EUAs into CERs or visa versa. The swap is used to minimize compliance costs for EU companies by fully exploiting the benefits of the European Union’s linking directive or to seek increased liquidity or higher returns from other markets.

Repo Agreement

The Repo Agreement is a form of borrowing in which the client sells the allowances (EUAs or CERs) to ALLCOT and agrees to buy them back at a predetermined date. The Repo agreement is generally used to increase short-term working capital without taking on price risk, under better conditions than standard bank loans.

Lending Operations

With Lending, the client allows ALLCOT the use of its unused allowances in return for interest rate payments for a predetermined time, under an agreement to receive them back later. Lending is used when allowances are unused and the owner seeks to receive additional cash flows without engaging in speculation

Water Benefit Standard Credits trading

Gold Standard water benefit certificates (WBCs) serve as a common currency for the scheme

Gold Standard Water Benefit Certificates (WBCs) serve as a common currency for the scheme, certifying that a certain volume of water has been sustainably supplied, purified and/or conserved by a given project during a specific period of time. The purchase of these WBCs – by private companies, development agencies, philanthropic foundations and other interested investors – generates an annuity revenue stream that is then used to support the project activity.

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For the first time in the water sector, the WBS ‘payment for performance’ approach – which includes strong and regular independent monitoring, reporting and verification of project outcomes – ensures that financial contributions to sustainable water development are achieving real and long-term positive impacts.

Energy certificates

Energy Savings Certificate (ESC) guarantees that an amount of energy savings has been achieved.

Energy Savings Certificates (ESC), are instruments issued by an authorized body guaranteeing that a specified amount of energy savings has been achieved. Much like carbon credits, each certificate is a unique and traceable commodity allowing companies to gain financing for improving facility efficiency.

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More and more countries are taking action and implementing a range of policies and incentives for companies. As a result, at a global level, we are faced with specific nuances that required a more tailored approach to determine feasibility of developing projects.

ALLCOT, with a globally distributed team of specialists, is able to help you evaluate these opportunities in an effective manner.

Biomass

Combining carbon finance and emissions offsetting programs with biomass origination

ALLCOT is active in emissions-related markets such as biomass, which complements with other activities.
Through partners specializing in biomass origination, we are able to combine our carbon finance and emissions offsetting programs with biomass origination.

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Currently we are able to offer the following biomass products:

  • PALM KERN SHELL
  • BAMBOO
  • RICE HUSK PELLET
  • PELLET DIN 51731
  • PELLET DIN+
  • INDUSTRIAL OLIVE PELLET
  • INDUSTRIAL VINE PELLET
  • SAWDUST
  • OLIVE STONE
  • ALMOND SHELL
  • PINE BARK
  • PINE WOOD CHIPS
  • PINE TRUNK
  • POPLAR WOOD CHIPS
  • OLIVE PRUNING
  • SUNFLOWER HUSK PELLET
  • ALMOND SHELL BRIQUETTES
  • RICE HUSK BRIQUETTES
  • OLIVE CAKE PELLET
  • OLIVE CAKE NOT PELLETIZED
  • GREEN HOUSE WASTE