Raw methane gas, CH4, produced by the breakdown of organic matter in the absence of oxygen. Biogas can be produced from raw materials such as agricultural water, manure, municipal waste, plant material, sewage, green waste or food waste. Biogas is a renewable energy source.
Energy produced by combusting biomass materials such as wood. The carbon dioxide emitted from burning biomass will not increase total atmospheric carbon dioxide if this consumption is done on a sustainable basis (i.e., if in a given period of time, regrowth of biomass takes up as much carbon dioxide as is released from biomass combustion). Biomass energy is often suggested as a replacement for fossil fuel combustion.
Biogas that has been processed and is ready for injection into the natural gas pipeline.
Renewable fuel produced from cellulose, hemicellulose or lignin. Cellulosic biofuel must reduce lifecycle greenhouse gas emissions by at least 60%; compared to the petroleum baseline.
Cellulosic Waiver Credit
In the cellulosic category, Obligated Parties may purchase a Cellulosic Waiver Credit (CWC) from EPA to meet it’s D3 obligation when the supply is less than the demand.It is calculated as the greater of: $0.25 adjusted for inflation compared to 2008 Or, $3.00 less the wholesale price of gas adjusted for inflation compared to 2008. The price of the CWC is determined by EPA. The 2019 CWC is $1.77. CWC can only be purchased by an Obligated Party and cannot be traded.
D3, D4, D5, D6, D7
D codes are categories representing the different types of Renewable Identification Number (RIN), and include renewable fuel (D6), advanced biofuel (D5), biomass-based diesel (D4), cellulosic biofuel (D3), or or cellulosic diesel (D7). RINs are assigned a "D" code based on lifecycle greenhouse gas reductions.
D3 RINs are generated from the production of ethanol or methane dispensed as CNG or LNG produced from cellulose, hemicellulose or lignin materials. Methane produced from these feedstocks is commonly referred to as cellulosic biomethane. Production in this category has not met the statutory volumes, giving EPA authority to set annual obligations and make Cellulosic Credit Waivers available.
Low Carbon Fuel Standard
The Low Carbon Fuel Standard is a program designed to encourage low-carbon fuel is California. The LCFS is performance-based and fuel-neutral, thus allowing the market to determine how the carbon intensity of California's transportation fuels will be reduced. The program assigns fuels a carbon intensity (CI) based on a greenhouse gas lifecycle assessment which includes direct emissions associated with producing, transporting, and using the fuels.
Renewable Fuel Standard
The Renewable Fuel Standard is a federal policy administered by the EPA, which requires a certain volume of renewable fuel is used to replace petroleum transportation fuels consumed in the United States each year. The goal of the RFS is to replace 36 billion gallons of petroleum-based fuels with renewable fuel by 2022.
Renewable Identification Numbers
The volume of renewable fuel added to or replacing conventional fuel in the national pool is tracked via Renewable Identification Number (RIN). Refiners and blenders ("obligated parties, in the text of the regulation) use RINs to demonstrate they have met their annual renewable volume obligation. Each RIN represents 1 ethanol gallon equivalent of replacement fuel. 1 dekatherm of renewable natural gas generates 11.727 D3 RINs
renewable natural gas
Renewable natural gas (RNG) is pipeline grade methane derived from organic waste materials such as food waste, garden and lawn clippings, and animal and plant-based material. It can also be derived from degradable carbon sources like paper, cardboard and wood. RNG is produced when biogas is cleaned and conditioned to remove or reduce non-methane elements. The RNG is processed so it’s interchangeable with traditional pipeline-quality natural gas to ensure the safe and reliable operation of the pipeline network and customer equipment. RNG is extremely versatile, and can be delivered by the nation’s extensive pipeline infrastructure.
Renewable Volume Obligation
Each year, EPA sets the total volume of renewable fuels Obligated Parties must replace. This is called the Renewable Volume Obligation, or RVO. Obligated Parties’ individual RVOs are assigned by EPA based on the volume of gasoline or diesel they supply to the national fuel pool.
For the RFS, an obligated party is any refiner or blender that produces gasoline or diesel fuel in the U.S. is required by law to purchase RINs
Assembly Bill 32, or the California Global Warming Solutions Act of 2006, marked a historic moment in the state’s history by requiring a reduction of GHG emissions by the state. AB 32 requires California to reduce its GHG emissions to 1990 levels by 2020 and has resulted in the state’s cap-and-trade program. The program was extended through 2030 with the passage of AB 398.
Projects may only count emissions reductions that are "additional to what otherwise would have occurred in the absence of the certified project activity" (environmental additionality). These reductions must be "real" and "measurable" and must be quantified against a project baseline against which the additionality of the project can be measured and tested. Central to the discussion of additionality is that of what constitutes a project baseline.
Emission credits typically given by regulators to large facilities that "allow" those facilities to release a prescribed amount of pollutant. Surplus allowances may typically be sold, traded or banked for future use (depending on the compliance program in question).
American Carbon Registry
One of the three main voluntary carbon registries in North America. Element Markets is one of the most active players on the American Carbon Registry for Emission Reduction Tonnes (ERTs) transacted and retired on behalf of a company or organization.
A market in which buyers enter competitive bids and sellers enter competitive offers simultaneously. Current auction markets in the US for Emission and Greenhouse Gas credits exist for California (AB32), Regional Greenhouse Gas Initiative (RGGI), and SO2 Acid Rain Allowances.
California Air Resources Board
CARB is charged with protecting Californians from the harmful effects of air pollution and developing programs and actions to fight climate change. They oversee the implementation and rule making for AB32 and the LCFS program.
California Carbon Allowance
CCAs are issued via allocation or auction mechanism by the California Air Resources Board and may be obtained used by covered entities in meeting compliance obligations under AB 32.
California Compliance Offset
CCOs are generated by project developers under eligible project types stipulated by the California Air Resources Board. CCOs may be used to meet a percentage of a covered entities’ AB 32 obligation. Element Markets specializes in portfolio optimization with the use of CCOs for covered entities under California cap-and-trade.
California Environmental Quality Act Mitigation
Passed in 1970, CEQA requires projects to disclose to the public any significant environmental effects through the preparation of an Initial Study (IS), Negative Declaration (ND), Mitigated Negative Declaration (NMD), or Environmental Impact Report (EIR). Element Markets is a leader in assisting project developers with off-site GHG mitigation in the form of carbon offsets. Carbon offsets may be used to achieve GHG mitigation below a threshold set by the project’s lead agency as well as achieve net zero emissions. The National Environmental Policy Act (NEPA) represents the federal parallel to CEQA.
Carbon Disclosure Project
Formerly known as the Carbon Disclosure Project, CDP is a not-for-profit organization focused on the global disclosure of environmental impacts by companies around the world. Element Markets assists companies with sustainability reporting goals under CDP through the provision of environmental commodities.
A product, service, or organization is carbon neutral when their actions result in no net release of CO2 to the atmosphere. Carbon neutrality is typically achieved via the use of carbon offsets and/or renewable natural gas.
certified emission reductions
A unit of Greenhouse Gas reductions that has been generated and certified under the provisions of Article 12 of the Kyoto Protocol, the Clean Development Mechanism (CDM). In contrast, Emissions Reduction Units (ERUs) are used for Joint Implementation (JI) under Article 6 of the Protocol. According to Article 12, CERs must be "certified by operational entities to be designated by the Conference of the Parties (COP) serving as the Meeting of the Parties (MOP)”.
Climate Action Reserve
One of the three main voluntary carbon registries in North America. Element Markets is one of the most active players on the Climate Action Reserve for Climate Reserve Tonnes (CRTs) transacted and retired on behalf of a company or organization.
Compliance Instrument Tracking System Service
CITSS is a management and tracking system for accounts and compliance instruments (CCAs or CCOs) issued through participating entities under AB 32.
A calendar year, beginning January 1 and ending December 31 of each year in which renewable energy credits are required of a competitive retailer. Different compliance programs have varying deadlines. Under AB 32, the deadline occurs annually on November 1st, with additional compliance obligations occurring after three years (triennial period).
greenhouse gas reduction
A greenhouse gas reduction is a reduction in emissions that is recognized to contribute to climate change – e.g. carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. Greenhouse gas reductions are often measured in tons of carbon dioxide-equivalent. For example, 1 ton of methane has the same global warming potential as 20.9 tons of carbon dioxide.
The place in the NOx or SO2 Allowance Tracking System where Allowances are recorded and held by a NOx affected source or an SO2 source.
Discrete Emission Reduction Credits
DERs are created by temporary reductions against permitted levels under voluntary open market trading rules (OMTR) adopted by individual states. Currently New Jersey, Connecticut, Massachusetts, New Hampshire, Michigan, and Texas have promulgated OMTRs of some type. While some states certify DERs, others allow self-certification with third-party verification. These credits are usually traded to existing major emission sources for compliance with Reasonably Available Control Technology (RACT). DERs are created by temporary reductions against permitted levels under voluntary open market trading rules (OMTR) adopted by individual states. Currently New Jersey, Connecticut, Massachusetts, New Hampshire, Michigan, and Texas have promulgated OMTRs of some type. While some states certify DERs, others allow self-certification with third-party verification. These credits are usually traded to existing major emission sources for compliance with Reasonably Available Control Technology (RACT).
emissions reduction credits
ERCs represent pollution that is no longer being emitted. They are certified reductions of VOCs, NOx, SO2, PM-10, ROGS or CO2 from facilities in non-attainment areas. A company that retained the right to emit a given quantity of a pollutant into the air, and voluntarily lowered or eliminated those emissions may apply to have those emissions ‘certified.’
average weighted price
A calculation used to determine price taking into account the quantity of allowances sold
The process of registering emission reduction credits with the proper regulatory agency. After credits are "banked", they can be saved for future use or sold to another company.
price at which a buyer and seller agree to transact a trade
A calendar year, beginning January 1 and ending December 31 of each year in which renewable energy credits are required of a competitive retailer.
any emissions and renewable energy credits, energy conservation credits, benefits, offsets and allowances, emission reduction credits or words of similar import or regulatory effect (including emissions reduction credits or allowances under all applicable emission trading, compliance or budget programs, or any other federal, state or regional emission, renewable energy or energy conservation trading or budget program).
A price at which the stock or commodity underlying a call or put option can be purchased (call) or sold (put).
Fugitive emissions are intentional or unintentional releases of gases from anthropogenic activities such as the processing, transmission or transportation of gas or petroleum. In particular, they may arise from the production, processing, transmission, storage and use of fuels, and include emissions from combustion only where it does not support a productive activity (e.g., flaring of natural gases at oil and gas production facilities).
Co-benefits are the supplemental benefits derived from a carbon project. Certain co-benefits may be quantified (for example: number of employees added to the project area) or may be less measurable (for example: improved air and water quality from reforestation projects).