The carbon credit market has been doing very well for a year. The world’s first and largest market for trading carbon credits is the European Union Emissions Trading Scheme (EU ETS). Under the EU ETS, regulated entities buy or receive emission allowances, which they can trade with each other if necessary. The EU ETS works on the principle of ‘cap and trade’ as you can read here. The key is that emitters can buy carbon credits and if they exceed their emissions caps, they are heavily fined. Meanwhile, companies that reduce carbon emissions (renewable energy, forestry, etc.) can earn money by selling their carbon credits. The idea is that by placing a cost on carbon, it helps motivate emitters to reduce their emissions.
Reports have indicated that a carbon price over US$100/t may be needed by 2030 to stay below the temperature targets contained in the Paris Agreement.
Today’s company aims to accelerate the global transition to a net-carbon-free future by bringing capital to projects that otherwise could not be developed. In exchange for the capital, the company receives its carbon credits.
EU carbon permit prices have risen 162% in the past year
1 year EU carbon permit price chart
Source: Trade economy
Note: Carbon credit pricing varies globally and by market. On the voluntary market, prices are closer to an average of US$12/tCO2and from December 2021.
Carbon Broadcasting Society (NEO: NETZ | OTCQB: OFSTF) offers investors a way to invest in the growth of the carbon credit market. It acts as an investment vehicle, buying carbon credit revenue streams in exchange for an upfront payment. If the value of the carbon credits increases or can be sold later at a profit, the stream becomes more valuable, potentially increasing the value to the acquirer of the carbon stream. Revenues and profits will also depend on the quality and return on investment of streaming deals made.
Carbon Streaming currently has a portfolio of 3-4 global carbon credit projects which are:
- Rimba Raya (Borneo, Indonesia)
- MarVivo Blue Carbon (Baja California Sur, Mexico)
- Cerrado Biome (CerradoBrazil)
- Bonobo Peace Forest (DRC, Africa) – Subject to FS results.
Current portfolio of 3-4 carbon credit projects from Carbon Streaming Corp.
Note: Carbon Streaming Corporation has only made an initial investment in the Bonobo Peace Forest, which will be directed to prepare the feasibility studypass aways and establish initial project activities. This is why the table indicates “3 to 4” projects.
Catalysts and strategy in 2022 for Carbon Streaming Corporation
In 2022, Carbon Streaming intends to achieve the following goals:
- Acquire additional carbon credit streams and royalty investments to grow the portfolio. The Company has a pipeline of potential opportunities of $200 million in the short term (
- Generate income through the sale of carbon credits (see image below).
- Execution on a US listing on a major US exchange, targeted in the first half of 2022.
Estimated 2022 carbon credits to be received by Carbon Streaming Corporation from Rimba Raya and Cerrado Biome
Source: Carbon Streaming press release of January 18, 2022
CEO Justin Cochrane said in January 2022: “In 2022, we expect the delivery of approximately 7.0 million carbon credits of our existing investment streams, announcing new investments in carbon projects around the world and deepening relationships with our growing community of carbon project developers. We will continue to invest in building the best team in the carbon markets industry and advancing our plans for a US listing proposal.
Note: author’s heavy emphasis. Additionally, the “attributable credits” to Carbon Streaming Corp. are cited in the table above between 5 and 5.6 million.
Carbon Streaming Corporation offers investors a growing portfolio (currently 3-4 projects) of carbon credit streams for continued income and potential long-term appreciation.
2022 should be a very good year for the company as it achieves its first revenue of approximately 5-5.6 million attributable carbon credits and pursues more project contracts and a US listing on a major US exchange.
Carbon Streaming Corporation trades on a market capitalization of 605 million Canadian dollars after a strong 2021, their stock dropping from ~CA$7.55 a year ago to now trading at CA$13.00. Stay tuned in 2022.