First Private-Sector Mechanism to Provide a Cost-Effective Means for Companies to Meet Their Emissions-Reduction Requirements Natsource Becomes World's Largest Private Sector Manager of Greenhouse Gas Emissions Assets
WASHINGTON, OTTAWA, LONDON and TOKYO, Oct. 19 /PRNewswire/ --
Natsource LLC, a leading global provider of asset management services,
transaction services and advisory and research services in emissions and
renewable energy markets, announced today that its wholly owned
subsidiary Natsource Asset Management Corp. (NAMC) has closed the
Greenhouse Gas Credit Aggregation Pool (GG-CAP), with total commitments
of euro 455 million (US$550 million) from 26 participants. The GG-CAP is
the first private-sector initiative to provide a cost-effective means
for companies to meet requirements to reduce their greenhouse gas
emissions under the European Union Emissions Trading Scheme and the
Kyoto Protocol.
"The closure of GG-CAP, the first private-sector credit aggregation
pool, is a watershed in the development of the greenhouse gas market,"
said Jack Cogen, president of Natsource LLC. "The participation of so
many highly regarded companies from around the world demonstrates the
viability of this approach for meeting emissions-reduction targets. We
are proud of the confidence that these major corporations have shown in
us."
The 26 participants in the program are among the largest consumer
product, manufacturing, energy and utility companies in Europe, Japan,
and North America, and have a combined market capitalization of more
than US$300 billion. Participants include: The Chugoku Electric Power
Co., Inc.; Cosmo Oil Co. Ltd.; Electricity Supply Board (Ireland);
Endesa Generacion; E.ON UK; EPCOR; Hokuriku Electric Power Company;
Hokkaido Electric Power Co., Inc.; Iberdrola; Norsk Hydro ASA; The
Okinawa Electric Power Co., Inc.; Public Power Corporation S.A.; Repsol
YPF; Sergey Brin; Suntory, Ltd.; and Tokyo Gas Co., Ltd.
How the GG-CAP works
The GG-CAP is a "buyers pool" that will combine the purchasing power
of the 26 participants to acquire and manage the delivery of a large
volume of compliance instruments created by the project-based mechanisms
included in the Kyoto Protocol. These instruments -- formally known as
Certified Emission Reductions (CERs), created by Clean Development
Mechanism projects (CDM), and Emission Reduction Units (ERUs), created
by Joint Implementation projects (JI) -- can be used by participants to
comply with emission reduction requirements from 2005-2012 imposed by
the European Union Emissions Trading Scheme and by nations such as
Canada and Japan seeking to comply with their obligations under the
Kyoto Protocol from 2008- 2012.
According to Natsource estimates, these countries will be
approximately 3.75 billion tonnes short of their Kyoto Protocol
emissions-reduction obligations from 2008-2012, based on current
emissions trends.
NAMC will identify, evaluate, purchase, and manage delivery of
reductions that buyers can use for compliance. Through the GG-CAP,
companies will benefit from pooling large-scale demand to secure
cost-effective compliance. They will also gain from GG-CAP's ability to
use active risk management techniques to guard against under- delivery
of contracted volumes. These techniques include diversification, reserve
margins, risk management contracts and insurance products. They will
facilitate the development of a highly-valued portfolio of compliance
instruments that participants can use as a component of their overall
compliance strategies.
Importantly, the use of these instruments for compliance is
supplemental to the participants' domestic efforts to reduce their
emissions.
Paul Vickers, formerly of TransAlta's carbon market initiative and
managing director of NAMC, serves as the manager of GG-CAP. "We have
developed GG-CAP over the past two years with the input of many
companies that were seeking an efficient way to gain access to
emission-reduction projects around the world. We are actively seeking
and assessing reduction projects that meet our cost and risk
requirements, and will use our size to develop a diversified portfolio
of high quality CERs and ERUs that participants can count on for
compliance," said Vickers.
Natsource LLC's wholly owned subsidiary Natsource Asset Management
Delaware also operates a series of managed accounts designed to take
advantage of investment opportunities arising in new and existing
emissions and renewable energy markets around the world. They are
designed to stimulate the development of greenhouse gas emission
reduction and renewable energy projects and to provide superior rates of
return to investors. One of the investors is MSM Capital Partners LLC, a
mission oriented, multi-strategy environmental opportunities fund.
Statements From GG-CAP Participants
Shigeo Shirakura, president of The Chugoku Electric Power Co., said,
"We are taking actions to address global warming including the promotion
of non- emitting nuclear power plant construction. Chugoku has
participated in GG-CAP since its beginning, and has increased its
original commitment by 3 million tonnes to 6.6 million tonnes. We
believe that our participation in GG-CAP will contribute to the
prevention of global warming."
"We have participated in the GG-CAP since February 28th, 2005 in
order to effectively and efficiently contribute to the prevention of
global warming. We expect that this initiative, as it grows
significantly, will stimulate CDM and JI projects in near future,"
stated Naomasa Kondo, managing director, Cosmo Oil Co., Ltd.
"I congratulate Natsource on announcing final close of GG-CAP and
wish them every success in their operation of the pool throughout its
term," stated Tony Cocker, managing director, Energy Wholesale, E.ON UK
plc. "At E.ON UK we are very happy to be a participant, having
recognised at an early stage that such a mechanism, operated by
Natsource staff with their extensive knowledge and understanding of this
developing market, would be a valuable diversification to a portfolio of
JI/CDM contracts. In addition, the perspective provided by the
involvement of companies with different regional, regulatory and
commercial pressures would be extremely valuable in understanding the
international market.
We look forward to working with Natsource and all the participants
over the years to come."
"EPCOR is acting on a local, national and international basis to
reduce greenhouse gas emissions and address climate change," said Dr.
David Lewin, EPCOR's senior vice president of environment. "Our
involvement with GG-CAP builds on the climate change strategy EPCOR
initiated in 1996. This strategy led to our early participation in the
emission credit marketplace and the development of renewable energy
projects fueled by the wind, small hydro, biomass and the sun. EPCOR has
also invested millions in clean energy technology at our generation
facilities in order to further strengthen our overall environmental
performance."
Iberdrola has closed an agreement to purchase two million credits
through the GG-CAP carbon fund, managed by Natsource. Iberdrola said,
"Thanks to this agreement, the utility hopes to meet its commitments
under the Kyoto Protocol at lower cost than current trading values on
the European CO2 markets. The agreement signed with the GG-CAP is just a
further demonstration of Iberdrola's commitment to the environment and
sustainable development. In this respect, Iberdrola was a pioneer in the
installation of cleaner electricity generation technologies, with a
historic commitment to hydro generation dating back to its foundation,
over 100 years ago."
Akira Sakuma, managing director and division manager, Electric Power
Engineering Division at The Okinawa Electric Power Co., Inc, commented,
"Okinawa Electric Power Company addresses global warming based on its
comprehensive policy. We participate in GG-CAP (Buyers Pool) to utilize
the Kyoto mechanisms as an element of the company's strategy to comply
with its emissions reduction obligations under the Kyoto Protocol. The
Buyers Pool has been strengthened by the new investors that have joined
at final close. It should be able to use its size to secure cost
effective CERs in the carbon dioxide emissions reduction market.
Okinawa Electric is convinced that its participation in GG-CAP will
contribute to the prevention of global warming."
"In 2002, Repsol YPF pledged its firm commitment to the use of the
Kyoto Protocol's Flexibility Mechanisms, especially the Clean
Development Mechanism, as a way of reaching global GHG emission
reduction targets," Repsol said. "Repsol YPF is living up to this
commitment through its efforts to both promote and engage in internal
CDM projects as well as invest in emissions reductions in the broader
CDM market. In light of these commitments, Repsol YPF announces its
participation in the Natsource GHG Credit Aggregation Pool, a vehicle
through which we have invested in the emissions reduction potential of
energy efficiency, renewable energy, waste management, fuel-switching
and other projects in developing nations.
This investment is one of many measures the company is taking to help
achieve its obligations under the European Union GHG Emissions Trading
Directive in a way that is consistent with our policy of promoting a
global effort in tackling climate change."
Sergey Brin said, "As a first step we are taking to reduce our impact
on the climate, Eric, Larry, and I have committed to reducing carbon
emissions by investing in the Natsource Greenhouse Gas Credit
Aggregation Pool."
About Natsource
Natsource LLC is a leading global provider of asset management
services, transaction services and advisory and research services.
Natsource utilizes its regulatory, market and trading expertise to
assist private firms around the world in the strategic management of
environmental risk, and to provide superior returns to investors by
taking advantage of opportunities in local, regional, and global
emissions and renewable energy markets. Natsource is headquartered in
New York and has offices in Calgary, La Paz, London, Ottawa, Tokyo and
Washington, DC, providing the company with global reach and proximity to
many of the world's leading financial centers.
More information is available at
http://www.natsource.com . SOURCE Natsource LLC