Timbro, as one of the first, will provide an opportunity for rural property owners to verify and sell carbon credits, thereby generating additional income from their property. Our created platform and legal framework will allow carbon credits to be accredited without additional costs from the owners.
In Latvia, there are approximately 300 – 500 thousand overgrown and agriculturally unusable lands, which are even a kind of burden to their owners, which do not provide any benefit and may even generate losses. CO2 capture credits and their sale is a unique opportunity to earn from CO2 credits by performing the necessary actions and verifying these lands. Currently, these CO2 credits can be sold in the so-called voluntary markets, but in parallel, active work is underway in the European Union on a legal framework that will regulate and, possibly, create the opportunity to sell CO2 credits also in the ETS (Emissions Trading System) system.
Timbro actively cooperates with local and international experts and verification companies, ensuring an internationally recognized and correct process for obtaining and verifying credits.
How does it work?
Timbro is the first consulting center that combines consultants with experience in forest management, agriculture, finance and investment sectors. We share this knowledge and experience so that the people around us receive a fair and the highest possible benefit from rural property. We do not recommend selling your properties unless you are forced by extraordinary circumstances!
Until 2020, international emission credits could also be exchanged for ETS allowances - this was discontinued in 2020. This has sparked discussions on whether the rule should be revised for carbon capture credits (CRC) obtained in 14 EU countries. CRC is a verified instrument that proves that a predetermined amount (usually 1 tonne) of CO2 equivalent emissions has been removed from the atmosphere. This can be done in various ways, from forestry to direct air capture.
The European Commission (EC) recently completed the feedback phase for an action plan that would promote carbon removal solutions and develop a regulatory framework for CRC certification15. The plan will be published at the end of 2021 and will set a clear roadmap for CRC in the EU. In the meantime, a proposal for a regulation on the monitoring, reporting and verification of carbon capture is already in the drafting stage and will be launched for public consultation in the first quarter of 2022.
Once adopted at the end of 2022, the inclusion of CRC in the ETS will be just one step away. One step that could prove to be a couple of years long, as current EU policy is unable to provide a promising inclusion of CRC in the ETS. However, optimism still prevails, as the EC's Climate Action Department has not only published a guidance manual outlining emissions trading as a beneficial financing solution for carbon capture solutions, but the department's director has clearly stated in interviews that the uptake of CRC into the ETS is one of their goals, subject to certain conditions being met.
Including CRC in the ETS has many significant benefits. First, it is a "cheap" solution to the emissions problem. In 2020, 8450 million tonnes of allowances worth EUR 210 billion changed hands in the ETS at an average annual price of around EUR 25. Of these, 589 million allowances were auctioned by Member States for EUR 14.5 billion.
If trading volumes in 2021 have remained the same as in 2020, the market value will be more than 400 billion euros, as prices will rise to more than EUR 80 by the end of 2021. This means that by including CRC in the system, EU governments would create an incredible source of funding for carbon removal solutions without affecting their spending. Secondly, setting benchmark values for CRC would promote global innovation in carbon removal solutions towards the EU. Due to the high prices of ETS allowances, the EU would be the most cost-effective area to develop and implement any carbon removal solutions. This would generate foreign direct investment and increase employment. In addition, scalable solutions could then be exported elsewhere, further reducing global emissions.
Our world is on the verge of change and to reduce human impact on the climate, the European Union has set ambitious targets for reducing and capturing carbon dioxide (CO2) emissions from the atmosphere. According to the latest study by the Intergovernmental Panel on Climate Change (IPCC), the climate situation will worsen in the next 80 years, even adhering to the Paris Climate Agreement, which aims to keep the average temperature rise below 1.5 °C.
Public pressure to develop and implement solutions will increase, stimulating rapid growth in the CO2 compensation market. Currently, consumers are becoming increasingly sensitive to green marketing. It must be admitted that one should not be surprised by the frequency record that is happening in the world of climate statistics. For example, the previous decade was the hottest since records began 140 years ago. And, of course, natural disasters — from hurricanes in Central Europe to Greece-sized wildfires in Siberia.
All this disorder has created a widespread belief that climate change needs to be addressed. Even during the largest global pandemic in more than 100 years, 64% of people, covering more than half of the world's population, considered climate change to be an emergency. The United Nations (UN) survey was conducted by 1.2 million people from 50 countries, representing 56% of the planet's population. This shows how strongly public opinion has shifted towards action on climate. A position that will only become stronger in the coming years as the climate becomes less pleasant. And it will certainly become less pleasant, much less.
We are collectively not doing what needs to be done to change the tide — our emissions are still increasing every year, although slightly slower than 20 years ago. In its latest assessment report (AR6), the UN Intergovernmental Panel on Climate Change (IPCC) examines the physical science behind climate change, assesses its impacts and offers mitigation proposals.
The European Union (EU) has set its climate targets in the European Green Deal, the main goal of which is to make the EU climate neutral by 2050. A bold statement supported by various proposals, ranging from carbon tariffs to the revision of fossil fuels. The EU Emissions Trading System (ETS) has been one of the most successful European Union initiatives for reducing emissions.
The EU ETS was the first major greenhouse gas (GHG) emissions trading system in the world. Initially, the ETS covered approximately 12,000 installations, accounting for 40% of CO2 equivalent emissions. In the first phase (2005–2007), the system covered:
Now in phase IV, the scope of the system has been expanded to include aviation and maritime activities, while the overall GHG emission reduction target for 2030 stipulates that all sectors covered by the EU ETS must reduce emissions by 43% compared to 2005 levels.
Other sectors, such as road infrastructure, buildings and cars, are also expected to be included soon. The “cap-and-trade” principle is the basis of the ETS. According to it, all installations in the system have a maximum amount of GHG emissions set. Member States then auction most of the allowances in the ETS, while some are allocated for free. The set of free allowances granted to auctioned allowances differs depending on the sector, as well as over time. While in 2013 80% of allowances were issued free of charge to the processing industry, in 2020 the sector had to purchase 70% of the emission allowances. Some are also kept as buffers and reserve mechanisms.
