FAQs
Frequently Asked Questions
What does AgCert™ do? |
| AgCert™ produces and sells greenhouse gas (GHG) emissions offsets from agricultural and other sources. |
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| What is the relationship between AgCert and AES? |
| AgCert is a wholly owned AES subsidiary that operates as part of the AES Climate Solutions business. |
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| Where does the company have operations? Why? |
| AgCert™ has activities in Ireland, Brazil, Mexico, Canada and the United States. Our company headquarters are in Ireland. Project activities have been focused on Brazil and Mexico who are among the countries eligible to participate in projects associated with the Clean Development Mechanism (CDM) under the Kyoto protocol and EU Emission Trading Scheme. |
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| Who are AgCert™ customers? |
| Our primary customers are large industrial emitters and energy traders. However, we are also presently building customer relationships with governments, climate change funds and consumers. |
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| Will AgCert™ make any real difference to global warming? |
| Yes. Our projects reduce emissions. Implementing AgCert™'s methodology on farms results in the mitigation of significant tonnage of carbon dioxide equivalent which would not otherwise have been realized. |
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The Market
What is the Kyoto Protocol? |
| Kyoto was designed to foster development in and transfer wealth to developing countries as well as to reduce GHG emissions. Global warming is a global problem, and the EU ETS and Kyoto Protocol have been structured to encourage (via financial penalties) reduced emissions, in the most economically viable way. |
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| Where are the major centers for carbon trading? |
| Today, the major trading centre is in Europe, in large part due to the presence of the EU ETS. However, a nascent market is taking shape in a many other locations in the world including Japan, Canada and even the United States. |
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| Is there any significant volume being traded? |
| Trading in Offsets started in 2003 and has grown rapidly. In 2004 an estimated 94 million tonnes of CO2 equivalent were traded. In 2007 2.7 Gt were traded at a value of Euro 40 bn. This was an increase of 2006 of 64% in volume and 80% in value, according to PointCarbon. |
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| How are individual targets for emissions reductions arrived at? |
| The Kyoto Protocol sets legally binding limits on Greenhouse Gas emissions in Annex 1 countries and these countries have committed to reduce their GHG emissions by, on average, 5.2 per cent as compared with their 1990 levels. Each member of state of the EU has ratified the Kyoto Protocol, which requires the EU to reduce its GHG emissions by 8 per cent below 1990 levels in the first commitment period (2008-2012). The EU's commitment is apportioned between the Member States under a Burden Sharing Agreement ("BSA"). Furthermore, the EU has voluntarily committed to reduce its GHG emissions sooner than required under the Kyoto Protocol. As a result, the EU has implemented the EU-ETS, which came into effect on 1 January 2005 and is the first regulatory enforced commercial market for Offsets in the world. The EU-ETS requires each Member State to draw up a National Allocation Plan ("NAP") which states the total number of allowances that it intends to allocate for the relevant period, consistent with its actual and projected progress towards its obligations under the BSA and other factors, and how it intends to allocate those allowances to individual emitters covered by the EU-ETS. |
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| Are these targets mandatory or voluntary? |
| EU-ETS and Kyoto targets are mandatory and excesses over allowances will result in financial penalties. During phase I of the EU-ETS, any emitter exceeding its GHG emissions limit in any given year will be subject to a fine of (Euro 40 per tCO2e in excess of its allowed limit) as well as having to reduce emissions or purchase such number of Offsets to correct the excess over such limit. In addition, the emitter will be publicly named on the European Union's website. During phase II, the fine will be increased to ?100 per tCO2e in excess of the limit. Therefore there is a strong incentive for GHG emitters to purchase GHG Offsets if they are unable to reduce their emissions in order to avoid these penalties. The only emission reduction credits other than EUAs that may be used to offset emissions throughout phase I and phase II of the EU-ETS are CERs arising from CDM Projects. |
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