Did you know, as a Biodiesel (biofuels) producer, you can contract/sell the Carbon Credits associated with your fuel. In some cases, even as a Distributor (selling) or Fleet (using) biofuels, you can benefit from this opportunity. For those that qualify, you can roughly figure around 2¢ per gallon of production or sale of B100. Basically, you sell the credits and receive a check. Many times, this can be done in advance of producing the fuel and in some cases even prior to the beginning of plant operations. This program can assist in generating additional operating or even construction funds. 

This is a complex and yet straight-forward operation.  Complex, in that, there are a number of variables: what feedstock is used, method of production, etc. And straight-forward, in that, once this information is determined it’s simply putting the information into a formula to determine the value of the credits.

    Ex: A biodiesel plant makes 5 million gallons per year, using WVO (waste vegetable oil)

    as a feedstock, after figuring the MeOH usage, glycerin produced, and how the fuel will

    be used, it is determined that the B100 is able to produce Carbon Credits marketable at

    2¢ per gallon.

    5,000,000 gallons x 2¢ = $100,000.00 x 5 year contract = $500,000.00 to the producer.

This is for Carbon Credits, not RINs (Renewable Identification Numbers). These are two completely different subjects.

The concept of carbon credits came into existence as a result of increasing awareness of the need for pollution control. It was formalized in the Kyoto Protocol, an international agreement between 169 countries. Carbon credits are certificates awarded to countries that are successful in reducing emissions of greenhouse gases. While the United States is not currently a member of the Kyoto Protocol, we can in fact create and sell carbon credits based on quantifiable emission reductions.

In 2000 and earlier, this was a market for big power companies. This market slowly started to shift, allowing for alternative energies, but even then it was limited to large solar plants or major wind farms. The market had never been approached for smaller manufacturers of alternative fuels or mobile source emissions.

The credits themselves vary based on the plant, its location, the pollution in the surrounding area, the feedstock used, the best management practices of the plant, and who ultimately becomes the end customer. Once the credits have been proven, they are then calculated and verified against the records of the manufacturer. The credits are then packaged and certified, and marketed to a variety of customers, both institutional and private.

Many buyers are independent companies that purchase the credits to retire them from the market. Other buyers use the purchase of these credits as an opportunity to invest in alternative fuels and energies.

Some of the best opportunities afforded by this program is being able to lower the price of the fuel and/or expanding current operations. These practices encourage the use of Biodiesel in retail facilities and open up opportunities with new wholesale customers by offering biodiesel at a closer price.

The agreements are structured in a way that allows the customer to have very limited risk. There is no upfront cost. A low percentage consultant’s fee is paid after the credits are sold. As each customer is different, the amount of credits attributed to each plant and/or vehicle varies. Actual calculations and methodologies are proprietary therefore not disclosed. However, you as the customer will know how much your plant operations and your own customers have reduced emissions, as well as the price that the individual credits will net monetarily.  

For additional information send me an email: bob@pruitt.net , and I can help you start the process of turning your carbon credits into cash.