Green Premium Certificates
Producers of low carbon fuels invest large amounts of capital in premium production facilities so that their clients can value down stream CO2e abatement claims. Green Premium Certificates [GPCs] are a family of instruments that value and represent the emissions attributes of low carbon fuels, helping producers to commercialise their products and buyers to off-set scope 1, 2 & 3 emissions.
Upstream investment for downstream value
A key principle of Article 6 of the Paris agreement is that carbon crediting methods focus on the point of abatement, for example an emissions reduction of a metric tonne of CO2e. For producers of low carbon fuels this means the environmental attributes of their product must be financed for the benefit of downstream customers claims. Various forms of Green Premium Certificates unbundle these attributes from base fuel pricing enabling supply chains to develop.
Sustainable aviation fuels [SAF] offer credible candidate technologies to supplement and replace jet fuel. Producers claim pure SAF can create an 80%+ abatement at the point of use with potential to blend into jet fuel supply chains. Like for like replacement of jet fuel currently commands a ~30% premium. With tax credits emerging for blended shipments, green premium credits are essential to finance and manage provenance.
Learn more about SAF premiums here
Green Premium Certificates are emerging for SAF under the Sustainable Aviation Fuel registry
Hydrogen and ammonia production has traditionally been designed for relatively small scale industrial use using methane. Now its potential to decarbonize, power stations, steel making and shipping has be realised. Several variant methods of production have developed including blue, grey and premium green H2, the latter being produced using 100% renewable energy. First Carbon Investments is working with www.h2c.org and other global registries and governance bodies to deliver Hydrogen Green Premium Certificates. If your project could benefit,
Green Premium Certificates [GPCs] offer producers, off-takes and low carbon fuel users portable and unitised documents of source, unbundled from more competitive fuel pricing. They reflect marginal abatement costs of low carbon fuels and dramatically improve development opportunities for supply chain finance. FCI couple them with forward financing of premiums alongside our network of bank, government and impact investor participants. Together we are catalysing the low carbon transformation.
Green Premium Certificates explained
A GPC is a tradeable certificate that represents the holders legally recognised property right to environmental attributes and emissions-related claims, after using a metric ton of low carbon fuel. Each GPC is a unique certificate which is traded discreetly from the fuel, where rights to attributes and claims are explicitly carved out from supply and purchase [off-take] agreements. GPC attributes include independently verified claims rights, documents of origin and audit trails of emissions from production. A GPC can be retired by, or on behalf of its owner to claim usage of the corresponding low carbon fuel. Examples include a metric ton of green ammonia or hydrogen.
Each GPC acts as a portable certificate required to make emissions reduction claims under local legislation with each ton of fuel. It enables producers to unitize the intangible value of fuels, where molecular compounds do not reflect the emissions caused in production. For example, all ammonia has the NH3 molecule, but production processes can use nuclear electricity, grid electricity, methane, carbon capture or renewable electricity with different associated CO2 emissions.
GPCs are proposed to help develop global supply for low carbon fuels that command premium prices and support downstream emissions reduction claims, regulatory compliance and carbon markets. First Carbon Investments advance purchase GPCs from producers to provide catalytic finance to projects seeking viability. GPCs are issued by a growing number of global registries like www.h2c.org, SAFc Registry and www.trackingstandard.org