Isramart: Carbon mitigation, carbon market opportunities for biofuels

Isramart news:
In Washington at the Advanced Biofuels Leadership Conference, Rick Gilmore, President/CEO of The GIC Group discussed possible carbon mitigation strategies which the biofuel industry could pursue as U.S. regulations and mandates come online. Of key interest to industry players, Gilmore highlighted the potential revenue gains which biofuels stand to receive through carbon markets. “All of these new biofuel production technologies, improved feedstocks, yield increases- these are efficiency gains; and our GIC-ACI (Ag Carbon Index) measures that increased value and maximizes that value over time,” said Gilmore. The GIC-ACI is a first mover product that responds to a missing link in the low-carbon economy and will facilitate the biofuel industry in meeting marketplace challenges. According to Gilmore, GIC’s index provides all players in the biofuel and agribusiness sector a benchmark and a hedging vehicle for carbon offset opportunities worldwide.

In Gilmore’s presentation, he explained that the biofuel industry could use the index to capture the financial risks and benefits associated with a firm’s carbon footprint and the introduction of new production technologies or biofuel feedstocks. Further, second and third generation biofuels like algae or camelina, will benefit from carbon offset revenues through the index’s ability to reflect the full value of their biofuel efficiencies. GIC and its partner, Clear Carbon, are currently working with clients to determine their footprints and monetize their carbon strategies through the use of GIC-ACI. They are also developing protocols for clients on new products.

In Gilmore’s presentation, he underscored the fact that the biofuel fuel industry has carbon mitigation strategies which have focused only on production agriculture, which fails to address the equally important secondary industries, such as new biofuel production technology, feedstocks, as well as fertilizer, manufacturing, and seed companies. According to GIC, production agriculture and related secondary industries account for between 10 and 35 percent of developing and developed countries’ emissions. “Treating production agriculture and related secondary industries as two separate entities ignores the interrelated and global nature of agribusiness,” said Dr. Gilmore. “Moreover, it also substantially underestimates the biofuel industry’s potential for mitigating GHG emissions.”

In his presentation, Gilmore pointed out the biofuels producers can utilize the index as a hedge strategy to manage the risk of potential fluctuations in the carbon price. GIC is now in road show for GIC-ACI. “We’re ready to register the index. Investor interest is strong,” Gilmore said, “and the timeline is short.” The Advanced Biofuels Leadership Conference presentation occasioned investor meetings on the index and a broad range of discussions on GIC and Clear Carbon’s joint services now underway.

Gilmore stressed that the forecast for continued growth of primary and secondary markets for GHG related credits underscores the importance of introducing an index for global agribusiness now. “Not only will our index help the biofuel industry make better financial decisions in a carbon constrained economy,” Gilmore concluded, “but it will introduce a new revenue stream in which all sectors of global agriculture participate either directly or indirectly.”