Sustainability

In most environmental commodity markets, demand for capital to fund emission-reduction projects vastly outstrips supply. End users of emissions certificates (e.g., energy producers and other “emitters”) usually buy these certificates “on demand” for their compliance (and sometimes voluntary) needs. As a result, they are “price takers” and are unwilling to advance the capital needed to develop those projects.

End users also typically avoid entering into long-term advance purchase agreements due to price risk and/or hedging costs, which results in limited capital for promising projects. To address this, ECP provides differentiated capital through commodity prepayments, long-term purchase agreements, and other innovative offtake agreements. By using such risk transfer mechanisms, project developers and clean energy producers can access the financing needed to advance their programs.

Our unique capital base and innovative structuring bolsters undersupplied decarbonization markets and accelerates project development. Our investments produce quantifiable impacts, including reduced emissions, accelerated financing for decarbonization and environmental protection projects, and the increased creation, adoption, and integration of sustainability initiatives.

Though traded commodity investments have less direct and measurable impact outcomes, our specialized knowledge contributes to the enhanced integrity of these markets and their efficacy in reducing emissions.

Our participation can result in increased efficiency of pricing externalities, improved effectiveness of emissions regulations, and higher government revenues for environmental use resulting from increased demand for environmental commodities in public auctions.