One of the biggest business success stories in the last decade has been Elon Musk led Tesla. But it may come as a surprise to many that Tesla didn’t become the powerful institution it is with its EV sales1 alone. Even with a well performing last quarter,2 a considerable share of its revenue came from regulatory (carbon) credits3 - this after a jump of 116% in its carbon credit sales earlier this year.4
Carbon credits contributed substantially to the company’s in 20205 In fact in 2021 Tesla reportedly earned more from credits and bitcoin than cars.6
Tesla is one among a few companies that have recognized the potential for a carbon credit market early. The Taskforce on Scaling Voluntary Carbon Markets (TSVCM) and McKinsey estimate that demand for carbon credits could increase by a factor of 15 or more by 2030 and by a factor of up to 100 by 2050. Overall, the market for carbon credits could be worth upward of $50 billion in 2030. The evidence of the increasing cost of carbon credits is significant. For instance, European carbon prices broke above €98 a tonne for the first time ever, after gas prices returned to record levels, resulting in higher emissions and demand for permits.
This is why you need to know about ShiftCarbon (CSE:TSE | OTC: UTOLF), a complete decarbonization solution. ShiftCarbon operates two key verticals - ShiftCarbon Measure - a carbon accounting tool for businesses of all sizes and ShiftCarbon Offset - a Carbon Offset platform and API that allows businesses to purchase offsets or integrate them into their own applications (example - when buying a train ticket).
The company’s third vertical MRV (Measurement, Reporting and Verification) automation will bring together its successful legacy in IoT and recent carbon acquisitions to disrupt the way carbon credits are created and measured at scale.
The company recently changed its name from TraceSafe to solidify its position in the Net Zero economy.
Press Release:
TraceSafe announces corporate name change to ShiftCarbon
ShiftCarbon (CSE:TSE | OTC: UTOLF) is making quick progress and offering more value to customers than other existing players. Here’s a deep dive on why the company will shake up the carbon market with its unique solutions and robust strategy.
Press Release
TraceSafe acquires carbon offset marketplace
Currently, out of 5,230 companies with $1 billion+ valuations that are publicly listed in North America and Europe - only 457 (8.7%) companies have publicly announced some kind of plan to reduce GHG emissions as of May 25, 2021.
This does not mean that the companies have actually achieved any reductions. Only that they are talking about trying to implement strategies (many of which they have not even started).
This chart below from Mckinsey shows how this demand will need to scale.
Upon the conclusion of the COP26 conference in Glasgow, Scotland, 632 of the world’s largest 2000 public companies by revenue announced plans to achieve Net Zero greenhouse gas emissions7
More companies are expected to get on-board as the world’s biggest banks and financial corporations managing trillions of dollars, like the US Federal Reserve8 and institutions like Blackrock and Vanguard9 have indicated the criticality of climate action goals for investors.
To meet these goals, at least two-thirds of companies will rely on voluntary carbon credits.
Because many mid-size and large organizations will be looking for the same limited pool of high-quality carbon credits, we are bound to experience “Giffen Good”11—a very rare type of commodity whose demand rises when prices rise and falls when prices fall.
Corporations can’t exactly substitute an “oxygen credit” for a carbon credit when the latter is no longer available.
Many experts are already calling for significant price hikes in carbon to come very soon.
According to a recent Nature journal study,12 US carbon prices should be 3.6x higher than they currently are, with prices closer to $185.13
As demand for Voluntary Carbon Markets (VCM) credits increases, so does the price, further increasing demand… hence, we have a Giffen Good.
But not all carbon credits are created equal, and those that are buying VCM’s are seeking more transparency and tangible social development additionalities that go beyond nature-based projects.
Corporate buyers require additional transparency, standardization and accountability from VCM vendors.14
There have already been calls for restrictions on using older, lower-quality credits,15 including nations putting moratoriums on certain kinds of credits.16
Not to mention the number of scams taking place in the market from dodgy vendors slinging fraudulent credits.
The critical thing to remember in this scenario is that the price for carbon offsets (especially the ones that are high quality) will increase substantially over the next few years.“The price of offsets could rise significantly, creating a $190 billion market as early as 2030,” BloombergNEF analysts wrote in a 2022 market outlook.
The BloombergNEF report further adds that "The market is undersupplied by 2029 and prices shoot up to $224/ton. By 2050, even with technologies like direct air capture becoming more widely adopted, there is still only enough supply to meet less than 90% of demand and prices sit at $120/ton"
This is is where ShiftCarbon (CSE:TSE | OTC: UTOLF) will shake up the market as a provider of a complete solution that measures and provides certified offsets that are also fractionalized for every company’s specific needs.
Press Release
TraceSafe Introduces Carbon Credit Fractionalization
With an exclusive carbon pool that combines the most relevant and high quality credits at unmatched pricing, it's a rare opportunity for companies that will save millions of dollars down the line as regulatory norms get more stringent and offsets become more expensive.
ShiftCarbon (CSE:TSE | OTC: UTOLF) has a clear path for scale and growth potential through technologies that enable businesses to measure and offset their carbon emissions, acting as the picks and shovels for this industry. Their relationships with wholesale suppliers of carbon offsets, means that they get access to exclusive supply of carbon, at rates that are at the bottom of the supply chain. Using technology such as their Carbon API also allows for a deeper integration within a businesses operations, even allowing them to enable their customers to offset their experiences such as flights and cruises.
8,000 Companies on U.S. stock exchanges
Only 11% of companies are hitting their emissions goals.
[1] https://electrek.co/2022/10/02/tesla-tsla-delivered-a-record-343000-electric-cars-in-q3/
[2] https://www.nytimes.com/2022/10/19/business/telsa-profits-third-quarter-sales.html
[3] https://www.forbes.com/sites/qai/2022/09/08/tesla-stock-breakdown-by-the-numbers-how-does-tesla-make-money-in-2022/?sh=71c9c5d32c75
[4] https://carboncredits.com/tesla-regulatory-carbon-credit-sales-jumps-116/
[5] https://www.cnbc.com/2020/07/23/teslas-sale-of-environmental-credits-help-drive-to-profitability.html
[6] https://www.nature.com/articles/s41586-022-05224-9
[7] https://zerotracker.net/#companies-table[14] https://www.federalreserve.gov/newsevents/speech/brainard20210218a.htm
[8] https://www.reuters.com/article/us-climate-change-investors/investors-blackrock-vanguard-join-net-zero-effort-idUSKBN2BL0AX
[9] https://ccsi.columbia.edu/news/corporate-net-zero-pledges-bad-and-ugly
[10] https://www.investopedia.com/terms/g/giffen-good.asp
[11] https://www.nature.com/articles/s41586-022-05224-9
[12] https://apnews.com/article/science-climate-and-environment-government-politics-4c1e8783694201355f88012079367f27
[13] https://www.morganlewis.com/pubs/2022/09/recent-developments-in-voluntary-carbon-markets
[14] https://trove-research.com/wp-content/uploads/2021/11/Trove-Research_Scale-of-VCM_29-Oct-2020-2.pdf
[15] https://www.spglobal.com/commodityinsights/en/market-insights/blogs/energy-transition/071922-voluntary-carbon-markets-value-retention-host-countries
[16] https://news.mongabay.com/2022/06/thats-a-scam-indian-firms-redd-carbon-deal-in-the-drc-raises-concern/
[17] https://qz.com/2009746/not-all-carbon-offsets-are-a-scam-but-many-still-are
[18] https://www.mckinsey.com/capabilities/sustainability/our-insights/a-blueprint-for-scaling-voluntary-carbon-markets-to-meet-the-climate-challenge