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Our customers must adapt to evolving market conditions, including environmental regulations and the demands of social responsibility. Shell Energy’s Environmental Solutions represent our commitment to help you respond to these challenges. Whether you are responding to regulatory mandates or pursuing the benefits of voluntary participation, Shell Energy can deliver solutions tailored to your needs.
Shell Energy’s Environmental Solutions are characterized by five key elements of service:
Our trading professionals bring nearly a decade of experience in North American emissions markets. In addition, we are able to leverage Shell’s experience in trading international carbon markets.
We feature a dedicated marketing and trading team for environmental products. Shell Energy professionals are regular speakers at industry conferences and customer events, and are actively involved in policy discussions. Our goal is to shape the design of new environmental markets to ensure they are liquid, deep and transparent, which helps bring price certainty and lower transaction costs.
Shell has set the pace in environmental products transactions:
- First to trade a carbon product usable under a US mandatory cap-and-trade program
- First to trade Regional Greenhouse Gas Initiative (RGGI) allowance future contract on the Chicago Climate Futures Exchange
- First to execute a transaction on European Union (EU) allowances
- First to take delivery of Certified Emission Reductions (CERs) under the Clean Development Mechanism program
Our broad portfolio positions us to trade in both compliance and voluntary markets across North America. Our markets and services include:
- Renewable Energy - Structured offtake agreements with renewable power developers; Renewable Energy Credits (RECs) for compliance with state Renewable Portfolio Standards; RECs for the voluntary market
- Carbon Products - Allowances for regional compliance markets such as RGGI and Alberta and credits for voluntary emissions targets
- Other Emissions Markets - Regional NOx markets and Federal SO2 Acid Rain program
Superior Credit Rating
Shell Energy’s environmental products are backed by a top-tier credit rating.
Shell Energy is active in all of the major environmental compliance markets in North America, and in many cases has been a market leader in their creation. For example, in 2008 we were the first company to trade Regional Greenhouse Gas Initiative futures contracts on the Chicago Climate Futures Exchange. We were also the first company to transact a futures contract on US federal compliance carbon allowances.
Shell Energy provides a range of products to meet your environmental compliance needs in the US markets. There are a number of current or future compliance programs that may be applicable to you:
- State Renewable Portfolio Standards
- Regional Greenhouse Gas Initiative (RGGI)
- Western Climate Initiative (WCI)
- Alberta Specified Gas Emitters Regulation
- US Federal (SO2) Acid Rain Program
- NOx State Implementation Plan (SIP) Call Budget Trading Program
- Houston-Galveston-Brazoria NOx Program
- RECLAIM (Regional Clean Air Incentives Market) NOx Program
More detail follows on the various renewable and greenhouse gas programs in North America - contact your Shell Energy representative for more information on SO2 and/or NOx programs, or click here for a list of our office locations and contact numbers.
State Renewable Portfolio Standards
- Program details: There are more than 25 states that have mandatory goals to promote the development of renewable energy generation.
- In most states, a requirement is placed on some or all load serving entities in that state to procure a certain percentage of their power load from renewable generation. In most markets, RECs are freely tradable and are used to demonstrate compliance with the renewable requirement (each REC represents one megawatt hour of renewable generation placed onto the power grid).
- In some states, there is also a requirement to deliver power into the region or state as well. The most active renewable energy markets include California, New Jersey, Connecticut, Massachusetts, and Texas. http://www.dsireusa.org/ Shell Energy Environmental Solutions: Shell Energy is active in all the major renewable markets in the US. For states with simple REC requirements, we can offer RECs with spot and forward delivery terms. For states with power scheduling requirements, we can take care of all the delivery requirements, and provide the RECs and/or renewable power on a firm or unit contingent (i.e. if, as and when produced) basis.
- Contact your Shell Energy representative for more information on renewable energy programs.
Regional Greenhouse Gas Initiative (RGGI)
- Program details: Trading market set up through a pact of 10 Northeastern and Mid-Atlantic states to cap and eventually reduce CO2 emissions from the power sector.
- RGGI is the first mandatory cap-and-trade program for regulating CO2 emissions in the US. The program’s goal is to cut power sector emissions by 10% below 2009 levels by 2019. All power generators in the region that have a capacity greater than 25 megawatts are required to participate. RGGI issues emissions allowances that must be submitted for compliance – these allowances can be freely traded and are fungible between states. The first government auction of allowances occurred in September 2008. http://www.rggi.org/
- Regulated states: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont.
- Shell Energy Environmental Solutions: Shell Energy trades and markets RGGI allowances and can offer risk management solutions (structured forward contracts and options) to help you manage your price exposure. Contact your
- Shell Energy representative for more information on the RGGI program.
Western Climate Initiative (WCI)
- Program details: Economy wide cap-and-trade program targeting an aggregate greenhouse gas reduction among seven US states, including California, and four Canadian provinces.
- The seven member states and four member provinces have established a target of lowering greenhouse gas (GHG) emissions by 15% below 2005 levels by 2020. The covered emissions include the six primary greenhouse gases: carbon dioxide, methane, nitrous oxide, hydroflourocarbons, perflourocarbons and sulfur hexafluoride. The WCI plans to implement a cap-and-trade program to achieve this goal. The first phase of the cap-and-trade program is projected to start in 2012. http://www.westernclimateinitiative.org/
- Participating states: Arizona, California, Montana, New Mexico, Oregon, Utah and Washington.
- Participating provinces: British Columbia, Ontario, Quebec and Manitoba.
- Shell Energy Environmental Solutions: Please contact your Shell Energy representative for more information on WCI.
Alberta Specified Gas Emitters Regulation
- Alberta implemented a program in 2007 whereby the largest emitters of greenhouse gases in the province are required to improve their emissions intensity every year.
- Approximately 100 facilities are required to reduce their emissions intensity by 12% over baseline levels (typically an average of 2003 to 2005 emissions levels) starting in 2007. Entities can comply by improving their emissions intensity figures, buying offsets, or paying $15/tonne into a technology fund. A limited supply of offsets is available in the Alberta market, since emission reduction projects must be located in Alberta to qualify. http://www.carbonoffsetsolutions.ca/index.htm
- Regulated Province: Alberta
- Shell Energy Environmental Solutions: Shell Energy was one of the first companies to transact on Alberta offsets, and has a limited supply available for compliance entities. We are also interested in talking to project developers looking to monetize their emission reduction projects, and facilities looking to sell any surplus Emission Performance Credits they may have generated by improving their emissions intensity beyond that required by the regulations. Contact your Shell Energy representative for more information on the Alberta program.
Many organizations have adopted voluntary environmental commitments, ranging from reducing their emissions, managing their consumption of water, supporting renewable power, on-site recycling efforts etc. The environmental products offered by Shell Energy can help with achieving many of these objectives. When pursuing voluntary commitments, Shell Energy can provide carbon offsets (VERs) and RECs to help you achieve your voluntary goals.Carbon Offsets
Market need: For organizations that have committed to reducing their direct emissions of greenhouse gases, or the emissions associated with their products, there comes a point where it is too expensive to do so internally. Carbon offsets represent project-based reductions of greenhouse gas (GHG) emissions that can be less expensive to achieve than reducing your direct emissions. These reductions can be used to offset an organization’s own emissions.
Shell Energy Environmental Solutions: Shell Energy markets high-quality carbon offsets, otherwise known as Verified Emission Reductions (VERs). One VER represents the reduction of one metric ton of greenhouse gas (GHG) emissions. A limited number of verification standards for carbon offsets have been established by organizations to ensure the credibility of these products, such as:
- Verified Carbon Standard
- The Gold Standard
- The Climate Action Reserve
Market need: For organizations that would like to support the development of more renewable power generation, a simple option involves the acquisition of (RECs). RECs represent the environmental attributes of one-megawatt hour (MWh) of electricity generated from renewable sources. Purchasing a REC provides an additional revenue stream for renewable project developers, which supports the economics of constructing the facility. RECs achieve the same environmental result of contracting to purchase renewable power, but without the complexities and inefficiencies of scheduling that power from an intermittent resource across the power grid.
Shell Energy Environmental Solutions: Shell Energy can provide RECs from almost every state in the United States and from many Canadian provinces, and in some cases can match the geographic location of the renewable facility with that of the customer.Cap and Trade
As society focuses on tackling the challenges of air emissions, market-based solutions have emerged as a means for reducing emissions in the most economically efficient manner, i.e. at the lowest possible cost. Cap-and-trade programs cap the levels of emissions for a particular sector of the economy, but provide compliance flexibility to capped facilities in order to contain costs. Two main products are often used in these programs – allowances and offsets.Contact your Shell Energy representative to discuss a course of action. Shell Energy North America
Gas, Power and Environmental Solutions
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- Two Houston Center, Plaza Level I
- 909 Fannin Street
- Houston, Texas 77010
- Customer Service: 800.281.2824