Carbon Offset Aggregation Cooperative of British Columbia Helping the Resource and Transportation Sectors Go Green 1

What is this all about? Climate change and reducing greenhouse gases (ghg’s) are at the centre of discussion and action all over the world, and BC is a Canadian leader in taking pro-active steps on the issues. Heavy equipment and heavy trucks consume billions of litres of diesel per year in their normal operations, costing billions of dollars, and emitting millions of tonnes of greenhouse gases. 2

What is a Carbon Offset? Greenhouse gases contribute to global warming regardless of where or how they are produced – driving at home, travelling abroad, operating machinery or heating buildings A carbon offset represents a reduction in greenhouse gas emissions that organizations and individuals can use to counter their own emissions. It is measured in tonnes of carbon dioxide equivalents (CO2e). With cap-and-trade in 2012 we will be looking at a sale or a transfer or a trade of carbon offsets? 3

What is a Carbon Offset? An emitter buys offsets to compensate for ghg’s emitted during the course of business, to get to a Zero net emissions. 4

How does it all work? Offsets can be generated from energy efficiencies, by reducing the amount of fossil fuels (diesel) utilized in heavy equipment through the addition of technology, modification of equipment, fuel switching (using a percentage of bio-fuels) and education of operators that leads to behavioral change, thus reducing the amount of ghg’s emitted. 5

How will you produce carbon offsets? Co-op members will produce offsets by installing technologies and mechanical interventions, and working with operators on heavy industrial equipment (trucking, log harvesting, road building, mining and oil & gas construction, etc.) such as: information sessions on operator behavior multi-dats, to track fuel consumption cab heaters to reduce idle time fuel meters thermostat controls on fans and coolers reversible fans 6

Historical baselines will be developed for each piece of machinery or truck, and then a “protocol” to ensure that the offsets meet all validation requirements Technology will track fuel consumption electronically, and upload the data to the Co-op Reductions in fuel consumption will be converted by a transparent, verifiable formula into carbon offsets and sold by the Co-op behalf of producers How will they be measured? 7

The Co-op gathers (aggregates) the total offsets produced by its members and sells, trades and/or transfers them The proceeds of the sale of the offsets will be returned to the member producer as a dividend, less a percentage for administration, which remains with the Co-op. What happens next? 8

Who is buying them? The Pacific Carbon Trust is a Crown corporation of the Government of BC, created to deliver quality made-in-BC greenhouse gas offsets to help clients reduce their carbon footprint and drive the growth of BC's low-carbon economy. There is an active carbon offset market in the US and Europe, and offsets will be more in demand in Canada as cap and trade regulations are implemented in the next few years. 9

What do they use them for? Companies, governments, or other entities buy carbon offsets in order to comply with caps on the total amount of carbon dioxide they are allowed to emit. In 2006, about $5.5 billion of carbon offsets were purchased in the compliance market, representing about 1.6 billion metric tons of CO 2 e reductions 10

What are they worth? 1000 L of diesel = 3Tons of greenhouse gasses For every 1000L less diesel you can prove you avoided using, you have created 3 Tons of offsets To give an idea of scale, the BC government needs 1,000,000 T per year to meet its targets In forestry alone, we can generate 100,000 T per year, which equates to a 33 million litre reduction in diesel consumption 11

WHY USE THE CO-OP? Simple… Carbon offset acceptability Additionality: An offset project is additional if anthropogenic emissions of GHGs by sources are reduced below those that would have occurred in the absence of the registered project activity. Other considerations: Accurate quantification, auditing, unique ownership, permanence, leakage, sustainability considerations, stakeholder consultation, and timing. 12

WHY USE THE CO-OP? The ability to reduce diesel consumption The ability to report and sell carbon offsets Minimal requirement for contractor to be involved. Co-op will train and implement system timelines A data tracking system, that will not only record and report fuel reductions, but will have the ability to report operational information for business and operational decision making 13

WHY USE THE CO-OP? Potential up-front capital for transition Co-op will administer all data reporting and required paperwork for carbon offset trading For efficiency implementation, no payment required if no savings are realized Co-op will offer business analysis services to member and/or suggest improvements for consideration 14

When will it be operational? We are working with world transportation protocol expert Dr Jurg Grutter from Switzerland on a first-of- its-kind-in-the-world protocol 3 rd party verification and review of the protocol- 4 months Pilots beginning in forestry We expect to be fully operational within a year Interested contractors are now starting to track fuel consumption by machine, in order to have their historical data ready to go 15

How do you get involved? Contact the Co-op to get on the interest and information distribution list as the project moves forward Join the Co-op Get the technology put in your equipment Educate your crew about what we’re doing and why Stay current with the Co-op as it develops, and promote it to your fellow companies and contractors 16

For more information: George Stedeford, CGA Carbon Offset Aggregation Cooperative of British Columbia Phone: (250) Fax: (250) Toll Free: