Q: Are projects that currently sell offsets into CCX eligible under the RFP?
A: The short answer is yes, we are open to projects under the sectors of the CCX. There could be some ownership issues to navigate, since the offsets are part of the CCX bubble. We have not done a transaction on this to date to retrieve offsets out of the CCX bubble. So if you could provide as much information as possible on how to address clear ownership transfer.
Q: Are there particular projects that could be submitted through RFP Window #2 that the Initiative is particularly interested in?
A: The Initiative Participants are open to a wide variety of projects. One of the objectives of this RFP is to see what other types of greenhouse gas reduction projects might yield high quality offsets in addition to those eligible under RGGI.
Q: What’s the appetite for looking at projects with reference to a recognized exchange rather than a fixed price?
Will projects whose price is relative to a recognized exchange (e.g. EU ETS or CCX) rather than a fixed price, be considered under the US OAI?
A: The Initiative is open to variable pricing structures, which would be incorporated into our overall review of the project. It is difficult to discuss price in isolation, as we look at the project as a whole. In the short term, it is difficult to point to an index that would be appropriate for out years.
Q: Is the RFP on the radar in Washington, DC?
A: One of the roles of the administrators is to inform policy makers and stakeholders about this RFP process. It is the Initiative’s intention to inform others and to provide lessons learned from the USGHGOAI The Initiative is widely publicized, including to decision makers in Washington.
Q: Will there be a 2008 RFP?
A:A 2008 RFP will be dependent on the volume and quality of projects received under this RFP.
Q: No one has currently established a Memorandum of Understanding (MOU) with a RGGI state. If you are proposing a project located in a non RGGI state, is there a way to get an MOU signed?
A: RGGI has identified offsets as one of their priority areas and they plan to have an organization in New York City that will be responsible for the incorporation of offsets into RGGI. This new organization will oversee the establishment of MOU’s. The Initiative Participants are interested in seeing MOUs developed, however, RGGI still needs to establish the criteria for the MOU’s. We are anticipating that the MOU will be addressed in concert with this RFP and could be addressed after project implementation.
Q: Will biological sequestration projects currently enrolled in the Farm Bill be eligible?
A: Projects will necessarily be excluded if they are receiving some non-climate change specific federal funds. The project applicant will still have to show that the funding from this RFP is necessary to make the project go forward.
Q: Is there any information concerning the agent-principal relationship from proposals that don’t directly own or control the offsets from the project? e.g. if they are the majority equity owner, or have purchased the offsets outright.
A: The applicant will need to clearly demonstrate ownership of the offsets. Because of the intangible nature of the commodity, we need to see the transfer from the owner, to the intermediary party then to the Climate Trust. We are looking for new projects, so this could not take place with an existing project, but could be from the expansion of an existing project, as long as a clear demonstration of ownership can be made.
Q: If there is a project that would cross over into several different sectors under RGGI, is that acceptable?
A: It is acceptable if there are several different types of offsets under one project. The applicant needs to be clear on the total volume of offsets, especially for the different types of gases. Each RGGI sector has different requirements regarding additionality and monitoring, so as long as those are adequately addressed this would be acceptable.
Q: Is there any guidance on the form of the ERPA?
A: An Emission Reduction Purchase Agreement, is the contract vehicle for purchasing offsets. Guidance will be provide to companies invited into Phase 2 on ERPA structuring and requirements. The Climate Trust has developed standard ERPA contracting language, and will do some customization for this particular initiative, drawing from the International Emission Trading Association’s ERPA template.
Q: For non-RGGI projects, is there an opportunity to have a dialogue on additionality?
A; Additionality will be assessed on a project by project basis. If there is a specific question about whether or not your project is additional, you may submit those via email to Matt Tidwell mtidwell@climatetrust.org.
Q: There is no reference to an external standard; is there an intent to have assessment cross-referenced to the Voluntary Carbon Standard or any other emerging standards?
A: At this stage, no. We will be looking at projects on a project by project basis. If there are projects that have been approved under the Clean Development Mechanism of Kyoto Protocol, we will incorporate some of those standards. The Voluntary Carbon Standard and Greenhouse Gas Product Standard are still under development and thus, will not be referenced under this initiative.
Q: Can projects that were previously submitted to The Climate Trust under prior RFPs be given an expedited status to Phase 2?
A: No, the funders of this RFP are different, and as such have separate criteria and priorities. If you did submit a project under a past Climate Trust RFP, we can provide feedback on that submission.
Q: Are there different time tracts associated with the two windows?
A: No, all applications are due on April 23, 2007. The two windows will be reviewed in parallel. Please submit an application through only one window.
Q: Is there preference given to RGGI projects, vs. RGGI projects in non-RGGI states vs. non-RGGI projects in RGGI states?
A: There is no preference. We are looking first at quality and cost effectiveness. There may be an advantage to RGGI projects in RGGI states, because it is most clear how the offsets could be used by the Initiative Participants.
Q: Can projects be aggregated if they do not individually meet the 200,000 short ton requirement?
A: Generally, the better different projects can be folded into one ERPA the better. Different projects submitted under one proposal should be as similar as possible.
Q: Should one participate in this RFP, if there may be some delays in project development and delivery of offsets? If my projects development and/or delivery of offset tons is somewhat uncertain, should I still submit a proposal?
A: The closer to investment-ready a project is, the stronger the proposal. Projects that provide clear documentation regarding when the project will be implemented and that are able to deliver all of the offsets within 20 years of implementation will be given preference (unless it is a bio-sequestration project).
Q: Is the Initiative open to Carbon Capture and Storage projects under the General Window (Window #2)?
A: The Initiative Participants will consider projects from any sector.
Q: Are renewable energy projects eligible under this RFP? In order to overcome financial barriers, many renewable energy projects require a combination of several incentives. How will renewable projects be assessed?
A: There are some requirements in RGGI that specifically address renewable energy; projects that receive system benefit charge funds are ineligible. If you are proposing selling the carbon benefit from a renewable project as an offset, the sale renewable energy certificates (REC’s) from that project are precluded.. Other supplemental funding sources for a project can be allowed, as long as a clear demonstration of need for the additional offset funding is made.
Q: In light of the recent Western Regional Climate Action Initiative, are there any non-RGGI states that are in the process of developing MOU’s with RGGI states?
A: No, no MOU’s have been established to date with non-RGGI states. However, we are expecting that there will be MOUs and linkages between the Western Regional Climate Action Initiative participant states and RGGI.
Q: Has there been an MOU signed between RGGI and California?
A: There is currently no MOU signed, but rather an expressed intent to work together to develop linkages between the two systems.
Q: Are you looking for a fixed price per ton, or can the price per ton fluctuate in the future based on the carbon market?
A: The price per ton can change over time. We are open to different pricing structures, but price certainty is important in order to complete the purchasing agreements.
Q: What are you looking for in terms of project reliability?
A: We define project reliability as an assurance that the project will be implemented and that it will deliver the amount the offsets proposed.
Q: What are you looking for in terms of proposer reliability, specifically from public sector partners?
A: Because offset projects are often long term contracts, we are looking for project partner’s that will be able to see a project through from start to finish. We will ask questions such as:
Has the organization implemented an offset project before?
How long has the proposing entity been in existence?
What is the organization’s competency in implementing projects of this type?
How reliable is the proposing entity when it comes to actually doing what is proposed in the project application?
For public sector partners, there will need to be appropriate documentation attesting to the fact that the project partner has the right to sell the offsets.
Q: What other considerations or criteria are the Initiative Participants interested in addressing? For example for biological sequestration, is a 70-year project term necessary? What type of insurance is needed? Which registry should be used to register my project? etc.
A: For this RFP process, the Initiative will use the established standards of The Climate Trust and will be advising RGGI and other policy makers as the process moves forward regarding these issues.
Q: For sequestration projects, will the Participants be looking for contracts that address permanence?
A: Yes. For afforestation projects that fall under RGGI, there are specific requirements in the RGGI Model Rule that must be satisfied. For non-afforestation projects, the Initiative is open to other types of risk mitigation structures.
Q: What are the views of the Initiative Participants regarding California’s Climate Action Registry’s approach to leakage and additionality for forestry-based projects?
A: If we invest in a California-based forestry project, the project would likely need to meet the California standards and those projects should incorporate the existing California Climate Action Registry methodologies in their proposals.
Q: If there is a forestry-based project in a RGGI state, to what extent will the Initiative Participants look at the California forestry protocols for guidance on project assessment?
A: We will be looking for guidance from the protocols, but will look at each project on a project-by-project basis, so a project that does not follow the protocols in lock step will not automatically be disqualified.
Q: Are you interested in projects that will keep forests as forests, specifically, maintaining working forests?
A: We are open to those project types, but there are some questions concerning the carbon balance of these types of projects and so judgment will be based on a project-by-project basis.
Q: How firm is the requirement that we will acquire only “new” projects, i.e. for projects that could be implemented in six months, are we asking the project developers to wait?
A: We are firm on this requirement, but recognize that due to the length of this process there is a very small window for projects that will be implemented during the acquisition process. It is, however, much more difficult to demonstrate the additionality of the project if it is implemented before a contract has been finalized.
Q: Are energy efficiency projects that already receive rebates from utilities eligible?
A: We will likely default to the RGGI requirements which specifically states that projects receiving programmatic funds will not be eligible under RGGI and therefore will not be eligible under the Initiative.
Q: Can you provide some clarity on what is meant by high quality offsets?
A: A project’s quality is defined by how well a project meets the additionality criteria; how real, measurable and verifiable the offsets are; and how well an entity is able to demonstrate the emissions reduction, avoidance or sequestration resulting from an offset project.
Q: Should a project proposer be discouraged if the state in which its project is located has not signed an MOU with a RGGI state by the time the application is due?
