Carbon Streaming Corporation has entered into a carbon credit streaming agreement (“Carbon Stream”) with Will Solutions Inc. (“Will Solutions”), an established operator of carbon projects, to scale its Sustainable Community Projects (the “Projects”) in Quebec and Ontario, Canada. These grouped Projects enroll and reward members (including small and medium enterprises (“SMEs”), small municipalities, non-profit organizations and individual proprietorships) for greenhouse gas (“GHG”) emission reductions through waste diversion, conversion and energy efficiency initiatives, with plans to expand into transport.
• The Projects are expected to generate over 100 million Verified Carbon Units (“VCUs”) over the next 10 years, which will be independently verified and registered by Verra.
• Carbon Streaming will receive 50% of the VCUs generated by the Projects, up to a maximum of 44.1 million carbon credits.
• Will Solutions is expected to make its first delivery under the Carbon Stream of approximately 425,000 to 525,000 VCUs in the second half of calendar year 2023, ramping up to approximately 10 million VCUs in 2030.
• Carbon Streaming has made an initial upfront cash investment of US$4 million on closing, with additional payments of up to US$16 million to be made as the Projects achieve implementation and new member enrollment milestones.
• The Company will also make ongoing delivery payments to Will Solutions for each VCU that is sold under the Carbon Stream.
• With the Projects located in a desirable jurisdiction and a high concentration of emission reductions coming from methane avoidance projects, the Company expects VCUs generated to be sold at a significant premium to the Global Emissions Offset (“GEO”) price.
• The Projects focus on enrolling small emitters (under 25,000 tCO2e per year) that are implementing uncommon practices to reduce GHG emissions across waste, energy and in time, transport initiatives.
• Approximately 70% of emissions reductions anticipated from the Projects would be considered methane avoidance, delivering action towards the UN Global Methane Pledge.
• The Projects deliver on six UN Sustainable Development Goals, including Climate Action (13), Industry, Innovation and Infrastructure (9), Reduced Inequalities (10), Sustainable Cities and Communities (11), Responsible Consumption and Production (12), and Partnerships for the Goals (17).
Carbon Streaming Founder and CEO Justin Cochrane stated: “We are delighted to announce our first Canadian carbon stream with Will Solutions. The Sustainable Community Projects are an excellent addition to our portfolio and highlight what Canadians can do to reduce emissions. The Will Solutions team is a pioneer in carbon, having developed the Verra certified methodology and grown the Sustainable Community right here in our back yard for over a decade. Success in climate action takes all of us, and Will Solutions’ grouped approach is proof that together, we can achieve more.”
“We are thrilled to partner with Carbon Streaming to accelerate growth, increase capacity, enroll more members and scale emissions reductions across Quebec and Ontario,” said Martin Clermont, President of Will Solutions. “Carbon Streaming’s investment gives us the additional funding to engage thousands more Canadian SMEs in climate action today. The stream also allows us to expand the verification methodology we have developed in collaboration with Verra to include transport emissions reductions to these initiatives, as well as optimize operations by increasing the capacity to process billions of transactions more efficiently in a secure and automated way.”
Will Solutions operates one of the largest grouped projects to be registered with Verra in Canada and has been successfully generating VCUs since 2010 using the VM0018 methodology it developed. Buyers of these VCUs have included large Canadian corporations, including major financial institutions, pension funds, governmental organizations, industrials and food companies. With Will Solutions’ strong track record of growing membership, proceeds from the Carbon Stream will be used to further scale the Projects by adding to Will Solutions’ sales and marketing team to support new membership enrollment, and improving automation, monitoring and reporting.
The Projects are expected to reduce more than 100 million tCO2e emissions and generate an equivalent number of carbon credits. Over the term of the Carbon Stream, Carbon Streaming will receive 50% of the VCUs generated by the Projects up to a maximum of 44.1 million VCUs, and will have the option to renew the Carbon Stream for an additional 10 years. Will Solutions is expected to make its first delivery under the Carbon Stream of approximately 425,000 to 525,000 VCUs in the second half of calendar year 2023, scaling to approximately 10 million VCUs in 2030. Emissions reductions generated by the Projects will be independently verified and registered by Verra.
Under the terms of the Carbon Stream, the Company will make an upfront deposit of up to US$20 million. The first instalment of US$4 million was paid on closing, and the Company will make additional payments of up to US$16 million as the Projects achieve implementation and new member enrollment milestones. Carbon Streaming will also make ongoing delivery payments to Will Solutions for each VCU sold under the Carbon Stream. Ongoing delivery payments will be in a range consistent with the Company’s other stream investments.
Over the last three months, the pricing of VCUs sold by Will Solutions ranged from two to five times the GEO spot price. Carbon Streaming anticipates that VCUs generated by the Projects will continue to command premium pricing compared to the GEO price given the desirable location of the Projects as well as the large proportion of emission reductions from methane avoidance projects. Methane is the second most abundant anthropogenic GHG, with more than 80 times the global warming potential of CO2 in the first 20 years of reaching the atmosphere. Reducing methane provides a quick benefit of limiting near-term temperature rise.1