If you’re at all involved in corporate clean energy or sustainability, you may have heard of a mechanism called a virtual power purchase agreement. But what does it entail?

A virtual power purchase agreement (vPPA) is a financial contract between a renewable energy generator (the seller) and an organization or corporation (the buyer). The PPA is “virtual” because the energy generated by the renewable resource is not delivered to the buyer, but rather sold into the local wholesale electricity market.

Click the image below to watch a quick video or read the blog below.

Virtual Power Purchase Agreement Cash Flows

In the contract, the buyer and seller agree upon a fixed price for electricity generated by the renewable resource, known as the strike price. The buyer pays the seller the fixed strike price for clean energy.

The seller delivers clean energy to the local wholesale market at the market price, which can vary by the hour and sometimes even more frequently. The seller then sends the buyer the market price. But because the wholesale market is always moving, the market price and strike price often differ.

When that happens, the seller may owe the buyer money, or vice versa. The two parties settle the difference every month with what is known as a settlement payment.

For instance, if the seller receives $36/MWh from the wholesale market but has a strike price with the buyer of $44/MWh, the buyer would send the seller an $8/MWh settlement payment. Conversely, if the market price is $54/MWh, and the strike price is $44/MWh, the seller would send the buyer a $10/MWh settlement payment.

This setup ensures that the renewable energy seller receives a predictable revenue stream while the buyer receives a financial hedge for its energy costs.

REC Flows

In addition to the cash flows, there is a flow of renewable energy credits, or RECs, associated with the renewable generation. The seller submits meter data from the renewable energy project to a certifying body to demonstrate they’ve produced clean energy. The certifier confirms the data’s validity and eligibility and sends RECs to the seller’s account, which the seller can then transfer to the buyer’s account.

Once the RECs are transferred, the buyer can use them to meet renewable energy goals, comply with regulatory requirements, or make environmental claims about their energy consumption.

To Sum Up….

To recap:

• 1. The seller enters a financial contract with the buyer for clean electricity at a fixed price.
• 2. The seller produces renewable electricity and earns RECs for the energy produced.
• 3. The seller sells the electricity into the grid at the market price.
• 4. Based on the difference between the market price and the contracted fixed price, the buyer pays the seller or vice versa.
• 5. The seller transfers RECs to the buyer, enabling the buyer to claim the renewable energy benefits.

Virtual power purchase agreements allow corporations and organizations to support renewable energy development, achieve sustainability goals, and manage energy cost risks, while renewable energy developers secure predictable revenue streams that allow them to finance and build new clean energy projects.

Verse uses sophisticated software and expert services to empower corporate clean energy buyers to plan, transact, and manage clean energy, including virtual power purchase agreements. We help you determine the right clean energy goal for your organization and provide an optimal roadmap to achieve it. Contact us to learn how we can make the process fast, easy, and affordable!

The oversubscribed round will support Verse Inc software product development and commercial scale.

San Francisco, May 22, 2024 – Verse Inc, whose software enables organizations to understand, plan, and manage clean energy, has raised a $20.5M Series A funding round. The investment, led by GV (Google Ventures) with participation from Coatue, CIV, and MCJ Collective, will support Verse as it scales commercial operations and develops new product capabilities to help organizations reduce emissions and lower electricity costs.

“Commercial and industrial electricity use is a significant contributor to global emissions. We need to make clean energy the most economical option for large electricity consumers, but existing solutions don’t scale,” said Seyed Madaeni, CEO of Verse Inc. “Our Series A round, backed by an impressive roster of investors, will fuel Verse’s growth and enhance our software product suite, enabling more businesses to reduce both the cost and emissions of their electricity.”

Verse’s oversubscribed round coincides with several trends that are increasing pressure on organizations to purchase clean energy.

• AI and EVs: These power-hungry technologies are driving load growth and concerns over associated emissions.
• High and volatile corporate electricity costs: Geopolitical and weather events have increased electricity prices and volatility over the past several years.
• Escalating regulatory demands in the U.S. and EU: New rules mandating carbon disclosure are forcing organizations toward more robust carbon accounting, which is expected to drive more granular (e.g., time- and location-matched) clean energy purchases.
• Legacy approaches to procuring clean energy are expensive: Organizations often incur millions in transaction and overhead costs when shifting to clean power.

Rising prices, more rigorous standards, and expensive processes create both urgency and new levels of complexity that legacy solutions and corporate clean energy buyers are ill-equipped to handle. Verse’s AI-enabled software platform, Aria™, enables buyers to determine goals and create roadmaps for optimal, least-cost clean energy portfolios in minutes – and at a fraction of the cost of existing solutions.

“Emerging regulations and technologies are challenging companies to manage complex clean energy portfolios and become experts quickly,” said Andy Wheeler, General Partner at GV. “The Verse team has combined industry expertise with advanced software to build a powerful, cost-effective solution with instant benefits, and we’re happy to back their efforts to accelerate the clean energy transition.”

Founded in 2022 by Seyed Madaeni and Matt Penfold, Verse Inc offers customers a software platform that supports companies at any stage of their clean energy journey – from setting net zero goals or procuring renewable energy credits (RECs) to managing portfolios of assets for hourly matched carbon-free energy (CFE). By managing risk and optimizing for least cost, Aria enables organizations to manage electricity costs and reduce carbon emissions, making clean energy the smart option.

About Verse Inc

Verse provides software that helps companies reduce their electricity costs and scope 2 emissions at the same time. Its SaaS platform, Aria™, leverages generative AI to help companies define clean energy goals and plan, procure, and manage optimal portfolios of clean energy assets at least cost. Customers can set parameters that target specific goals (e.g., cost, emissions, or hourly matching) and optimize for annual matching, emissions matching, or hourly matched carbon-free energy (CFE). By reducing transaction costs by up to 70% and providing real-time analysis within minutes, Aria helps scale and accelerate the clean energy transition.

Anthesis Group is using Verse to help clients accurately plan their decarbonization and clean energy investment strategies.

“Projected grid emissions” are the anticipated levels of emissions from electricity generation based on factors such as planned changes in the energy resource mix and policy initiatives.

These grid emissions factors vary widely across the U.S. because not all electric grids are “greening” at the same rate. For instance, California’s grid, which benefits from ambitious decarbonization policies as well as significant existing and planned deployments of clean energy resources, is projected to reduce its emissions much faster than the grids in Pennsylvania, New Jersey, and Maryland.

Accurate emissions forecasting and analysis should account for these local variations. Forecasting isn’t a one-size-fits-all activity, so why would organizations use one-size-fits-all data? Grid emissions factor data helps companies understand how the emissions from their facilities will evolve based on their decisions but also on the local grid’s development, and where to invest for the greatest emissions-reduction impact.

Your Clean Energy Investment Decisions Are Only as Good as Your Data

U.S. Environmental Protection Agency-designated eGrid regions account for unique emissions factors applicable to regional grid electricity consumption. They are more granular than U.S. wholesale power markets, allowing for higher-fidelity data. And because they are used as the basis for reporting requirements from standard-setting organizations such as the Greenhouse Gas Protocol and Carbon Disclosure Project, eGrid regions help organizations align their emissions projections with regulatory and voluntary frameworks.

Verse’s data scientists and clean energy experts have compiled a unique set of data sources in a single platform, synchronized the disparate datasets, and made them easy to use.

Anthesis Group uses the advanced modeling and datasets in Verse’s Data Hub to capture critical grid emissions factors so its clients can develop accurate regional emissions forecasts that drive informed decarbonization planning and investment decisions.

Click the image below to access the Anthesis Group/Verse one-pager.

In March 2024, Verse CEO Seyed Madaeni participated in CERAWeek’s Innovation Agora, delivering an Agora Pod talk.

Click the image below to watch the video, which provides an overview of Verse’s platform and how it’s accelerating corporate clean energy adoption by helping companies reduce electricity costs and carbon emissions at the same time.

In 2023, Heirloom Carbon Technologies (Heirloom) teamed up with Verse to plan its clean energy portfolio.

Recent and pending regulatory and voluntary framework changes are driving companies to procure clean power in more granular ways (e.g., with time- and location-based matching requirements). And the increasing complexity of electricity markets and technologies like energy storage surpass the analytical capabilities of legacy tools (humans and spreadsheets). Clean energy buyers will require the power of artificial intelligence (AI) to analyze potential scenarios and future-proof their clean power procurement.

The following case study illustrates how Verse’s Aria software platform helped Heirloom identify the right clean energy goal for its business and, based on this goal, design its optimal clean power portfolio.

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The U.S. Treasury Department has issued its long-anticipated guidanceon IRA 45V – the section of the Inflation Reduction act that deals with the green hydrogen tax credit. 

In the quest for a cleaner and sustainable energy future, green hydrogen has emerged as a promising solution. Hydrogen, when produced using emissions-free energy, becomes “green hydrogen” — a versatile, carbon-neutral source of energy. Governments worldwide are establishing regulations to promote the production of green hydrogen. But to qualify as green hydrogen, the production process must meet specific requirements.

Here’s what U.S. green hydrogen companies need to know about how the proposed rules will impact companies’ clean energy procurement strategies and monetization of the tax credit. 

What Qualifies for a 45V Green Hydrogen Tax Credit in the U.S.?

For hydrogen to be considered “green” (and qualify for the up to $3 per kilogram of tax credits under the IRA), it must be produced using emissions-free energy sources such as wind or solar. Companies are allowed to use on-site renewable generation (e.g., they could install solar panels at their hydrogen production facility) AND/OR use virtual power purchase agreements (vPPA) to purchase emissions-free electricity from renewable generation in a different location (e.g., from a solar farm that is not adjacent to their facility). 

According to the Treasury, the 45V tax credit will be available for “10 years starting on the date that a hydrogen production facility is placed into service for projects that begin construction before 2033.” If you are a green hydrogen producer using on-site or vPPAs to source renewable energy to power your production and you want to monetize the tax credit, your clean energy needs to meet several critical parameters (what climate advocates are referring to as the “three pillars” of clean electricity supply).

1. Green Hydrogen Production Requires Hourly Time Matching

The Treasury’s proposed 45V rules require hourly time matching, or temporal correlation, of renewable energy to green hydrogen production. That means green hydrogen companies will have to match their energy consumption every hour (their hourly load) with clean power supply (e.g., if they use 1MWh from 10-11am on October 1, 2028, they will procure 1MWh of clean power in that same hour).

This requirement will not be immediate. Until the end of 2027, hydrogen companies can match their energy consumption on an annual basis (e.g., if they use 100,000 MWh of energy between January 1, 2027 and December 31, 2027, they match that by procuring 100,000 MWh of emissions-free energy in that same time frame.) Hourly time matching will begin in 2028 and will be required for everyone (e.g., no grandfathered annual matching allowed).

KEY TAKEAWAY: PLAN AHEAD! Although the time-matching condition will be phased in over several years, companies procuring clean power today must plan NOW for hourly time-matching or risk being ineligible in the future (vPPA contract terms are typically 10-20 years) and the lead time from contract execution to delivery is typically 2-3 years. 

2. Green Hydrogen Production Requires “Additionality,” or “Incrementality”

The new proposed production tax credit rules require renewable energy used in green hydrogen production to be “additional,” or “incremental.” That means the energy must come from new renewable projects, not existing ones, explicitly built to serve hydrogen production facilities. The Treasury defines new projects as those that began commercial operation no earlier than 3 years prior to the commercial operation date of the green hydrogen facility. So, if you want to purchase power from a wind farm that commenced commercial operations in 2020 for a green hydrogen facility that begins operating in 2024, that wouldn’t qualify. 

That said, the Treasury is requesting comments on alternative approaches that would allow energy from existing clean power generators to meet the requirements for new clean power under certain circumstances.

KEY TAKEAWAY: START NOW on your clean power procurement. There is a large backlog of renewable energy projects in the U.S. waiting for permits or interconnection. If you want to begin operations in 2025, you need to contract for clean power as soon as possible. 

3. Green Hydrogen Production Requires Geographic Correlation (“Deliverability”)

45V requires that green hydrogen producers’ clean energy be generated and consumed in the same region as the production. If you are producing hydrogen in Louisiana, for instance, you will need to procure your clean energy in the MISO (Midcontinent Independent System Operator) power grid. If you are producing in Texas, you’ll need to procure your energy in the ERCOT grid (Electric Reliability Council of Texas). The Treasury is also requesting comments on possible options for transmission of clean power between regions, which might alter this requirement. 

KEY TAKEAWAY: The regionality principle of the proposed rules will almost certainly affect your clean energy supply options. If you’ve already sited your production facility, you will need to procure clean power from plants located in the same electric grid, which narrows your options. If you haven’t sited your production facility, THINK CAREFULLY about where you could site it to take maximum advantage of the production tax credit.

How to Maximize the 45V Green Hydrogen Tax Credit

With the EU and the US providing clear regulations and financial incentives, green hydrogen companies are poised for both growth and positive environmental impact. The new U.S. rule will help deliver on the promise of green hydrogen – that it can replace polluting fossil fuels without significant additional production-related carbon emissions. But it adds complexity for hydrogen producers, particularly those unfamiliar with clean power procurement. It will be crucial to work with experts and tools that can provide a holistic, data-driven assessment of possible scenarios to deliver the optimal, future-proofed clean power strategy.

By planning ahead, acting now, and thinking carefully about their clean energy procurement strategies, green hydrogen producers can maximize the 45V production tax credit, secure a reliable supply of renewable energy, and manage long-term costs and risk. 

In November 2023, Verse CEO Seyed Madaeni joined Gabriella Gillet-Perez at DatacenterDynamics’ DCD Connect Virginia conference. They discussed data centers’ use of clean power, why clean energy is a smart financial decision (not just a sustainability decision), and some of the challenges data center leaders face when trying to procure it.

You can view the video on DatacenterDynamics’ website.

If you’re unfamiliar with scope 2 decarbonization strategies or need a quick refresher, check out this explainer video! It provides an overview (with examples) of three common strategies — 100% Renewable Energy (RE), Carbon-Matching (aka Emissionality), and 24/7 Carbon Free Energy (CFE).

Decarbonization Strategy #1: 100% RE

In this scenario, a company aims to match its annual power consumption with clean energy. 

For instance, if company A uses 100,000 MWh of electricity between January 1 and December 31, it will purchase 100,000 MWh of clean energy in that same period. 

100% RE involves matching annual energy consumption with an equal amount of renewable energy. Clean energy purchases are not restricted to the grid in which the consumption occurs.

That means a company can purchase renewable energy wherever it’s least-cost, without considering where it operates. For example, Company A, whose operations are in Louisiana, could buy renewable energy from projects in any grid.

Decarbonization Strategy #2: Carbon-Matching

The goal is to match a company’s annual emissions associated with its energy consumption with an equal amount of avoided emissions from its purchases of clean energy.

So, if Company A emits 40,000 tons of carbon in a year, it will procure clean energy that avoids 40,000 tons of carbon emissions over the same period.

Like 100% RE, carbon matching involves annual matching but focuses on carbon emissions rather than megawatt hours of energy. There is no location requirement, BUT location matters as each grid has a different carbon intensity. This approach prioritizes clean energy purchases that are least-cost from an emissions impact perspective. 

For instance, a company pursuing carbon-matching would rather buy solar power in Kentucky than in California because Kentucky’s mostly fossil-fuel grid has a higher carbon emissions intensity than California’s, which has lots of clean energy and thus relatively lower emissions intensity levels. 

Decarbonization Strategy #3: 24/7 CFE

The third goal is 24/7 carbon-free energy (CFE). Unlike the two previous goals, this one involves hourly matching and includes a location requirement. 24/7 CFE aims to match every MWh of a company’s electricity consumption, every hour of every day, with carbon-free electricity sources in the same grid. It is the end state of a fully decarbonized electricity system.

If a company matches 100% of its hourly consumption with CFE, the company would have a CFE score of 100%. 

Which Strategy Is Right for Me?

It can be very difficult to choose from among the various scope 2 decarbonization strategies if you don’t understand the tradeoffs. 

Verse uses software and services to help companies understand the benefits and drawbacks of different goals and determine which the optimal, least-cost strategy based on specific company parameters. Our Aria platform analyzes and illustrates the cost, risk, emissions, and carbon-free energy profile of the various options, and provides precise procurement roadmaps to achieve them. 

2023 witnessed significant strides in the clean energy and climate space. Corporates and institutions continue to drive clean energy adoption. First-of-a-kind deployments came online. And governments took meaningful steps to codify and encourage carbon disclosure and reduction efforts.^[1]

Given Verse’s current focus on the U.S. and EU, we’re restricting this blog to a handful of achievements. Those include legislative developments in California, the Carbon Border Adjustment Mechanism (CBAM) in the EU, and the first round of funding for carbon capture demo projects and clean hydrogen hubs in the U.S. We’ll also explore a few anticipated events, including SEC rule changes for climate disclosures, U.S. Treasury Department rules about green hydrogen, and revisions to the Science-Based Targets initiative (SBTi) and Greenhouse Gas Protocol (GHGP) standards for Scope 1, 2, and 3 reporting.

^[1] The public can access a version of CEBA’s clean energy deal tracker, which “identifies the total annual volume of clean energy procured by energy customers, as well as companies that have led clean energy procurement announcements” here: https://cebuyers.org/deal-tracker/

2023 Clean Energy & Climate Milestones

1. California SB 253 & SB 261

California continued its climate leadership with Senate Bills 253 (the Climate Corporate Data Accountability Act) and 261 (the Climate-Related Financial Risk Act). 

Beginning in 2026, SB 253 requires businesses with more than $1B in revenue operating in California to provide annual Scope 1, 2, and 3 emissions reports. Notably, the law includes an accountability mechanism by requiring companies to provide third-party confirmation of their reports. 

SB 261 requires companies with more than $500M in revenue operating in California to provide public annual climate-related financial risk disclosures (and how they plan to address those risks). 

These laws are important because of their trans-border impact. Companies that meet the legal parameters and wish to do business in California (one of the world’s biggest economies) must comply, regardless of where they are based. The rules also serve as a model for other jurisdictions seeking robust policy frameworks.

2. EU Carbon Border Adjustment Mechanism

The European Union’s implementation of the Carbon Border Adjustment Mechanism (CBAM) in 2023 marked a paradigm shift in global trade dynamics. 

CBAM is the EU’s effort to “put a fair price on the carbon emitted during the production of carbon intensive goods.” The rule imposes carbon costs on certain imports — cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen — to incentivize cleaner production methods and prevent carbon leakage (the transfer of carbon emissions from EU-based facilities to other locations around the world). 

As with the California legislation, CBAM has implications for businesses far beyond the EU’s borders. By internalizing the external cost of carbon, the EU is encouraging businesses worldwide to adopt more sustainable practices, helping foster a race to the top in environmental standards.

3. U.S. Funding for Carbon Capture Demonstrations & Clean Hydrogen Hubs

In 2023, the Biden Administration began awarding $2.5B in funding through the Bipartisan Infrastructure Law for carbon capture demonstration projects. Verse customers Climeworks  and Heirloom were among the 2023 awardees. The Biden Administration also announced a whopping $7B for regional clean hydrogen hubs (H2Hubs) around the country. And it’s not just funding: we’re also seeing deployments. Heirloom announced the first commercial plant in the U.S. to use direct air capture (Climeworks’ project in Iceland began operations in 2021).

Both technologies are still pre-widespread commercial scale, so the government’s financial support will help establish track records, lower costs, and support a cleaner and more resilient energy infrastructure. The International Energy Agency (IEA)’s 2023 Net Zero Roadmap update suggests we can still avoid the worst effects of climate change, in large part due to record growth of clean energy technologies. We should use all tools available, from reducing emissions through clean power procurement to removing carbon dioxide already present in the atmosphere with direct air capture. 

2024 Clean Energy and Climate Predictions

1. SEC Rules on Climate Disclosure

The Securities and Exchange Commission (SEC) is expected to change its rules regarding climate disclosure, which will help reshape corporate reporting. The move towards more standardized and comprehensive climate-related disclosures will empower investors to make informed decisions based on companies’ environmental performance. This shift aligns financial markets with the imperative of addressing climate risks and opportunities — a key catalyst for continued clean energy & climate investments.

2. Treasury Ruling on 45V for Green Hydrogen

The U.S. Treasury was expected this past fall to issue a ruling on Section 45V of the Inflation Reduction Act that addresses financial support for the green hydrogen sector. A large portion of the energy sector is waiting with bated breath for the Treasury to provide guidance on key issues related to tax credits for green hydrogen production.

One of these issues is the concept of additionality, and whether the Treasury will require “green” hydrogen to be produced with clean power that would not otherwise have been built. If the recent leak about the rules is accurate, green hydrogen producers will have to be smart about how they configure their plants to meet clean power goals. That includes not only how they source clean energy, but also how they invest in flexible electrolyzers that can act as grid resources.

3. SBTi Rule Changes & GHG Protocol Guidance Updates

The Science-Based Targets initiative (SBTi) is expected to undergo rule changes in 2024, refining the criteria for setting and validating science-based emission reduction targets. Companies that have committed or are considering committing to science-based targets should keep an eye out for updated rules.

In 2023, the GHG Protocol began the process of updating its corporate standards and guidance for Scope 1, 2, and 3 emissions (direct emissions, indirect emissions from purchased energy, and indirect emissions from the value chain, respectively). So many businesses are seeking to measure, report, and reduce their carbon footprint (for voluntary reasons and to stay ahead of emerging regulations) that the secretariat decided its rules needed a refresh. These updated guidelines, drafts of which are expected in 2024 (with final standards/guidance in 2025), will help foster a more transparent and accountable approach to sustainability.

Clean Energy and Climate Collaboration

As we reflect on the achievements of 2023 and peer into 2024, it is evident that the global community – including corporates and policymakers — is making strides toward a more sustainable and resilient future. The convergence of legislative actions, international collaborations, and financial incentives is paving the way for clean energy & climate progress. Onward and upward as we move into the new year!

Local Carbon Emission Regulations & Policies Have Global Impacts

Remember the saying “Think global, act local?” Syntax errors aside, this mantra appears to be influencing policymakers around the world who are implementing carbon emission regulations to encourage companies to reduce their carbon footprints.

Although these new decarbonization and disclosure policies are local, they have global impacts. The EU’s Carbon Border Adjustment Mechanism (CBAM) and California’s recent Climate Corporate Data Accountability Act are just two recent examples of localized policies that will affect companies far beyond their respective legislative jurisdictions.

The EU’s Carbon Border Adjustment Mechanism

The European Commission is working on reducing the carbon footprint of industrial materials such as cement, aluminum, and steel.  But regulating the carbon footprint of materials manufactured in the EU runs the risk that manufacturers will move production outside the EU, geographically relocating the carbon emissions but not reducing them (what is known as “carbon leakage”).

So, the European Commission created the Carbon Border Adjustment Mechanism (CBAM), a carbon emission regulation that pressures companies at a global level to shift to more sustainable production. 

CBAM Doesn’t Just Affect EU Companies

CBAM’s goal is to “put a fair price on the carbon emitted during the production of carbon-intensive goods that are entering the EU, and to encourage cleaner industrial production in non-EU countries.” CBAM will initially focus on carbon-intensive goods such as cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen. The regulation will require both EU-based companies as well as any company importing these goods into the EU to report the GHG emissions (direct and indirect) embedded in the products. EU importers of relevant goods must register with national authorities where they can buy CBAM certificates (priced based on weekly ETS allowances^[1]). The importer then reports the emissions embedded in its imported goods and submits a corresponding amount of CBAM certificates annually. The image below from the European Commission provides a succinct explanation of the program.

ETS allowances tend to be pricey, so if you can mitigate your emissions for less than 80 euros/t (see this site for recent auction prices), it’s economical to do so. Spoiler – most PPAs have an implied carbon reduction cost less than 80 euros/t!

The key point here is that CBAM will affect any manufacturer of these products currently selling or hoping to sell to European markets – regardless of where the manufacturer is located. CBAM becomes fully enforceable on January 1, 2026, which gives manufacturers a relatively short runway to mitigate their carbon intensity or face financial penalties for noncompliance. For companies wishing to do business in the EU, evaluating clean power options for their energy-intensive operations will become a necessity.

California’s Climate Corporate Data Accountability Act

California’s landmark SB253 (the Climate Corporate Data Accountability Act, or CCDAA) is another example of a local regulation that will affect companies globally. The state law requires public and private companies with over $1B in revenue doing business in California to disclose their scope 1, 2, and 3 emissions (starting in 2026). 

As with CBAM, the key point here is that any company with more than $1B in annual revenue that operates in California (even if headquartered elsewhere) will have to report both direct and indirect emissions. (Estimates project that the new law will impact approximately 5,300 companies.) If you are a large company doing business in California, you need to get smart about reporting mechanisms – and you probably also want to evaluate ways to reduce your emissions. 

Plan Ahead for More Carbon Emission Regulations 

Although local carbon emission regulations may use different enforcement mechanisms – such as financial penalties or disclosure requirements – the broad goal is the same: to require companies to track their GHG emissions (Scope 1, 2, and 3) and evaluate ways to reduce them. Both CBAM and the CCDAA demonstrate the far-reaching impact locally enacted policies will have on companies with global operations.

Organizations that want to continue to do business globally need to plan for increasing carbon disclosure and tariff policies by acting now to reduce their emissions. Clean power procurement will play a big role in decarbonization, particularly for electricity-intensive industries like aluminum and cement production. Contact us at hello@verse.inc to learn more about how to build the optimal future-proofed clean power portfolio for your business.

^[1] From Eurostat: “An emissions trading system, also known as emissions trading scheme and abbreviated as ETS, is a market mechanism that allows those bodies (such as countries, companies or manufacturing plants) which emit (release) greenhouse gases into the atmosphere, to buy and sell these emissions (as permits or allowances) amongst themselves.”