Tag: CEBI

Part 4 of the Energy Customer Investment-Grade Credit Support Blog Series

Credit insurance is a financial product purchased by a clean energy developer to offset the risk of offtaker default in a virtual power purchase agreement (VPPA) with a non-investment grade offtaker. CEBI spoke with credit insurance providers to compile some best practices for offtakers and developers interested in leveraging it for their deals:

1. Find an insurance provider with clean energy transaction experience: While credit insurance has been around since the 1800s to indemnify sellers against a client’s default and is particularly common in international trade, its use in clean energy transactions is somewhat new, especially in North America. To date, there are only about 15-20 North American companies who offer VPPA credit insurance, and most of these have European foundations. Therefore, make sure to confirm that your provider understands how clean energy deals work. It may be helpful to seek out a broker or consultant, who can connect you to experienced providers.
2. Help connect developers to insurance providers: Since credit insurance in clean energy transactions is not common practice yet and it is something developers have to purchase, offtakers may have to take a more active role in convincing developers to use it. Experts note that offtakers should not be involved in negotiations between a developer and insurance company. However, they instead recommend that offtakers make introductions between both parties in order to jumpstart negotiations.
3. Rely on your treasury teams: PPA negotiations are difficult, especially when newer enhancement mechanisms are part of the discussion. Engaging the treasury teams on both the offtaker and seller sides may be key in achieving the best deal. Experts highlight that allowing the treasury representatives on both ends to negotiate directly with each other has often had a pronounced effect on reducing the perceived risk and therefore the costs borne by the offtaker.
4. Think about packaging different enhancement mechanisms: Credit insurance is just one credit support mechanism. Others, including Letters of Credit (LCs) and surety bonds, are available and experts have often recommended looking at them as a package. Many sub-investment grade offtakers may still be asked to post an LC and/or surety bond even if their developer secures credit insurance. However, credit insurance can help make LCs and surety bonds cheaper. In fact, experts indicate that LCs and surety bonds alone are most affordable for mid-grade offtakers, and credit insurance may be particularly helpful for those whose credit is lower.

If you are interested in leveraging credit insurance or have done so and would like to share insight, please reach out to disc-e@cebi.org.

This is Part 4 of CEBI’s Credit Support Blog Series. Stay tuned for further installments and for our forthcoming Credit Support Primer.

Part 3 of the Energy Customer Investment-Grade Credit Support Blog Series

Surety bonds are an increasingly popular method of credit enhancement for non-investment grade offtakers looking to do clean energy deals. CEBI spoke to two long-standing CEBA members who have successfully leveraged them. Equinix and Iron Mountain Data Centers used surety bonds to negotiate power purchase agreements (PPAs) in 2015 and 2017, respectively. At the time they did these deals, both companies were sub-investment grade, though Equinix has since become investment grade. In a recent interview, Bruce Frandsen, Director of Global Renewable Energy and Cleantech at Equinix, and Chris Pennington, Director of Energy and Sustainability at Iron Mountain, shared advice on using surety bonds as a credit support mechanism for clean energy procurement:  

Leverage consultants and advisors: Both Pennington and Frandsen highlighted their reliance on consultants from the very beginning of their PPA process. A good consultant ensures that credit status and possible mitigation strategies are raised early. Consultants also help place offtakers in conversations with developers who are willing to consider surety bonds.  

Include your Treasury and Risk departments in strategic discussions from the very beginning: While setting sustainability goals can seem like a process that does not require heavy input from Treasury or Risk, both Frandsen and Pennington wish they had involved these teams earlier. Both companies used letters of credit (LCs) for their first PPA deals, but their Treasury departments immediately suggested surety bonds once they realized how many deals both companies aimed to pursue. LCs pull on a company’s line of credit, which may be fine on occasion but is not ideal for multiple deals. Had Treasury been involved in strategic planning, they may have aimed to avoid LCs altogether. In addition, since the Risk team is likely to be the team actually working with banks and insurers to underwrite agreements, it is helpful to also loop them in. 

Address your credit status and willingness to do surety bonds up front: Pennington noted “It’s super easy to… not have [the discussion about credit support and surety bonds] up front because you get so excited about talking about this solar project or wind project… But when the time comes, it’s like, oh, that’s a really hard barrier that can completely stop progress.” Frandsen agreed, suggesting that companies include this information in their requests for proposals (RFPs) or solicitation requests. In fact, Equinix still references surety bonds as a credit support mechanism in their RFPs, even though they are now investment grade, as a proactive measure to address the risk that their status may drop. 

Provide a surety bond that mirrors an LC’s callability and provide it up front: Offtakers might prefer surety bonds because they don’t impact their lines of credit. However, other deal chain stakeholders often prefer LCs because they are “immediately callable,” meaning that developers can more easily demand payment and when they do, the offtaker’s lender typically has only about 48 hours to pay. While surety bonds traditionally are not written that way, both Frandsen and Pennington recommend writing your agreement to mirror this functionality, with Frandsen stating, “that [lack of immediate draw capability] seems to be the main component that scares the financial institutions away from looking at this as a viable option.” Pennington recommends having the actual bond form ready during the terms sheet phase of PPA negotiation. Negotiating the bond form can take anywhere between a few weeks to a few months, so it is critical to ensure that all parties — financiers, developers, and offtakers — are comfortable with this as soon as possible.

Be willing to accept surety bonds in return: Developers have stated that a barrier for their acceptance of surety bonds is that while offtakers ask to use it for themselves, they are not often willing to accept them from developers in return. Especially in a more constrained buyers’ market, being willing to accept similar terms from a developer may be key. 

Be willing to accept an LC as a Plan B: While both companies were able to use surety bonds successfully, Frandsen and Pennington agree that the first attempts can involve trial and error. Be committed enough to the PPA negotiation that you are willing to consider other options if conditions change. In fact, Pennington mentioned that Iron Mountain recently had to switch from a surety bond to an LC at the last minute because while they had informally agreed on a surety bond, the project’s financier was unable to get comfortable with it after seeing the bond form. Pennington noted “…there has to be a strong enough commitment to what this contract achieves in the first place… it can’t entirely hinge on whether or not you have a surety bond in place.” 

If you are interested in leveraging surety bonds or have done so and would like to share insight, please reach out to disc-e@cebi.org.

This is Part 3 of CEBI’s Credit Support Blog Series. Read Part 1 and Part 2.

Part 2 of the Energy Customer Investment-Grade Credit Support Blog Series

Ask around about the process of doing a virtual power purchase agreement (VPPA) in the U.S. right now and you are likely to hear the phrase “seller’s market.” Simply put, this means that the number of top-rated potential energy customers more than meets the number of available clean energy projects. Developers have their pick of offtakers and therefore tend to go with the gold standard: investment-grade offtakers. But what happens when the market shifts and developers run out of investment-grade options? 

Enter credit support: the key to engaging non-investment grade offtakers in the present and future-proofing the VPPA market. Credit support helps protect project financiers and developers against offtaker default risk. Non-investment grade offtakers looking to transact today are almost always asked to provide some form of credit support. Available enhancement mechanisms differ in how they address offtaker default risk, which can influence costs to the offtaker. 

Understanding the key credit enhancement mechanisms — Letters of Credit (LCs), surety bonds, credit insurance, and shadow ratings — can help you transact now and prepare you for future market shifts. 

• LCs: LCs are written agreements between a bank and a developer ensuring offtaker payment. While this is a common option in PPA negotiations for non-investment grade offtakers, they come with some drawbacks for offtakers. LCs typically require a hefty cash collateral and draw on a company’s line of credit, which needs to be preserved for core business functions. In addition, LCs are written to be immediately callable, meaning that issuing banks usually only have about 48 hours to pay a developer in the case of offtaker default. Considering these drawbacks, stakeholders are increasingly searching for alternatives. 

• Surety Bonds: Unlike LCs, PPA surety bonds are third-party agreements that pass the risk of offtaker default onto a new party: an investment-grade surety company. In this scenario, the offtaker pays a premium to the surety company who, in turn, is responsible for paying the developer in case of default. In case of default, the surety pays the developer the agreed-upon sum and then either looks to the offtaker for reimbursement or attempts to find a replacement offtaker. This allows the offtaker to secure credit support without drawing on its line of credit. While commercial project lenders have been hesitant to accept traditional surety bonds because they are not immediately callable, recent offtakers have found success by offering “on-demand surety bonds,” which are modified to closely mirror the callability of an LC.
• Credit Insurance: Credit insurance is a form of nonpayment insurance taken out by a developer against the risk of offtaker default. Here, the risk of default gets passed to an A-rated insurance company, instead of resting with the non-investment grade offtaker or developer. While the developer does pay a premium for the insurance, it can recuperate this expense through PPA pricing or even seek out more favorable terms from the project lender. This may end up being of no cost to the offtaker. And lastly, credit insurance lacks the “payment on demand” quality that is commonly seen in both LCs and modified surety bonds. All these qualities mean that credit insurance is often more affordable than other enhancement mechanisms and has the benefit of being an off-balance sheet solution. While the offtaker ideally should not be directly involved in the negotiation process between the developer and insurer, it can introduce credit insurance as an option. Those who have successfully used credit insurance in PPA negotiations have even gone as far as to seek out a preliminary quote from insurance agencies to include in their requests for proposals (RFPs). 
• Shadow Ratings: Finally, for companies that lack a public investment-grade rating simply because of the often-prohibitive cost of the public ratings process, there is the option to leverage shadow ratings. Receiving a public rating is a complex process requiring multiple years of audited financial statements along with a detailed review of company management and industry health. The cost of being publicly rated ranges from the hundreds of thousands to millions of dollars. This usually is not financially pragmatic for companies that are not using the rating for its primary purpose — to issue bonds. Luckily, the shadow ratings process is a more flexible one that is often significantly more affordable. Shadow ratings review similar information but are less comprehensive and lack many of the hefty fees of a public rating. Therefore, shadow ratings typically only cost in the tens of thousands of dollars if done by a credit-rating agency and can even be done at no cost to the offtaker if it is done in-house by a deal chain stakeholder.

LCs, surety bonds, and credit insurance are all financial products that place the burden of default risk onto a different investment-grade entity. Meanwhile, shadow ratings can reduce perceived risk overall. These solutions can be used individually, but experts have noted that packaging them together can yield maximum benefit. If your company is struggling with credit access and/or is interested in exploring any of these options, please reach out to disc-e@cebi.org.

This is Part 2 of CEBI’s Credit Support Blog Series. Stay tuned for an educational primer on this topic.

Part 1 of the Energy Customer Investment-Grade Credit Support Blog Series

Clean energy projects are one of the most impactful tools that corporate energy customers have to meet their sustainability goals and the Power Purchase Agreement (PPA) remains the most popular offsite deal structure. Energy customer creditworthiness plays a critical role in enabling these deals, but the market’s high credit requirements are shutting out most U.S. companies and stalling decarbonization.

Why is sufficient credit so out of reach, and how do we fix that?
By signing a PPA, large energy customers, or offtakers, provide guaranteed revenues to an energy project, which enables developers to secure project financing. Project financiers need assurance that their investments will be repaid and typically require that the offtaker have investment grade credit. This serves as an indicator of the offtaker’s ability to continue paying their bills and provide project revenues.
According to CEBA’s Deal Tracker, 89% of the offtakers for PPAs in 2022 had investment-grade credit. Unfortunately, according to Energetic Capital, of the nearly 80,000 companies tracked by S&P, less than 5% are investment-grade. As more companies begin to set sustainability goals and require their supply chain partners procure clean energy, there is a growing demand for market access from non-investment grade companies.

The primary reasons that a company may lack investment-grade credit could fall into one of the following categories:

• Public Rating Requirements: Credit Ratings are primarily used to determine whether a company issuing a bond or other financial instrument is likely to meet its obligations. To demonstrate likelihood of future success, companies submit multiple years’ worth of audited financial statements to a rating agency like S&P, Moody’s, or Fitch. The cost can range from a few hundred thousand dollars to millions. Most U.S. companies do not issue bonds and do not need a public credit rating for their core business activities, so getting rated solely to transact in the clean energy space would result in a significant increase to the PPA’s per MWh price. In most cases, companies may judge that it is not a pragmatic use of resources.
• Company Relationship to Parent: Subsidiary companies may not have robust enough records of financial success to qualify for their own credit rating. In some cases, their parent company may provide a parent guarantee, but it is often the case that they do not want to be held liable for a subsidiary, especially if they are not the sole owner of the brand.
• Company sector: Credit ratings are partially determined by an analysis of sector health and industry-wide risk, meaning that companies in volatile sectors (like commodity manufacturing) may be plagued by sub-investment grade credit regardless of individual business performance.
• Demonstrated reliability: Perhaps the hardest barrier to overcome, companies that cannot speak to their reliability may not be able to secure an investment grade rating. For example, companies that have previously defaulted on loans or have otherwise shown poor business performance are likely to be viewed as unreliable and therefore unable to receive an investment grade rating. This barrier also affects small and young companies, like startups, who often simply lack the financial track record to prove their reliability.

Building solutions to address these credit challenges requires collaboration between stakeholders across the deal chain – from customers and developers to tax equity companies and financiers. At the moment, these entities are largely siloed.

The Clean Energy Buyers Institute works to bring together key stakeholders along the project chain to expand credit access by scaling existing solutions- like credit insurance and surety bonds- and exploring new deal structures and products born out of cross-functional collaboration.

Is lack of credit support an issue you face? If so, our team is always looking to engage stakeholders who have experience with credit access barriers and/or thoughts on how to bridge them. If you or anyone at your company has a perspective on this issue you would like to share, please reach out to us at disc-e@cebi.org.

This is Part 1 of the Credit Support Blog Series. Stay tuned for an educational primer on this topic

Why did your organization get involved with the Beyond the Megawatt initiative?

The Beyond the Megawatt initiative is perfectly aligned with our internal compass – we’ve been working with clients to bring sustainability writ large into their energy procurements over a decade, including our earliest work on PPAs.

3Degrees views this initiative as an opportunity to join other industry stakeholders to amplify a set of thoughtfully agreed purpose-driven procurement practices, broadening their reach and making them more commonplace. We fully embrace this work, and collaboration across the industry is essential to building its success; CEBI has done an amazing job orchestrating the collaboration and curating its final result.

What impact will the Principles for Purpose-Driven Energy Procurement have on the clean energy industry?

Some organizations, including many of our clients, are already leading the way and embracing purpose-driven energy procurement; however, many others seek guidance to understand how to incorporate such best practices into their work. These principles serve both market leaders and newer market entrants by providing a framework of aspirational considerations to help maximize clean energy procurement benefits. We hope this initiative brings these important topics to the forefront so more organizations see how resilience, sustainability, and social considerations can become essential components of a procurement process. Ultimately, we hope the principles will create a new “base case” for positive renewable energy development.

How do the principles influence the broader transition to clean energy?

Many corporations join the energy transition from the sustainability lens; they seek to create a world where their business and all its stakeholders can prosper. Clean energy development is still development, and involves land use, technology, and economic decisions by many stakeholders. We believe these principles – and the climate leadership from those who are signing on – create a compelling statement of intent, asserting that generating clean energy is simply not enough to effect a sustainable energy transition. This will provide a path for companies just entering the space, broadening the lens about buyers using their collective power to drive change. Not all corporate buyers will automatically adopt these principles overnight and it may be difficult to understand how to apply these ideas in practice. Guidance and documentation provided by respected groups like CEBA, coupled with valid case studies from respected companies, will help spur action among companies.

How will you consider the principles during your clean energy procurement process?

3Degrees supports a range of customers with their clean energy and carbon reduction strategies. The Principles for Purpose-Driven Energy Procurement and its signatories provide a hugely helpful benchmark for companies who may be hesitant to adopt “non-standard” procurement criteria; it gives us support when we recommend a broader view of these important procurement decisions.

While many elements of these principles have long had a place among the factors we consider in these engagements, we recently documented a social mission that explicitly states our goal of pursuing the principles of a just transition through our work, which goes hand in hand with our commitment to the Beyond the Megawatt initiative.

Interviewee: Erin Craig, Vice President, Customer Solutions & Innovation, 3Degrees

Pictured above are grazing sheep at Silicon Ranch’s Snipesville II Solar Farm—which serves Meta’s operations in the state of Georgia—as part of the company’s Regenerative Energy® platform. Silicon Ranch’s transformative Regenerative Energy model is a holistic approach to land management that co-locates renewable energy production with regenerative agriculture practices.

Why did your organization get involved with the Beyond the Megawatt initiative?

Silicon Ranch was founded on the understanding that when carried out responsibly, solar projects can create enduring, long-term value and deliver a meaningful legacy to the communities in which they are located. As the long-term landowner and project operator in every community we serve, we know how important it is to be good neighbors, stewards of the land, and collaborative partners.

The Beyond the Megawatt initiative directly aligns with our founding principles to raise the industry standard for the impact solar projects can have on American communities. Helping craft the Principles for Purpose-Driven Energy Procurement enabled us to offer our expertise gained over more than a decade of developing solar projects that our neighbors are proud to have in their community. We’ve done this at scale across the United States and have valuable insights to share about how the entire industry can take tangible action to improve operations, community relationships, and the overall reputation of renewable energy nationwide.

What impact will the Principles for Purpose-Driven Energy Procurement have on the clean energy industry?

Responsibly developed solar projects have the potential to not only provide cost-effective, reliable, renewable energy, but also to promote long-term positive economic, environmental, and social impacts on American communities. These guiding principles provide a roadmap for leaders across the renewable energy sector to maximize that potential impact and make a tangible difference.

How do the principles influence the broader transition to clean energy?

It matters how energy projects are developed, owned, and operated. By following these principles, key stakeholders can help raise the bar for our industry to better ensure that solar is able to exceed expectations of what an energy project can be through responsible project design, development, and management.

The Principles for Purpose-Driven Energy Procurement also empower decision-makers to collaborate with communities to define the long-term social, economic, and health benefits that matter most to citizens. The more leaders we can get to commit to these principles, the more we will build a great reputation for the renewable energy industry and earn the trust of communities that we need in order to develop projects where they live.

Ultimately it is our hope that these principles will help our industry uphold, and even exceed, its ambitious goals.

How will you consider the principles during your clean energy procurement process?

Silicon Ranch has historically followed the vast majority of these principles during our development and management processes, and we will continue to do so.

We will continue to expand our Regenerative Energy platform, which is our holistic approach to designing, building, and operating our projects in alignment with natural systems to regenerate soil health, biodiversity, water quality, and habitat.

Our company will continue developing and building partnerships with suppliers supporting domestic manufacturing such as the partnerships we have established with Nextracker, First Solar, and SOLARCYCLE which are helping us maintain our unblemished track record, and ultimately supporting energy resiliency.

We will also continue to listen and respond to, and collaborate with, the communities where we site our solar projects and locate new solar projects in American communities where the greatest economic and environmental benefits can be achieved, as we are doing with Clearloop, our subsidiary which creates carbon solutions for organizations of all sizes, from global corporations to small businesses and educational institutions. And we will share the Principles for Purpose-Driven Energy Procurement with our partners and customers to spread the word and get more industry leaders to commit to these actionable considerations that enable a better future for all of us by making solar do more.

Interviewee: Rob Hamilton, Director, Corporate Communications, Silicon Ranch

Discussions about greenhouse gas accounting all too often overlook the tremendous role of energy customers in driving grid decarbonization investments and the efforts of the people who make that clean energy procurement happen. The Clean Energy Buyers Institute has interviewed five energy professionals and asked five questions, to reveal insights and real stories about their hard work to advance the carbon-free energy transition. Customer perspectives are important for broader industry dialogues, particularly as World Resources Institute and the World Business Council for Sustainable Development update the Greenhouse Gas Protocol.

Our fifth and final interview is with Jay Creech, renewable energy manager at REI Co-op. In previous weeks, we interviewed Kelly Snyder, senior director of origination with EDP Renewables North America; John D. Powers, Schneider Electric’s vice president of global renewables and clean tech; Jeannie Renné-Malone, vice president of global sustainability with VF Corporation; and Monica Walker, General Motors’ renewables and energy strategy manager.

Jay Creech, REI Co-op
Renewable Energy Manager
REI strives to build on market-based accounting to achieve outcomes that REI believes are essential to impactful energy attribute certificates and accelerating the clean energy transition. Jay discusses how REI’s aim is to make clean energy more local and accessible. Read our interview.

Kelly Snyder, EDP Renewables North America
Senior Director of Origination
Making clean energy procurement more accessible is a part of EDP’s core mission. Kelly explains how voluntary markets allow customers to drive impact by helping bring clean energy projects onto the grid through their purchasing power. Read our interview.

John D. Powers, Schneider Electric
Vice President, Global Renewables and Clean Tech
Schneider Electric has set a RE100 goal and also advises companies in setting similar goals. John talks about why companies need credible ways to reduce emissions and receive credit for it without being accused of greenwashing. 
Read our interview.

Jeannie Renné-Malone, VF Corporation
Vice President of Global Sustainability
VF Corporation has set a goal to power its direct operations with renewable energy by FY 2026. Jeannie discusses how markets enable VF to explore a wider range of cost-effective renewable energy options and why more access to energy storage would help. 
Read our interview.

Monica Walker, General Motors
Renewables and Energy Strategy Manager
GM has committed to achieving 100% renewable energy usage in its U.S. operations by 2025. Monica explains how market-based accounting affects GM’s decision making and what’s needed to help customers further decarbonize the grid.
Read our interview.

With large amounts of carbon emissions associated with global value chains, energy customers are paying increasing attention to opportunities to reduce these emissions and verify the reductions.   Emerging regulations like the European Union’s carbon-border adjustment mechanism (CBAM) and the U.S. Securities and Exchange Commission’s forthcoming rule for climate-related disclosures for investors add greater urgency to addressing these Scope 3 emissions generated by customers’ upstream and downstream value chain partners.

Based on recent workshops, interviews, and additional research, the Clean Energy Buyers Institute (CEBI) has identified three types of current leadership programs that focus on electricity-related emissions and/or value chain decarbonization:

1. Leadership in green electricity purchases: These programs recognize voluntary procurement of carbon-free electricity (CFE) resources in a variety of formats. The recognition for CFE may sometimes be applied to value-chain partners’ energy use in specific regions, beyond a customer’s direct energy procurement. However, these partners’ CFE use is less common and hard to quantify. As a result, current programs still focus primarily on participating entities’ green-electricity procurement for direct operations.
   
2. Leadership in green products: Some programs provide recognition for products that meet a variety of environmental and social standards that can include supply chain measures. However, electricity seldom appears as a single category in these standards, because the life- cycle assessment for a product’s carbon footprint rarely generates a specific category for that product’s carbon emissions associated with electricity usage. For products that are currently certified for their use of CFE during the manufacturing phase, the emissions usually fall under the company’s Scope 2 emissions, instead of Scope 3.
   
3. Leadership in value chain-specific, issue-specific, and/or sector-specific initiatives: These programs emphasize value chain decarbonization efforts. Here again, however, difficulties arise in identifying and quantifying specific electricity usage in a value chain and its related emissions, and current programs struggle to recognize leadership in this area. Some programs also are designed to focus narrowly on only certain issues and/or sectors.

To promote nascent efforts to decarbonize value chains and increase global CFE demand (including the untapped potential of small- and medium-size enterprises, or SMEs, found across value chains), CEBI research suggests a qualitative approach can help customers better set value chain goals, join peer communities of learning and best practice, and receive recognition for demonstrated leadership. Our best practice guidance builds on 2022 U.S. Environmental Protection Agency (EPA) guidance as well as information sharing and early leadership examples. We also anticipate the eventual formation of more comprehensive and/or quantitative-oriented leadership programs. 

The formation of a new leadership program focused on supporting the adoption of CFE across global value chains should include:

• A casebook, or collection of best practices, published annually to highlight energy customers’ work to promote CFE procurement among their value chain partners. The casebook would be open for submissions from all businesses across all industries, including business groups. The customer efforts recognized in the casebook could include:
  • effective awareness- and capacity-building that contributes to a suppliers’ CFE procurement, 
  • central coordination efforts that group multiple suppliers for collective virtual power purchase agreement (vPPA) signings, 
  • innovative ways of estimating electricity-related emissions along the value chain, and
  • energy attribute certificate (EAC) procurement on behalf of upstream and downstream value chain partners to increase CFE demand and support accelerate CFE deployment.
    
• An annual industry event where customers highlighted in the casebook gather with other relevant stakeholders to discuss lessons learned. The attendees could discuss what worked and what didn’t, as well as persistent challenges for value chain CFE procurement, the regions where those challenges occurred, and types of value chain partners experiencing the challenges. The event would provide an opportunity for businesses to learn from each other and explore paths forward.
  
• Formation of working groups among value chain decarbonization leaders recognized in the casebook, to address roadblocks to reducing electricity-related emissions along global value chains. This could also include coordinating efforts to expand EAC use to cover value chain electricity consumption, evolve standards to quantify related impacts, or develop other actions the leaders might decide to pursue.

The formation of this new leadership program would also complement one of CEBI’s four main recommendations on ways to improve the Greenhouse Gas Protocol. If the Greenhouse Gas Protocol can provide clarity around how to conduct greenhouse gas accounting for CFE procurement across value chains and create a new program recognizing leadership in value chain decarbonization, organizations will have greater motivation to scale the adoption of CFE across their value chains and integrate this into their annual greenhouse gas inventories. 

CEBI is working with various industry stakeholders in 2023 to further define and explore opportunities to initiate the formation of a new customer program that recognizes leadership in value chain decarbonization.