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Cost-troubled offset buyer finds solution through AEGIS
MARKETS: ENVIRONMENTAL | COMMODITY: CARBON OFFSETS | CLIENT: OIL & GAS PRODUCER

Situation

Before 2021, a carbon offsets purchaser could find offers at
a relatively low cost. However, in 2021, prices increased
dramatically. Another industry provider presented a
$7.00/ton offer in 1st QTR 2022 to offset 2021 emissions.
Alarmed by the high cost, the client sought assistance from
AEGIS. Frequently, buyers find that the voluntary carbon
offset market lacks transparency, often leaving buyers
unclear about fair pricing. In addition, many offset
providers make it difficult to understand the cost
breakdown: wholesale price, markup, other fees, etc.

As a result, buyers often believe they are working with a
consultant motivated to find the best value when, in reality,
the consultant is a wholesaler looking to maximize return at
the company's expense.

Outcome

AEGIS searched for the best available offset pricing and showed the buyer several offers that would enable the company to meet their ESG goals. By understanding the additional cost for domestic offsets, the company now had a full understanding of the offset markets and several alternatives to accomplish their ESG objectives. As a result, the company sourced US-based offsets for $4.25/ton (rather than $7.00+/ton), and AEGIS matched them directly with a seller.

Not only allowing them to eliminate a significant markup but also giving the company greater confidence in their operations in the market.

 

The company sourced US-based offsets for $4.25/ton (rather than $7.00+/ton), and AEGIS matched them directly with a seller.

 

No representation is being made that any client will or is likely to achieve hedge profits similar to those discussed in this case study. This testimonial is not indicative of future performance or success. Commodity interest trading involves risk and, therefore, is not appropriate for all persons; failure to manage commercial risk by engaging in some form of hedging also involves risk. Past performance is not necessarily indicative of future results. There is no guarantee that hedge program objectives will be achieved. Neither this trading advisor nor any of its trading principals offer a trading program to clients, nor do they propose guiding or directing a commodity interest account for any client based on any such trading program. Hedge advisory services are performed by the registered commodity trading advisor AEGIS-CTA, LLC, a wholly-owned subsidiary of AEGIS Hedging Solutions, LLC. This case study is not required to be and has not been, filed with the Commodity Futures Trading Commission ("CFTC"). The CFTC does not pass upon the adequacy or accuracy of this commodity trading advisor disclosure. Consequently, the CFTC has not reviewed or approved this case study.

 

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