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Junior Industrial Products Company Well-Positioned in the $135 Billion Industry No One Talks About
By: AllPennyStocks.com News
December 13, 2011
While many of our articles are focused on stocks that are moving quickly because of some solid news hitting the wire that is driving the share price upward and highlighting the potential of the respective company, we wanted to take a moment to issue a special report on a company that is truly sliding under the radar of investors, but providing a valuable service to our environment. As such, the company does hold a significant potential upside as the “green revolution” continues a salient transition towards mainstream through policies and government mandates.
Based in Vancouver, British Columbia, ERA Carbon Offsets Ltd. (TSX-Venture:ESR) is, just as its name suggests, a pioneer in forest restoration and conservation carbon offset projects. Carbon offset, as defined by the World Resources Institute, is “a unit of carbon dioxide-equivalent (CO2e) that is reduced, avoided, or sequestered to compensate for emissions occurring elsewhere.” One carbon offset equals the reduction of one metric ton of carbon dioxide or specific calculations of other greenhouse gases that equate to one metric ton of carbon dioxide.
The categories of greenhouse gases includes, carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), perfluorocarbons (PFCs), hydroflourocarbons (HFCs), and sulfur hexaflouride (SF6).
There are two primary carbon offset markets: the compliance market and the voluntary market. The compliance market is far larger as entities (companies, government agencies, etc.) must buy carbon offsets in order to comply with total maximum amounts of carbon dioxide emissions permissible. The voluntary market is much smaller; with entities purchasing carbon offsets to equipoise their greenhouse gas emissions from a variety of sources (i.e. transportation, electricity use). In 2009, 8.2 billion metric tons of carbon dioxide equivalent changed hands worldwide; an increase of 68 percent from 2008, putting a market value of the offsets around $135 billion.
As more companies strive to reduce their carbon footprint or buy offsets to at least be “carbon neutral,” ERA Carbon Offsets continues to grow as a company and build a stout portfolio of household names that come to them for carbon offsets. Just a sampling of ERA’s clients include Air Canada, Catalyst Paper, Rolling Stone Magazine, HSE - Entega, The Forest Carbon Group AG, and Shell Canada Limited.
ERA announced today that it has hit a major sales milestone as it has now sold over two million tonnes of forest-based carbon offsets to the voluntary market around the world. The company's Community Ecosystem Restoration Program ("CERP") began in 2005 in British Columbia, Canada, and its activities have grown to include forest carbon projects in Canada, Africa, New Zealand and the United States. With the burgeoning sales, ERA has become the largest Canadian developer and retailer of forest based carbon offsets by volume and sales.
It is notable that ERA has only had sales to the voluntary market. As their industry footprint continues to expand and the firm because a more recognizable name the world over, expansion into the compliance markets could send sales considerably higher given the sheer magnitude of that market as compared to the voluntary market. ERA has already grown its roots beyond North America with its internationally recognized REDD (Reduced Emissions from Deforestation and Degradation) project in the Democratic Republic of Congo, the first concession based forest conservation project to be awarded in that country. Additional markets for its carbon offsets are expected to include Australia, Korea and Japan.
As such, ERA and its paltry $2.2 million market cap and 9 cent per share price tag could be finding a bottom at these levels and worthy of a much closer look. With less than 11 million shares in the float, plays such as this can move quickly as soon as a spotlight shines upon them and more investors learn about their operations and potential. Proper due diligence is, as always, encouraged.
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