The Climate Action Reserve has approved the issuance of carbon offset credits for two greenhouse gas (GHG) destruction projects undertaken in September and November of 2015 by Minneapolis, Minnesota based ARCA Recycling, Inc.
The company, a wholly owned subsidiary of Appliance Recycling Centers of America, Inc. (NASDAQ:ARCI), explained that the carbon offset credits will be issued into the California cap-and-trade compliance program, resulting in approximately $1 million in revenue for ARCA and approximately $700,000 in revenue for ARCA’s joint venture, ARCA Advanced Processing, LLC (AAP).
The two destruction projects were said to be the result of the collection of GHGs, specifically chlorofluorocarbons (CFCs), from appliance recycling contracts throughout the U.S.
The California cap-and-trade program encourages the destruction of GHGs in exchange for carbon offsets that can be used by regulated emitters in California to satisfy a portion of their compliance regulations.
By destroying the GHGs, ARCA said that it ensures they are never released into the atmosphere and do not contribute to global warming or ozone depletion.
Working with its project partner, ClimeCo Corporation, ARCA and AAP contract for GHG destruction at a certified third-party facility.
The company said that this time-consuming, highly regulated process includes rigorous monitoring, verification and review to ensure the integrity of the destruction activities.
According to ARCA, due to this complex process, there is often a substantial lag time in recognising revenue from such activities. These credits resulted from refrigerants collected in early and mid-2015. ARCA and AAP have since accumulated additional GHGs and anticipate further destruction projects soon.
“These efforts complement our commitment to responsibly collect the refrigerant gases in the appliances we process and also provide an important source of our on-going byproduct revenue stream,” commented Edward R. Cameron, ARCA Recycling’s President.
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