Rubicon

Nov 29, 2022

11/29/2022 | 08:27am EST Message : * * To help source carbon credits, fund projects LONDON, Nov 29 (Reuters) - Rubicon Carbon, a carboncredit firm created by U.S. alternative asset manager TPGto help companies offset their emissions, launched as aseparate company on Tuesday and said it expected to raise $1billion in capital by the end of the year. Backed by an initial $300 million from TPG, Rubicon aims tosource and fund projects that lock away climate-damaging carbonemissions and then sell the credits gained to companies. Bank of America, JetBlue Ventures, the venture arm ofJetBlue Airways Corp, and NGP Energy Capital Management are alsoexpected to contribute to the fundraising by year-end, Rubiconsaid in a statement. TPG will remain the majority owner of Rubicon after thefunding, a spokesperson said. He declined to specify the size ofTPG's stake or the valuation of Rubicon. Rubicon will be led by Chief Executive Tom Montag, theformer chief operating officer of Bank of America, and chairedby Anne Finucane, the former Bank of America vice chair, itsaid. "Rubicon is designed to be the market-based solution thatallows both the supply and demand side of the global carbonmarket to scale responsibly," Finucane said. Trade in the so-called voluntary carbon markets was wortharound $2 billion in 2021, according to Ecosystem Marketplace,and could hit $50 billion by 2030, consultants at McKinsey haveestimated. While companies need first to reduce as much of theiremissions as possible, some will not be able to be eliminatedstraight away, meaning carbon markets are needed to help fillthe gap, Montag said. Among issues holding back the market so far have been alimited supply and lack of access to credits, insufficientfinancing for projects and concern about the quality of somecredits, Rubicon said. To help fix this, Rubicon aims to provide easier access tothe market for companies by vetting projects and their credits,and by providing a technology driven method of analysing,tracking and reporting that reduces costs. Its first product, Rubicon Carbon Tonne (RCT), will bebacked by an initial inventory of carbon credits totalling 20million tonnes of emissions removed from the atmosphere. The credits are generated from both nature-based projects,which could include for example protecting peatland, as well asthose linked to reducing industrial emissions, such as bycapturing methane from landfill sites. In addition, the company said it was developing a financingsolution called Rubicon Carbon Capital that would allow it topartner with developers and help fund new projects. The money raised by Rubicon will be used to buy more creditsand develop Rubicon Carbon Capital, the TPG spokesperson said. (Reporting by Simon JessopEditing by Mark Potter)