What’s the scam with the carbon credits middlemen? Correspondence obtained by MWM claims brokers are taking fees equivalent to half the value of the project’s credits, even more.

The energy and carbon consultants that mediate between the Clean Energy Regulator (CER) and project owners are taking up to 70% of the value of the Australian Carbon Credit Units (ACCU), according to industry sources.

In a note from Martin Energy Group’s Andrew Boughton to Dairy Australia, he says, “It beggars belief that 20% to 50% of the value of a national carbon credit scheme designed to help farmers and builders is being used to benefit office-bound intermediaries in a wildly disproportionate way relative to their services and assumed risks.”

The policy gaps in the Federal Clean Energy Regulator (CER) space, this is a curious issue. We're dealing with it in the background, but suffice to say, the energy and carbon consultants that mediate between the CER and project principals, whether farmers or builders and Build Own Operators, have been taking variable fees from principals. When I say variable, I mean up to 70% though more commonly between 20% and 50% of the value of the ACCUs for any given project. Under the now 15-year ACCU cycle for biogas projects, what should be charged by the intermediaries as fixed consulting fees of perhaps $100,000 and $250,000 over the life of a project, they will take between $4 ml to $16 ml, which by rights belong to the project principals. Were these intermediaries assuming serious risk, as do private equity firms that will purchase projected ACCU streams to give a project principal the capital to build plants up front, certainly a 20% to 30% discount against future hypothetical revenue streams would be entirely fair and reasonable. But they are not. What they have is a grasp of the arcane process under which the ACCU scheme is administered, where a minor administrative mistake by a project principal can cost registration failure and many millions of dollars, as well as the ability to call the CER team at any time and get an immediate response.

For our first Build Own Operate project in Australia, we were presented with a confronting situation in which an energy consulting intermediary demanded 70% of the value of the ACCUs for the project PLUS their initial and annual consulting fees, and when we objected we were assured it was an offer we could not refuse. Our experience has since been independently confirmed by a senior consultant who had worked for that energy consulting firm and others, after he established his own firm where he charges a fixed fee.
It beggars belief that 20% to 50% of the value of a national carbon credit scheme designed to help farmers and builders is being used to benefit office-bound intermediaries in a wildly disproportionate way relative to their services and assumed risks.

https://michaelwest.com.au/carbon-consultants-creaming-it-whats-the-scam/

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