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- Supplier has 1 million gallons of diesel with a carbon intensity of 9.88 kgCO2e per gallon (see EIA estimates.)
- Customer has 100,000 gallons of diesel with a measured carbon intensity of 12.88 kgCO2e per gallon, from a high methane flaring producer.
- The customer wants to lower the carbon intensity of their fuel to 7.9 (20% below average), so they need to purchase -(12.88 - 7.9) * 100,000 = -78498,987 000 kgCO2e carbon intensity from supplier through a certificate.
- After the transaction, the supplier still has 1,000,000 gallons of diesel, but they can no longer sell them with a carbon intensity of 9.88. Having sold the customer -78498,987 000 kgCO2e carbon intensity, they now have 9.88 * 1,000,000 + 78,987 = 10,378,000 million kgCO2e of carbon intensity.
- So in future sales, the supplier must now claim carbon intensity 10.378 per gallon and pass them to its customers..
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