Lisa DeMarco Quoted in the Toronto Star Online
June 13th, 2009Start-up biogas company Yield Energy's idea to cut greenhouse gases and waste to landfill, while selling cap-and-trade credits and electricity has upset the Ontario Power Authority.
Yield would make money by collecting a tipping fee for receiving the organic waste and by selling the renewable electricity it produces. By destroying the methane, Yield hopes to accumulate carbon credits that it can eventually sell to power generators, cement factories, steel manufacturers and other large industrial companies looking to offset their own greenhouse-gas.
The Ontario Power Authority, the government agency that would end up purchasing Yield's electricity under a 20-year contract, has decided that it, not developers, gets to keep all environmental attributes, including carbon credits, as part of any signed deal.
Lisa DeMarco, a partner with law firm Macleod Dixon LLP in Toronto and an expert on emissions trading, says the government appears to be contradicting itself. The Ministry of Environment, in its June discussion paper on cap-and-trade, specifically mentions biogas and landfill gas projects as obvious candidates for offsets.
DeMarco says renewable-energy projects should qualify for carbon credits because they displace fossil-fuel generation. But biogas and landfill gas projects are unique in that credits can also be earned for methane destruction.
The power authority, by paying a premium for green power, might have a case for keeping the carbon credits related to electricity displacement, experts say. But as far as DeMarco is concerned, methane destruction is a completely different story.
"There's a clear scientific and technical distinction between methane destruction and indirect electricity displacement," she says.
"It's absolutely critical that at least the methane destruction credits remain with the project developers, because these credits assist greatly in financing equipment that has nothing to do with electricity generation."
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