Summer Newsletter 2014 Offsetters Summer 2014 Newsletter In this issu...
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The Alberta Carbon Market
Alberta has one of the few fully functioning compliance carbon markets in North America. Facilities with emissions greater than 100k tCO2e per year are regulated to reduce emissions by 12% in carbon intensity per production unit. To help meet this 12% reduction target, the Alberta regulation allows a facility to comply in four ways:
1. Make facility changes to improve performance and lower emissions
2. Purchase Alberta-based carbon offsets
3. Pay $15-a-tonne into the Climate Change and Emissions Management Fund
4. Purchase/use emission performance credits generated in previous years or at other facilities.
Approximately 6 million tonnes of offsets and allowance changed hands in 2010, with a further 4.6Mt of contributions to the Change and Emissions Management Carbon (CCEMC) Fund.*
Validation and Verification requirements
Alberta carbon offset projects are not required to have their project plans validated by a third party auditor because all projects must be developed to government prescribed protocols. While this approach can make the system more efficient and streamlines costs for project proponents, the lack of validation increases the likelihood of project failure at the verification stage, particularly for inexperienced project proponents.
Currently, verification is only required to be to a "limited" level of assurance but will be moving to reasonable in 2012. At present, any Chartered Accountant or Professional Engineer with relevant expertise can act as the verifier, but Alberta Environment is considering the issue of certification, to bring it in line with other markets.
Changes to the Alberta Offset System
The Alberta carbon market is undergoing substantial changes to levels of assurance and new offset regulations that pose potential challenges and new opportunities to large final emitters and project developers in Alberta. Offsetters can help your company capitalize on the new opportunities and to manage the challenges of the changing levels of project assurance and new offset regulations. In doing so, we can help your company maintain competitive margins while ensuring the most efficient adherence to Alberta's carbon compliance rules.
The regulation for the Alberta Offset System (ABOS) is changing in 2012. There are two significant changes that will have an impact on your business and on the market.
1. The level of assurance is changing from “limited” to “reasonable”.
In order to ensure that the emission reductions that are claimed are real, emission reduction claims must be assured by auditing/engineering firms. Initially, Alberta Environment set the auditor’s level of assurance to "limited" to allow system participants flexibility in the early stages of the program's development. In March 2011, Alberta mandated that the level of assurance be changed to "reasonable", consistent with carbon programs in other Canadian and international jurisdictions.
This change to the regulation has increased the risk of project failure and substantially increases the auditing cost for inadequately designed projects. Alberta Environment has recently completed 5 test audits of current offset projects and of these only 1 passed and the others had material discrepancies resulting in project failure.
2. From January 1st, 2012 Alberta Environment will no longer accept historic vintages.
Alberta Environment will require that all offsets generated for compliance are only from projects that create reductions after January 1, 2012. At present, the regulation allows offsets from vintages going back to 2002. This change means that there is approximately 6 months available for carbon asset owners who have made reductions to quantify, verify and register pre-2012 projects. As long as these projects are registered before the end of 2011, they will be eligible to generate emission reductions.
How Offsetters can help
We can help your company capitalize on the new opportunities and to manage the threats of Alberta’s changing levels of project assurance and new offset regulations. By doing so, we can help your company maintain competitive margins while ensuring the most efficient adherence to Alberta’s carbon compliance rules.
The CCEMC funding application process has a focus on GHG quantification. Involving Offsetters’ experienced GHG quantification team in this process at an early stage will improve a projects likelihood of getting funding in a highly competitive environment. The CCEMC application has 2 main areas where Offsetters can improve your probability of a successful application: at the Expressions of Interest (EOI) stage there is a GHG estimate; at the Final Project Proposal (FPP) stage a detailed GHG model that undergoes a third party audit is also required. Accuracy in these areas is crucial to a successful application and Offsetters can provide this assurance.
Offsetters has over 5 years of proven experience with carbon project development, project administration and documentation, and with the project data management procedures required to develop projects to a reasonable level of assurance. Our past experience with developing projects to a reasonable level of assurance in other jurisdictions positions us to provide project development services to Alberta-based offset developers and purchasers, including due diligence services around existing projects.
We have a team of greenhouse gas experts who are able to turn projects around in short time frames, reducing the risk of missing deadlines and project failure. Offsetters can facilitate and manage carbon project investments by removing the risk and the burden for asset owners.
To complete an eligibility assessment for carbon market funding email firstname.lastname@example.org or contact our offset project origination team at 604.699.2650 for more information.