1/23/17
Quebec and Ontario Start GHG Cap & Trade
Offsets program will produce value for landfill diversion and AD

To reduce greenhouse gas (GHG) emissions, Quebec and Ontario are instituting cap & trade systems beginning January 1, 2017.  The cap and trade program “gradually lowers greenhouse gas emissions from our biggest polluters. This gives us cleaner air and helps reduce the devastating impacts of climate change – such as damage to our homes, businesses, crops and forests caused by extreme weather events.  Putting a price on carbon encourages companies and consumers to make better choices for the environment. It gives polluters an incentive to cut emissions – if you pollute less, you pay less.”  Notably, one of the recommendations regarding what the average consumer can do is to “drink tap water!”

A key component of cap & trade is the use of offsets – reductions of GHG emissions realized by entities other than the regulated (capped) emitters.  If a regulated emitter of GHGs cannot, on its own, meet the emissions cap imposed on it, it can purchase offset credits from someone who has reduced emissions. As noted on the Ontario website, “Offset credits… create financial incentives for companies, people and organizations to implement projects to fight climate change. At the same time, offset credits… give companies or facilities lower-cost options and flexibility in how they meet their compliance obligation."

However, the market for offset credits requires strict oversight and certification that marketed offset credits are valid – they actually are creating long-term GHG emissions reductions.  Therefore, the governments of QU and ON are establishing in 2017 specific protocols for various kinds of GHG emissions reduction activities.  The idea is that if a GHG emissions reduction project strictly follows the protocol, the resulting quantified and verified GHG emissions reductions are certified for sale in the offset credit marketplace.  One offset credit is equal to one metric tonne of carbon equivalent removed or not emitted.

Climate Action Reserve (CAR), a long-standing California-based organization, has a contract with QC and ON to adapt existing offset protocols for use in the two provinces.  CAR is organizing working groups to assist in this process and has established a schedule for completing each offset protocol, including protocols pertaining to the management of organic residuals (food scraps, biosolids, etc.):

            Landfill methane protocol – January to May 2017

            Organic waste digestion protocol – February to August, 2017

            Organic waste management protocol – April to December, 2017

In early January, CAR presented information about the offset adaptation process.  NEBRA is tracking the implementation of this new cap & trade program and its offsets market, because it may create opportunities for additional financial returns from anaerobic digestion projects, diversions of organics from landfills, and, perhaps eventually, other biosolids and residuals management practices.   See related information on GHG emissions and residuals management on the NEBRA website under "Resources."