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Canada releases draft protocol on landfill methane carbon credits

18 February 2022 IHS Markit Energy Expert

Canada published a draft protocol that, if adopted, will help landfill operators across the country generate offset credits by capturing methane from their sites and destroying it or repurposing it into energy.

The Landfill Methane Recovery and Destruction Protocol was released in January by Environment and Climate Change Canada (ECCC), and it will apply in jurisdictions that do not have an offset system and protocol for the same project type. "Alberta and Quebec have published protocols for landfill methane recovery and destruction, and protocols are under development in British Columbia and Saskatchewan," an ECCC spokesperson told OPIS on 11 February.

A component of natural gas, methane is much more potent than CO2, estimated to have 80-86 times the global warming potential over the first 20 years of its release. It accounts for 13% of Canada's total emissions, and municipal solid waste landfills are responsible for almost one quarter of that total.

In September, Canada joined the launch of the Global Methane Pledge, agreeing to cut methane emissions by 30% by the end of the decade. The pledge now includes nations that account for about 70% of annual methane emissions.

Prime Minister Justin Trudeau has said that he will introduce measures to cut oil and gas, transportation, and refining industry methane emissions by at least 75% below 2012 levels by 2030. In December, the government reported it's on track to reduce methane emissions from the sector by 40% to 45% by 2025 and will begin consultations early this year on accelerating the pace of reduction.

New protocol

The draft document lists five types of methane destruction devices that would be eligible for generating credits: enclosed flares onsite at landfills; open flares at landfills; boilers; turbines; and internal combustion engines. The program would apply retroactively to any project that was operating as of 1 January 2017.

As a safeguard to ensure that the methane destruction meets the "additionality" standard, the project cannot be related to existing regulatory requirements or be emissions controls required for a landfill to obtain an operating permit. Also, the rule states that "a landfill that is legally required to recover and destroy a portion of its LFG [landfill gas] is not permitted to generate offset credits for any LFG recovery and destruction beyond its legal requirement."

Projects are ineligible if the LFG that's produced is used for "energy generation or the associated displacement of GHG emissions from fossil fuel use or grid-delivered electricity."

The new protocol would be administered by ECCC through the Federal Greenhouse Gas Offset System, which is currently under development. The offset system aimed at encouraging cost-effective domestic GHG emissions reductions from activities that are not covered by carbon pollution pricing. Canada has established a carbon fee that is C$50/metric ton in 2022 and potentially could be increased to as much as C$170/mt by 2030, according to the country's nationally determined contribution to reaching the goals of the Paris climate treaty.

Draft regulations for the offset program were released in March 2021, and the publication of final regulations is targeted for mid-2022, ECCC said.

Even if the voluntary program is implemented, the government is still considering regulations to increase the number of landfills that take action to reduce methane emissions and ensure that landfills maximize methane recovery.

"Landfill gas capture and destruction projects have also been generating offset credits on the voluntary offset market for many years," ECCC said in a separate discussion paper. "The extent to which these market-based approaches drive reduction of methane emissions at landfills will be further evaluated as these measures evolve."

-- Reporting by Abdul Latheef, OPIS, with contributions by Kevin Adler, Net-Zero Business Daily.

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