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Canadian Consortium of Energy Companies Buys Greenhouse Gas Reductions from Ontario Landfill Operator 

Vancouver, September 21, 2004 – The Greenhouse Emissions Management Consortium (GEMCo) is maintaining its position as a leading buyer of greenhouse gas (GHG) Emission Reduction Credits (ERCs) with its recent payment for 63,750 tonnes (in carbon dioxide, CO₂, equivalents) to Integrated Gas Recovery Systems (IGRS) of Niagara Falls, Ontario. IGRS’s 2004 GHG ERC Claim is the first of a series of annual claims that GEMCo will pay for under a firm forward agreement that requires IGRS to reduce GHG emissions at their Ontario operations by a total of 850,000 tCO₂e over a 10-year term.

GEMCo is a consortium of Canadian energy companies focusing on the development of market-based strategies that reduce greenhouse gas emissions. IGRS provides specialized services to the privately-owned Niagara Landfill. Four of GEMCo’s current members participated in the long-term ERC purchase agreement with IGRS.

Emission reductions are created when IGRS collects methane-containing landfill gas (LFG) that would normally be released to the atmosphere from the landfill site, processes and compresses the LFG, and then moves it 3 kilometers by pipeline to a paper mill. At the mill, the LFG is blended with natural gas and the blended gas stream fuels the boilers. GHG emission reductions result from the conversion of the methane to carbon dioxide, through the combustion process, when the methane would otherwise have been released directly to the atmosphere from the landfill site. Methane is a GHG that has 22 times more destructive, in terms of global warming potential, than carbon dioxide.

The LFG recovery and utilization project, which became operational in 2002, enables the mill to reduce its demand for natural gas and makes a productive fuel out of a common waste gas that is produced when landfilled organic material decomposes. Used in this manner, LFG is classed as green or renewable energy. The project required revenues from GHG ERC sales to be economic over the long run. GEMCo and IGRS started negotiating the terms of an option call on the project’s GHG ERCs in 2000. GEMCo exercised its option call on the long-term ERC supply agreement with IGRS in December 2003.

To generate revenues from GHG ERC sales, plant owners document and audit key operating activities and demonstrate that overall facility GHGs are lower than pre-project levels, industry standard practice, and what they would be if the plant was operated in straight compliance with any operating or environmental codes and regulations that will apply at the plant over the term of the ERC sales agreement.  GEMCo members help curb Canada’s high national GHG emission growth rates by creating a forward market for these “beyond compliance” investments in every part of the Canadian economy where GHGs can be cost-effectively reduced.  In most cases, ERCs will eventually be surrendered to Canadian environmental regulators in partial compliance with future emission cap and trading rules that require Canadian emitters to reduce greenhouse gas emissions per unit of output. 

"We are very pleased to participate in a major GHG credit trade that takes place in the heart of Ontario," says Aldyen Donnelly, President of GEMCo. Walt Graziani, President of IGRS, welcomed the use of emission reduction funding to accelerate reduction projects.

Both Donnelly and Graziani agreed that this project generates real reductions in emissions that will be important in any regime that might be implemented in the future, whether the Kyoto Accord comes into effect or not.

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