Playing The Numbers Game: The Impact of Changing Global Warming Potentials

Laura Sykes | May-09-14

 

 
 

 


In January, Alberta Environment and Sustainable Resource Development announced that they will be updating the GHG Global Warming Potentials (GWPs) used in the Specified Gas Emitters Regulation (SGER). This change will have a major impact on Environmental Professionals working in Alberta’s GHG market. Find out how in this article by GHG expert and EP, Graham Harris.

 
Guest Post:
 
By: Graham Harris, EP(GHG)
Vice President, Technical Services
Blue Source Canada
 
 
Unknown to many, Alberta has the distinction of having implemented the first legislation in North America which mandates greenhouse gas (GHG) reductions: the Specified Gas Emitters Regulation (SGER).  
 
In January of this year, Alberta Environment and Sustainable Resource Development announced that they will be updating the GHG Global Warming Potentials (GWPs) used in the SGER.1   Environmental professionals engaged in this area should be aware that the forthcoming changes will have important impacts for Alberta’s GHG market.
 
Since 2007, the SGER has required the largest industrial facilities in the province – that is, those emitting over 100,000 tonnes of carbon-dioxide equivalent/year (CO2e/yr) – to reduce their emissions per unit production by between 2 and 12% compared to their baseline performance.  These facilities are commonly known as Large Final Emitters (LFEs).  
 
For LFEs that cannot meet their SGER obligation through in-house improvements, three alternative compliance paths are provided:
 
  1. Purchase Emission Performance Credits from other LFEs that managed to exceed their obligation; 
  2. Pay $15/tonne into the Climate Change and Emissions Management Fund, or 
  3. Purchase Offset Credits (which represent GHG reductions made by non-regulated facilities, and include projects such as biogas, biomass, wind power and energy efficiency).
 
A mass of any GHG can be converted into the common unit of CO2e by simply multiplying that mass by the relevant GWP value: the SGER originally sourced GWPs from the Intergovernmental Panel on Climate Change (IPCC)’s Second Assessment Report (1996).  
 
However, the newly announced factors will come from the IPCC’s Fourth Assessment Report (2007) and will apply to the 2014 calendar year onwards. In other words, facility performance and Offset Credits from January 1, 2014 will be calculated using these new factors.  Table 1 compares the old and new GWPs for the GHGs that are covered by the SGER.
 
 
But do these changes matter?  In short, it depends!
 
For most LFEs and most Offset Projects, the majority of GHGs are related to the combustion (or avoided combustion) of fossil fuels such as coal, oil, gasoline, diesel and natural gas.  Based on emission factors from Environment Canada’s most recent National Inventory Report,2  Table 2 illustrates that the impact of the change in GWPs will be minimal for these sources.  LFEs and Offset Projects in this situation will therefore see little change in their compliance obligations, operational priorities or project economics.
 
 
On the other hand, the impact will be far more profound for LFEs and Offset Projects that directly release uncombusted CH4 or that leak SF6, HFCs or PFCs directly to the atmosphere.  
 
For example, Offset Projects such as solution gas conservation in the oil and gas sector, the collection and use of biogas for heat/power from anaerobic wastewater treatment ponds, and the diversion of organic waste from anaerobic decomposition in landfill, all directly reduce uncombusted CH4 emissions.  Using the old GWP values, these projects were creating 21 Offset Credits for every tonne of CH4 avoided. The new GWP of 25 will directly translate into almost 20% more Offset Credits from these projects.  This could be a significant factor for project economics and result in an increased number of GHG reduction projects in this area.
 
Similarly, these changes will have an impact on LFEs such as coal mines, oil sands operations with tailings ponds and natural gas transmission pipelines, which directly emit large masses of CH4 through venting or fugitive emissions.   Although their baseline emissions will also be adjusted to use the new GWPs, these LFEs will nonetheless see an increase in the proportion of their GHG footprint coming from these sources.  This will likely increase the importance placed on controlling venting and fugitive emissions. Conversely, it may mean that energy efficiency projects become a correspondingly less attractive investment from a GHG control perspective. 
 
In conclusion, the impact of updating Alberta’s GWP factors will vary from LFE to LFE, from Offset Project to Offset Project.  Environmental Professionals working for or advising participating companies or projects should be aware of these forthcoming changes and ensure they analyze the significance of the impact for their own situation.
 


About the Author

Graham is VP Technical Services at Blue Source Canada.  The last 7 years of his career have been focused on the sphere of greenhouse gas management. Graham has quantified and verified both greenhouse gas reduction projects and inventories, with experience in electrification, energy efficiency, acid gas injection, biomass, anaerobic wastewater, biogas, ozone depleting substances destruction, wind power, oil & gas (upstream and downstream), buildings (commercial and institutional), pulp/paper, manufacturing (plastics, fertilizer, livestock feed), mining, power, and agriculture.  

Graham has a BSc in Environmental Management and an MSc in Energy & Sustainable Building Design and is certified through ECO Canada as an Environmental Professional with a Specialization in Greenhouse Gas Quantification for Inventories and Projects, EP(GHG).

 

 
References
 
1. Alberta Environment and Sustainable Resource Development (2014). Notice of Change for Global Warming Potentials. January 23, 2014.
 
2. Environment Canada (2013).  National Inventory Report 1990-2011: Greenhouse Gas Sources and Sinks In Canada (Part 2).