Alberta firm buys Kyoto emission credits

Last Updated Wed, 25 Aug 2004 21:49:03 EDT
CBC News

CALGARY - An Alberta electricity producer has become the first Canadian company to buy foreign emission credits under the Kyoto environmental protocol.

TransAlta Corp. signed the deal Tuesday with a large Chilean food company called Agrosuper.

TransAlta says that under the 10-year deal, it will buy 1.75 million tonnes of greenhouse gas credits. The price was not revealed.

Under the Kyoto agreement, countries will have to meet targets for reducing their greenhouse gases. Companies with low pollution levels can earn credits that recognize their environmental efforts.

Businesses that have trouble meeting Kyoto targets can buy these credits, which allows them to put out more pollutants.

Owns coal-fired plants

TransAlta owns a large number of coal-burning generating plants and says it expects to face serious challenges under Kyoto.

The Kyoto protocol is meant to fight global warming by reducing carbon-dioxide emissions by eight per cent of their 1990 levels by the year 2010.

So far, 123 countries have signed the deal, including Canada and all 25 European Union members. However, it's not yet in effect because it must be signed by nations accounting for at least 55 per cent of the industrialized world's emissions.

The United States has refused to sign and Russia is still considering.

Written by CBC News Online staff
Copyright © CBC 2004

TransAlta's news release:
TransAlta completes first Canadian Certified Emission Reduction purchase under Kyoto

Comment
In part of their public relations effort to "green-up" their gas-fired strategy for Vancouver Island, BC Hydro committed to offset 50% of the carbon dioxide emissions from both the privately-owned Island Cogeneration Plant in Campbell River, and the Port Alberni Generation Project, later to be the Vancouver Island Generation Project.

The first attempt was to purchase carbon offsets in Canada. That drew a blank. Hydro then posted a request for submissions internationally. We believe that drew a blank as well.

Powerex, the energy trading subsidiary of BC Hydro, has an agreement to purchase the first three years' output from a new coal-fired generation plant in Hardin, Montana. We're not aware of any carbon offset arrangement there.

Good for TransAlta, insofar as there is as yet no regulatory requirement that they undertake this expense.

The question remains as to whether there is any real reduction in carbon emissions that comes from these agreements, or if it will end up as another busy new commodities market that keeps money moving and traders busy, but has very little net impact on global carbon emissions.

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