In Alberta, the Alberta Climate Change and Emissions Management Act was introduced in March 2007. Facilities that emit more than 100,000 tonnes of greenhouse gases a year must reduce their emissions intensity by 12 per cent from a baseline of average emissions intensity from 2003 to 2005.
Those who do not meet the 12 per cent reduction have the option to either pay $15 per tonne into a technology fund or purchase emissions offsets. The fund will be used by industry to research and develop emissions reduction technologies. Additionally, federal reporting requirements may come into effect in 2010 and will involve additional compliance requirements.
Carbon capture and storage (CCS) is TransAlta’s long-term strategy for coal-fired emissions reductions. Purchasing carbon offsets will help TransAlta meet our emissions reduction requirements until CCS is commercially viable.
In 2009, TransAlta did not purchase any offsets. Each year we generate offsets through our wind assets, and use them for compliance. In 2009, we created 148,000 tonnes of wind offsets from Summerview, Waterton South, Macleod Flats and Blue Trail wind farms. These offsets, along with emission performance credits generated in 2007 and 2008, total approximately 154,000 tonnes and will be used against the company’s net obligation of approximately 250,000 tonnes. TransAlta will pay the difference to the technology fund.
When wind farms are built, environmental benefits are often sold. The environmental benefits can be turned into renewable energy certificates RECs, offsets or greentags, depending on what creates the most value at the time. As these contracts expire, the owner of the wind facilities can use the environmental benefits as they see fit.