Landfill gas scheme wins carbon credits

Palmerston North City Council’s Awapuni Landfill has won “carbon credits” from the government for a scheme that will capture the methane given off by the landfill and use it to generate electricity.

Local MP and Cabinet Minister Steve Maharey, in announcing the government support in Palmerston North today, said the scheme was expected to start generating electricity later this year.

Steve Maharey said the Council’s successful bid in the Government’s Projects to Reduce Emissions first tender round was the latest in a number of innovative approaches the Council had taken to managing waste.

“This scheme will use the methane gas it collects from wells installed around the landfill to generate electricity, most of which will be used by the Council’s neighbouring waste water treatment plant. That’s a win all round, for the Council, Palmerston North ratepayers and the environment.”

The project is one of 15 awarded “carbon credits”, or emission units, last December in the first tender round of the Projects to Reduce Emissions programme. It is the second successful project in the Manawatu region, joining a proposal from New Zealand Windfarms for a large wind farm near the Manawatu saddle.

Palmerston North Mayor Mark Bell-Booth is delighted that the Government is supporting the Council’s initiative.

“The carbon credits recognise the efforts the Council has gone to in reducing greenhouse emissions, particularly methane gas,” Mark Bell-Booth said.

“It is the equivalent of saving $150,000 a year in energy costs as well as allowing us to sell additional power to the national grid.”

Mark Bell-Booth said the scheme would enable the Council to sell the emission units on the international market from 2008-2012 for a total estimated cost of $2.25 million.

Steve Maharey said as well as putting to good use the methane that is given off as organic waste breaks down, the Council was also working to reduce the amount of waste that ends up in the landfill. . . / 2 “The Council has introduced a number of recycling initiatives ranging from green waste composting to recycling wood for firewood and collecting polystyrene for a local company to turn into under-floor insulation.”

Steve Maharey said methane was a potent greenhouse gas and the biggest New Zealand contributor to climate change. All New Zealanders could play a part in reducing the amount that was released into the environment.

“By simply composting garden rubbish and food scraps, a typical household can reduce the contents of the average rubbish bag that ends up at a landfill like Awapuni by nearly 50 per cent.”

Steve Maharey said the Awapuni scheme and the reduction in emissions it would achieve would not have been financially viable without the award of emission units.

"This demonstrates the value of the Projects to Reduce Emissions programme in stimulating projects that would not otherwise be carried out."

The Government received a total of 46 bids for the four million emission units offered in the Projects to Reduce Emissions tender. All 46 tenders were assessed by an independent panel, chaired by company director Rick Christie, while the final decisions were taken by the Chief Executive of the Ministry for the Environment, Barry Carbon.

Details of other projects awarded emission units will be announced as agreements are signed by the project owners and the Government.

The City Council’s Water and Wastewater Manager, Chris Pepper, said the Council would now purchase a co-generation plant to produce electricity through the burning of methane gas.

“We hope to have the plant installed and connected by July of this year,” he said.

Contact: Michael Gibbs, Press Secretary, (04) 471 9154 or (021) 270 9115, e-mail: michael.gibbs@parliament.govt.nz, www.beehive.govt.nz/maharey.

Malcolm Hopwood, Public Affairs Manager, Palmerston North City Council, (06) 351 4482.

Anna Smith, NZ Climate Change Office, (04) 916 7639 or (027) 476 8273

Attached: Backgrounder: Awapuni Landfill Gas to Electricity Generation Project Questions and Answers The Awapuni Landfill is on the outskirts of Palmerston North City and is owned by Palmerston North City Council. The Council plans to install a system to collect the landfill gas which is currently released into the environment. The greenhouse gas methane, contained in the collected gas, will then be used to produce electricity most of which will be used by the Council’s neighbouring waste water treatment plant. The rest will be available to the electricity grid.

The Council expects the scheme to prevent the equivalent of 30,000 tonnes of carbon dioxide being released into the environment each year. It will do this in two ways – by capturing the methane that is currently emitted and replacing electricity that would otherwise be generated from fossil fuels. The scheme is expected to start generating electricity later this year

Palmerston North City Council will be awarded up to 149,000 emission units during the first commitment period of the Kyoto Protocol (2008-2012). These will be awarded annually as it achieves its emission reduction targets. The landfill scheme is subject to normal approval processes, such as those required by the Resource Management Act.

What is the Projects to Reduce Emissions programme?

The Government has developed the Projects to Reduce Emissions programme to support initiatives that will reduce emissions of greenhouse gases. The programme is a key plank in the Government’s climate change policy package. This Projects tender round was the first to be run and offered a pool of four million emissions units or “carbon credits”. Businesses, organisations and individuals were invited to submit proposals for projects to reduce emissions of greenhouse gases in return for a share of the pool of emission units.

What are Projects?

Projects are a mechanism established in the Kyoto Protocol. For an initiative to qualify as a project it must achieve quantifiable reductions in greenhouse gas emissions that would not otherwise occur. It must also be additional to “business as usual”, ie the project owner must prove that without the award of emission units the project would not otherwise proceed.

What is an emission unit or “carbon credit”?

An emission unit is equivalent to one tonne of carbon dioxide (or its equivalent in other greenhouse gases) that would otherwise have been emitted into the atmosphere. International markets for carbon trading are developing even though the Kyoto Protocol has yet to come into force and project owners are able to sell their units on this market as they wish. Last December Meridian Energy’s Te Apiti wind farm, one of two early projects the Government supported, was offered a contract to sell its emission units to the Netherlands Government. This involved the first sale of New Zealand’s Kyoto credits. Significantly, the Netherlands will pay regardless of whether the Kyoto Protocol enters into force. Once the Kyoto Protocol comes into force many countries will need to buy extra units to meet their agreed emission targets.

How much is an emission unit worth?

The international market sets the price for emission units. The average price for the tender round in which Meridian Energy agreed to sell its units to the Netherlands Government (see above) was NZ$10.50 a unit. This is a good indication of the current worth of emission units. Details of the volume and value of the Meridian Energy credits traded are confidential.

What other projects have been awarded emission units in the Projects to Reduce Emissions programme?

Two other successful projects were announced last December. They are: Te Rere Hau Windfarm, New Zealand Windfarms – a proposed 50 megawatt windfarm in Manawatu Toronui Mini-Hydro Power Scheme, Esk Hydro Power – a proposed mini-hydro scheme on the Pask family’s Toronui station in northern Hawkes Bay.

Details of the other 12 projects awarded emission units will be announced as agreements are signed by the project owners and the Government.

What is the status of the Kyoto Protocol?

More than 100 countries have ratified the Kyoto Protocol including the member states of the European Union, Canada, Japan, Norway, Iceland and a number of Eastern European countries. The Kyoto Protocol will enter into force if 55 countries (including developed countries that were responsible for 55 per cent of developed-country carbon dioxide emissions in 1990) ratify the Protocol. This requires Russia to ratify.

There has been a series of conflicting messages from Russian officials and ministers about whether Russia will ratify. However, there are no definitive or unanimous signals as to whether Russia will do so or not.

In the meantime it is worth noting that: Russia stands to gain significantly from the Kyoto Protocol as it has large numbers of carbon credits to sell. In New Zealand, businesses and other organisations have submitted more than 40 projects in this tender round because they want some of the benefits the Kyoto Protocol offers. International markets for carbon trading are developing even though the Kyoto Protocol has yet to enter into force.

What happens if the Kyoto Protocol does not enter into force?

If the Kyoto Protocol does not enter into force the Government’s agreements with project owners will automatically be terminated.

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