We published a bar chart race of Alberta's greenhouse gas (GHG) inventory back in June. They're so much fun, we thought we'd do another - this time, looking at where emission reductions in the province have been coming from.
Alberta was the first jurisdiction in North America to mandate industrial GHG emission reductions when it introduced the Specified Gas Emitters Regulation (SGER) in 2007. A key part of the compliance options for facilities regulated by SGER was the ability to purchase emission offset credits from non-regulated projects that had voluntarily made GHG reductions. SGER has since been replaced by the Technology Innovation Emissions Reduction Regulation (TIER) but the option of using offset credits for compliance remains.
Under the system, emission offsets must be created following a 'Protocol', which is essentially a methodology for a particular type of GHG reduction project. For example, there's a Protocol for wind power projects, and a protocol for replacing high-bleed pneumatic controllers with low-bleed ones, and so on.
Overall, 29 Protocols have been used to create over 63 million tonnes of carbon dioxide-equivalent (tonnes CO2e) of third-party verified emission offsets in Alberta. However, as the graph below shows, there are several Protocols that have dominated the mix. Initially, the vast majority of credits were created by the Tillage System Management Protocol (which was subsequently withdrawn and replaced by the Conservation Cropping Protocol). However, the largest contributor to date has been wind power, which overtook Tillage System Management as the biggest contributor in 2017. Carbon Capture & Sequestration (CCS) - which only makes its appearance in 2015, is now the third largest contributor of offsets in the province, and this reflects the contribution of just one project - Shell's Quest, which is located near Edmonton, AB. Similarly, the fifth most significant contributor - NO2 Abatement in Nitric Acid Production - has also come from a single project, by Orica.
As emission offset projects are generally allowed to create credits for between 8 and 13 years, this means the contribution of many of the early projects is going to come to an end in the next few years (the Orica project stopped adding new credits in 2017).
So it's probably just as well that the "cost of carbon" is due to rise, as it's clear the province is going to have to find a few more mega-projects like Quest and Orica, and/or find a way to encourage many more, smaller projects to be brought forward. Initially $15/tonne, now $30/tonne, the price of carbon in Alberta is probably going to rise to $40/tonne next year and $50/tonne the year after that, to maintain equivalency with the Federal carbon pricing system. If it does, this can only make developing new projects more attractive, allowing the good work done to date to continue.