Ontario Power Generation purchases emission credits
Ontario Power Generation (OPG) has announced the world's largest ‘spot’ trade in greenhouse gas emission reduction credits announced to date.
The company has purchased emission reduction credits equivalent to the reduction of 2.5 million tonnes of carbon dioxide. The credits were generated by US-based Zahren Alternative Power Corporation (ZAPCO), through its collection of landfill gas and combustion of methane for the production of electric power. Connecticut-based ZAPCO is one of the largest developer owner-operators of landfill gas collection and energy projects in the US.
The credits purchased by OPG were produced from landfill gas collection systems operated at over 20 sites in the US during 1998, 1999 and into 2000.
John C. Fox, Executive Vice-President and Chief Operating Officer of OPG, noted: “This trade will help OPG meet its voluntary commitments at lowest cost to our customers. It helps show that what’s good for the environment can also be good for business.”
OPG has made a voluntary commitment to stabilise its greenhouse gas emissions at 1990 levels of 26 million metric tons CO2 equivalent from the year 2000 forward. OPG has invested more than $1 billion over the past decade to reduce emissions.
Bernie Zahren, President of ZAPCO, stated: “The proceeds from this transaction will help us expand our development activities. The technologies we use are critically dependent on the support of financial transactions like the one we are entering into with Ontario Power Generation”.
Chicago-based Environmental Financial Products LLC arranged the transaction and advised both parties. The trade will be reviewed by Ontario’s Pilot Emission Reduction Trading Program (PERT), and the emission reductions will be independently reviewed by PricewaterhouseCoopers LLP. This is believed to be the first time a Big Five accounting firm will apply its auditing expertise to an emissions trade of this magnitude across national boundaries.