U.S.-China climate deal called "breakthrough" but no long-term cuts yet

By Valerie Volcovici

       
WASHINGTON (Reuters) - China and the United States took a major step in the fight against climate change over the weekend, but what was termed a "breakthrough" might not do much in the longer term to lock in legally binding carbon emission cuts from the world's two biggest emitters of greenhouse gases.

Still, environmental groups and some U.S. and global policymakers said the agreement could give fresh momentum to the United Nations' arduous process of finalizing a global treaty to replace the Kyoto Protocol on climate change by 2015.

In their first talks, U.S. President Barack Obama and Chinese Premier Xi Jinping agreed to phase out production and consumption of the gases known as hydrofluorocarbons (HFCs), working under the U.N's 1987 Montreal Protocol.

Used mostly in air conditioners and refrigerators, ozone-harming HFCs make up roughly 2 percent of greenhouse gas emissions, but are rising at a rate of up to 9 percent annually.

The White House said a global phase-down could reduce the carbon dioxide equivalent of 90 billion tons by 2050, roughly two years worth of global greenhouse gas emissions.

"We see that as just the first step of a long and robust international climate agenda in the second term," Heather Zichal, deputy assistant to the president for energy and climate change said on Tuesday.

Analysts worry that the U.N. climate talks continue to be hampered by deep divisions between developed and developing countries over the responsibility for carbon emissions.

One official close to the negotiations said the agreement was a political breakthrough, but the road ahead to a global deal on climate change would still be long.

The official said the weekend agreement, which followed earlier talks between Secretary of State John Kerry and Xie Zenhua, a vice chairman in China's top economic development body, can inject a dose of optimism into the U.N. climate talks. But the deal represents a powerful example of what can be done when two major powers work together, the official added.

TALE OF TWO TREATIES
Experts have said addressing HFCs under the separate Montreal Protocol, regarded as a successful international treaty, can lead to major emissions reductions while negotiators hammer out parameters of a workable new climate treaty by 2015.

"This is the biggest, fastest, most effective climate mitigation that could happen in the near term," said Mark Roberts, international policy advisor of the Environmental Investigation Agency, a group involved in climate issues.

Unlike carbon dioxide, the most prevalent and longest-lasting greenhouse gas produced across many sectors of a country's economy, HFCs are short-lived and confined to just a handful of sectors, making them easier to tackle.

The Montreal Protocol also creates different timetables for rich and poor countries to phase out production of the gases and gives poor countries financial support to use alternatives. It has already phased out the use of 100 hazardous chemicals.

The United States, Mexico and Canada first proposed the phase-out of HFCs under the Montreal Protocol in 2009. At that point China, India and Brazil opposed the plan, arguing that HFCs should be addressed in U.N. climate negotiations.

Durwood Zaelke, founder of the Institute for Governance and Sustainable Development, said the constraints of U.N. climate talks have created the need for diplomatic moves outside of that process, such as the new U.S.-China agreement.

"This is the beginning of a movement to enlist more climate mitigation from parallel venues," he said, adding that such deals take some pressure away from U.N. climate talks and open the way for other solutions.

Zaelke pointed to negotiations within the International Maritime Organization and the International Civil Aviation Organization as examples of venues where shipping and aviation emissions can be addressed untethered from U.N. climate talks.

The HFC agreement is "rebuilding an urgent sense of optimism" in the multilateral process that can pave the way for agreements on other short-lived greenhouse gases, such as black carbon, the soot emitted from cook stoves and diesel engines, Zaelke said.

More of these kinds of agreements could be on the horizon, those familiar with climate negotiations have said.

A U.S.-China climate change working group formed in April is expected to come forward with a number of new proposals at the next U.S.-China Strategic and Economic Dialogue from July 8-12.
Diplomats will also gather in Bangkok on June 24 for a week of Montreal Protocol meetings and could start negotiations on an HFC phase-down at that point.

California Considering 25 Projects for Carbon Offset Credits

 

By Lynn Doan - Mar 8, 2013 6:27 PM ET

             

California, the second-largest carbon-polluting state in the U.S. behind Texas, will decide whether to award its first carbon offset credits for 25 projects designed to cut greenhouse-gas emissions.
The candidates for offset credits include a project to improve forest management practices to avoid emissions related to timber harvesting and several to destroy biogas at farms, according to a list posted on the state Air Resources Board’s website. All of the projects must be reviewed by a certified “offset verifier” and then by the air board itself before being deemed eligible.
Should all of the projects be approved, they’ll generate as many as 3 million offset credits to be used under California’s carbon cap-and-trade program, the only system of its kind in the U.S. and the second-largest in the world, behind the European Union’s program. The state defeated a lawsuit in January that claimed the offsets, which companies can use to cover as much as 8 percent of their emissions, aren’t new efforts to cut carbon and would occur without investments.
The projects listed by the air board today will be held to “rigorous verification standards,” Mary D. Nichols, the agency’s chairman, said in a statement posted on its website. “We have determined that every single California offset credit allowed into the program represents a real ton of greenhouse gas reductions.”

Contracts Rising

Contracts based on California offset credits, each allowing the release of one metric ton of carbon, have risen 25 cents, or 2.1 percent, in the past month, according to data compiled by environmental broker Evolution Markets based in White Plains, New York. “Golden” offsets, which come with a seller guarantee to replace any invalidated credits, were unchanged at $12 a ton today, according to Evolution.
The projects would be awarded “early action” credits, which the state agreed to consider to generate an initial supply of offsets for the market. To be eligible, they must cut emissions in the U.S. between 2005 and 2014 and be listed in a preexisting registry designed to meet the state’s early action criteria, among other things.
Emissions-reduction projects that begin in 2015 and beyond must meet a different set of state standards.

Carbon Allowances

Under the cap-and-trade program, California established a pool of carbon allowances, each permitting the release of one metric ton of carbon. That pool is designed to shrink through 2020 to cut statewide emissions by roughly 15 percent. Companies over their emissions limits can buy allowances from those below the cap, as well as a limited number of offset credits, to meet their compliance obligations.
Futures based on 2013 California carbon allowances, which also allow for the release of one metric ton of carbon each, climbed 5 cents to settle at $14.55 a ton today, according to Atlanta-based IntercontinentalExchange Inc. (ICE)
California’s cap-and-trade system will eventually regulate 85 percent of greenhouse-gas emissions released in the state and cover all industries, including power generation, oil refining and transportation. A similar program in the U.S. Northeast, known as the Regional Greenhouse Gas Initiative, regulates emissions from power plants only.

Europe Glut

In Europe, an oversupply of offset credits has added to pressure on European Union carbon futures, already trading 49 percent below a year ago because of a glut of allowances due to the recession.
Kathrin Goretzki, an analyst at Unicredit Bank AG in Munich, estimated Jan. 29 that the EU market may have been oversupplied by much as 1.6 billion metric tons of permits by the end of 2012.
The United Nations Clean Development Mechanism has approved 6,619 offset projects in developing countries, more than half of which are in China, according to the UN’s website. More than 2,000 of these projects have supplied 1.26 billion tons of “Certified Emission Reduction” offsets for emissions-trading systems participating in the Kyoto Protocol, UN data compiled by Bloomberg show.
California’s air resources board may take “several weeks” to issue its first offset credits, according to the agency’s statement.
To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

Beyond Reclamation: Destruction, Conversion

By Peter Powell

April 8, 2013

Refrigerants are in transit for destruction. (Photo courtesy of Refrigerant Management Canada.)

At some point, a refrigerant brought back for reclamation simply can’t be brought back to ARI-700 purity standards. There are a couple of approaches, including, destruction, which has a long track record, and, another option, conversion, offers a much fresher approach.

Seek and Destroy

The destruction of no-longer-useable refrigerants has been going on in Canada for years. The process is administered by Refrigerant Management Canada (RMC), a not-for-profit corporation established by the Heating, Refrigeration, and Air Conditioning Institute of Canada (HRAI). The group describes itself as an “industry-led environmental care program committed to the responsible disposal of surplus ozone depleting refrigerants from the stationary refrigeration and air conditioning industry.” A board of directors oversees the program’s operations and includes representatives from the refrigeration and air conditioning industry, equipment owners, and environmental/community groups.

In a statement made in 2012, RMC said it has successfully verified and registered 170,000 ozone depleting substances (ODS)-derived registered emission reductions (RERs) on the Canadian Standards Associations (CSA) reductions registry. RMC recognized these statistics as the first verification of a successful ODS destruction project in Canada.

RMC noted it has been overseeing destruction programs since 2000. “The initial verification of this achievement involved the successful quantification, registration, and serialization of the ODS sourced by RMC from across Canada and destroyed at the Swan Hills Treatment Centre in Swan Hills, Alberta,” it was announced.

“We are proud to have officially quantified and verified the significant greenhouse gas reductions that our heating and refrigeration partners have helped the RMC program achieve. Ensuring that these potent greenhouse gases — having some of the highest known global warming potential (GWP) values — are properly recovered and destroyed is the goal of our program,” noted Warren Heeley, president, RMC.
Following this first verification, RMC delivered 60,000 RERs to natural gas and electricity retailer Just Energy as part of a long-term sales agreement. “The revenue generated from the sale of these offsets is extremely important to the financial viability of our program and will help to ensure that ozone depleting substances in Canada are properly managed and destroyed,” he said.

Blue Source Canada, RMC’s offset project development partner, documented and quantified the project according to ISO 14064 Part 2 standards using a protocol adapted from the Climate Action Reserve. This work was verified by ICF Marbek, and subsequently registered on the Canadian Standards Association (CSA) reductions registry. “Blue Source is pleased to have worked with RMC to deliver this high-quality greenhouse gas reduction project and to contribute to the financial sustainability of this great Canadian environmental program,” added Yvan Champagne, president, Blue Source Canada.

“Just Energy is proud to be a part of this groundbreaking project, delivering high-quality credits for our customers,” said Ken Hartwick, president and CEO, Just Energy. “We’re also glad to support RMC, a great organization doing great work in the area of Canadian environmental care.”

Just Energy will incorporate the carbon credits as part of its carbon offset programs for residential and commercial customers. The company offers green energy solutions through its JustGreen™ and JustClean™ programs that enable customers to offset up to 100 percent of the emissions associated with their everyday energy use through carbon offsets as well as renewable energy projects.”

Midwest Refrigerants

In the U.S., one of the most recent advancements in dealing with refrigerants has come from the company Midwest Refrigerants and its conversion process.

Lew Steinberg, president, Midwest Refrigerants, said the company will be listed on the U.S. Environmental Protection Agency (EPA) website as an approved chemical-conversion facility once its first U.S. facility opens, which is expected in 2013. Steinberg also said that “since chemical conversion is considered part of the chemical manufacturing process, not destruction by combustion, and is environmentally more favorable, used ODSs are not subject to hazardous waste rules.”

Steinberg said the first Midwest Refrigerants conversion plant will be able to convert 2 million pounds (2.5MT) annually. And, he said, engineering has been completed for plants that can process up to 12-15 million pounds (5,500 to 7,500 MT) annually.

He cited approvals from the EPA and the United Nations. “We’ve now got all our patents issued, EPA approval, UNEP-TEAP approval, and construction of our first plant is under way,” said Steinberg. “The EPA will shortly list Midwest on its website of certified ODS destruction companies. They are actually creating a new category of ‘ODS Converters’ and we will be the only one.”

The technology is described as a “chemical reaction with hydrogen and carbon dioxide” that manipulates the unwanted ODS/greenhouse gas molecules and irreversibly converts them back into their original source chemicals, 99.99-plus percent anhydrous hydrogen fluoride, hydrogen chloride, and carbon dioxide, all for new uses such as hybrid car batteries and electronics.”

In the process, “Even virtually undetectable emissions are not atmospherically vented, as the Midwest system is a closed loop. There are no emissions, no waste streams, and the process is extremely energy efficient. The process is effective on CFCs, HCFCs, HFCs, PFCs, and HFOs. The process is also effective on halons, methyl bromide, and most POPS [Persistent Organic Pollutants].”

Publication date: 4/8/2013

Peter Powell is Refrigeration Editor. E-mail him at peterpowell@achrnews.com.

RemTec's Refrigerants Buyback Program