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.

California carbon market launches, permits priced below expectations

(Reuters) - California's largest greenhouse gas emitting businesses paid $10.09 per metric tonne (1.1 ton) for the right to release carbon, raising almost $300 million for the cash-strapped state and its energy companies in its first-ever carbon permit auction,

The permit price was below market expectations despite strong demand from utility companies, manufacturers and oil refineries participating in the auction, market sources said.

Ahead of the California Air Resources Board announcement on Monday, traders, brokers and analysts had predicted a clearing price in the range of $11.75 to $12.50 a tonne.

"The clearing price was below expectations but total participation was higher than most expected from vintage 2013," said Jeff King, managing director of environmental markets at Scotiabank.
All of the 23.1 million permits offered at the auction to cover 2013 emissions were bought, raising $233 million. The money will be given to the state's utility companies, which must use it to protect ratepayers.

The California carbon auction is a key component of the state's cap-and-trade program, the first of its kind in the country. State officials hope it will serve as a model for other states and the federal government.

The program is part of a broader effort to reduce Californian emissions to 1990 levels by 2020 -- about a 15 percent reduction, compared to business-as-usual forecasts.

The permit sale was held on November 14 and announced Monday. It is a crucial step ahead of the cap-and-trade program's official start on January 1, 2013.

"By putting a price on carbon, we can break our unhealthy dependence on fossil fuels and move at full speed toward a clean energy future," Mary Nichols, chairwoman of the board, said in a statement.
"That means new jobs, cleaner water and air -- and a working model for other states, and the nation, to use as we gear up to fight climate change and make our economy more competitive and resilient."

LAWSUIT LOOMS
Compliance entities -- companies directly affected by the state's carbon caps -- bought around 97 percent of the allowances. Financial institutions bought the remaining 3 percent, the board said.
The state also auctioned 39.5 million permits that cover 2015 emissions but only sold about 5.6 million allowances.

Demand for those permits was weaker than expected, and those allowances cleared at $10.00/t, the lowest price allowed under the program's rules.

The $55 million raised by the sale of those allowances will be deposited into the state's newly minted Air Pollution Control Fund.

The money from the permit auction must be used to fund clean energy projects and energy efficiency programs, although details on how exactly the money should be spent needs to be hammered out by the state legislature.

Nichols said she wasn't surprised that not all of the 2015 allowances were sold given the large number of permits offered.

On the eve of last week's auction, the state's largest business group, the California Chamber of Commerce, filed a lawsuit challenging the state's right to sell allowances and keep the profits.
Although the state is giving 90 percent of the program's allowances away for free to covered businesses at the outset of the program, the group said all of the permits should be handed out freely, which would negate the need for the state's quarterly permit auctions.

Nichols told reporters on a conference call the lawsuit had "no impact" on the auction.
During its first two-year phase, the cap-and-trade program will cover 350 businesses representing 600 facilities, including power plants, cement-making facilities and oil refineries.

Banks and other financial institutions are also allowed to participate in the auction, although there are limits to the number of permits any one entity can hold.

Trade of CCA futures contracts, which have been traded on the IntercontinentalExchange since August 2011, were quiet in the run-up to the auction results.

Prior to the announcement, CCAs for 2013 emissions were bid at $10.25 with an asking price of $14, a wider than usual spread, with no trades seen, one trader said.

Ahead of the auction results announcement, traders and brokers said they expected the secondary market price for allowances to quickly align with the auction clearing price.
(Reporting By Rory Carroll; Editing by Bob Burgdorfer and David Gregorio)

UPDATE 2-California's carbon permit auction beats expectations

Feb 22 (Reuters) - California's largest greenhouse gas-emitting businesses paid $13.62 per metric tonne (1.1 tons) for the right to release carbon, narrowly beating market expectations in the state's second carbon permit auction.

At the state-run auction, California managed to sell all of the nearly 13 million carbon permits it offered to cover emissions for this year and less than half of the roughly 9.6 million permits it offered to cover 2016 emissions, the California Air Resources Board (ARB) said on Friday.
Allowances to cover 2016 emissions cleared the auction at the lowest allowable price under the program's rules, $10.71 per tonne amid weak demand, the ARB said.

The quarterly allowance auctions are a critical component of the state's cap-and-trade program, the first of its kind in the United States. It uses market mechanisms to reward companies that figure out ways to reduce pollution below levels set by the government, and serves as the backbone of California's effort to cut emissions back to 1990 levels by 2020.

California hopes its climate change program will serve as a model for other states and the federal government.

Environmentalists and market participants hailed the auction results as a success.
"Today's results represent another successful chapter in California's story of cutting pollution and moving towards a clean energy economy," said Derek Walker, an associate vice president at the Environmental Defense Fund.

"The results also demonstrate that this is a strong, viable carbon market," he said.
Jeff King, managing director of environmental markets for Scotiabank, also hailed the results, noting that the clearing price was more closely correlated with the secondary market price for allowances than it was at the program's inaugural auction in November.

STRONG DEMAND
King said that strong demand for the 2013 vintage allowances was a sign that the new market is developing well.

"The 2.47 times subscription rate is a bullish indicator for future auctions," he said.
At the first auction, demand only barely outstripped supply.

Emilie Mazzacurati, managing director of climate consulting and research firm Four Twenty Seven, said she expects participation to grow again at the next auction, which is scheduled for May 16.
"I think a number of compliance entities that had waited out the first auction have now jumped on the bandwagon and that the financial sector is taking more of an interest in the market."

Banks and other financial institutions upped their participation at this auction, purchasing almost 12 percent of the current year allowances offered, up from about 3 percent in November.

REVENUE
The sale of permits raised about $84 million for the state, an ARB spokesman said, money that will deposited into a new state-run greenhouse gas reduction account.

That money will be added to the nearly $54 million it raised from the sale of allowances at the November auction.

California regulators are currently weighing how to allocate those funds and are holding a series of forums around the state to receive input from the public on how it should be spent.
The next public workshops are scheduled to take place in Sacramento on Monday and in Los Angeles on Wednesday.

California Governor Jerry Brown is expected to release his plan for spending the revenue to the legislature in May, the ARB spokesman said.

But not everyone agrees that California should be raising money from the sale of carbon allowances.
In November, the California Chamber of Commerce sued the ARB, claiming it lacked the legal right to raise revenue through the auctions.

The state's largest business group said the carbon permits should be handed out to businesses freely.
Last week, the National Association of Manufacturers, the nation's largest manufacturing trade group, said it would join the lawsuit on the side of the California Chamber of Commerce.

Environmental organizations including the EDF and the Natural Resources Defense Council have intervened in the suit on the side of the state, saying the auctions are necessary to price carbon correctly and raise revenue to support clean energy.

A hearing in Superior Court in Sacramento County is scheduled for May 31.

California's second carbon auction gets higher price

By Dale Kasler
dkasler@sacbee.com

By Dale Kasler The Sacramento Bee

Last modified: 2013-02-25T16:54:32Z

Published: Saturday, Feb. 23, 2013 - 12:00 am | Page 6B

Last Modified: Monday, Feb. 25, 2013 - 8:54 am

Copyright 2013 The Sacramento Bee. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

California's fledgling cap-and-trade carbon market is becoming more familiar to the companies that have to participate in it – and that's showing up in the price they're paying for the right to pollute.
Carbon emission allowances sold for $13.62 a ton this week during the state's second-ever carbon auction, the California Air Resources Board reported Friday.

The price at Tuesday's auction was considerably higher than the first state-run sale last November, when carbon sold for barely above the $10 legal minimum.

The cap-and-trade market is the centerpiece of AB 32, California's effort to curtail greenhouse gases and global warming.

Experts say the companies that have to buy emissions allowances are becoming more comfortable with the process, resulting in more aggressive bidding.

The latest results "demonstrate that this is a strong, viable carbon market," said Derek Walker, associate vice president at the Environmental Defense Fund, in a prepared statement.
The cap-and-trade system puts a ceiling on the annual carbon emissions by hundreds of industrial polluters; the ceiling declines slightly each year. Companies get most of their emissions allowances for free, but they have to buy some of them at auction.

Those companies that are polluting too much can either scale back their emissions or buy allowances, either from the state or on the open market. State officials say this market approach to environmental regulation gives companies flexibility and will breed innovation.

Still, big business lobbyists call the program a heavy cost burden. The California Chamber of Commerce is suing the state, arguing that all the carbon credits should be distributed for free.
In the latest auction, all 12.9 million credits – each good for emitting a ton of carbon this year – sold out.

The auction for credits that can be used to emit carbon in 2016 was less robust – just 4.4 million credits sold, at the minimum price of $10.71 a ton.

In all, the auction raised $223 million. The Legislature has declared that the proceeds must be spent on environmental purposes, with a focus on improving air quality.

© Copyright The Sacramento Bee. All rights reserved.

Read more here: http://www.sacbee.com/2013/02/23/5210552/californias-second-carbon-auction.html#storylink=cpy

What California’s Carbon Market Is Doing Right

The second auction of carbon permits for the world’s second-largest carbon market beat analysts’ expectations--but can it drive real environmental results?

 

 

The California Air Resources Board, which currently runs the world’s second largest carbon market, confirmed Friday that permits to emit greenhouse gases for the rest of 2013 closed at $13.60 a ton, $3.53 up from last year, $2.90 above the minimum price, and $1.30 up from analysts’ peg. These results stand in stark contrast to the world’s largest market, the European Emissions Trading System, where prices plunged to less than $4 a ton this month. In other words, California’s cap and trade system is working: Companies are buying carbon credits at market rates to make sure they aren’t penalized by the state for emissions they produce later.

"Of the $176 million generated from the sale of current vintage allowances, just under $140 million will be returned to the state’s electric utilities for the exclusive benefit of their customers," wrote Alex Jackson of the Natural Resources Defense Council. "For the millions of California households that draw power from one of the state’s three large electric investor-owned utilities--PG&E, Southern California Edison, and SDG&E--that will take the form of a historic climate dividend."

For the millions of California households that draw power from one of the state’s three large electric investor-owned utilities, that will take the form of a historic climate dividend

The good news came amid some embarrassing news that a trading "glitch" in the first auction, last November, led to the utility Southern California Edison erroneously putting in 72% of all bids in the auction.

That said, environmental groups lauded the successful auction last week, which will show up in the pockets of Californians.

Little Unity Over California's Cap-And-Trade Program

Businesses and environmentalists remain deeply divided over California's landmark carbon cap-and-trade program, with industry calling it a job-killing nightmare and clean energy proponents saying it has positioned the state as a global leader in tackling climate change.

The strong feelings over the policy were on display at a conference last week in Sacramento, where business groups and environmentalists repeatedly clashed over the market-based program, a key component of the state's effort to roll back its output of heat-trapping gases to 1990 levels by 2020.
While environmentalists say the effort is already attracting clean energy businesses to the state, industry argue it could drive them away.

"My manufacturers are now living their worst fears," said Dorothy Rothrock, vice president of government relations at the California Manufacturers & Technology Association, which represents 600 businesses in the state.

Without immediate fixes to the program, like giving away all of the program's carbon permits to businesses for free, some of her members may eventually need to raise prices, lay off workers, or flee the state, she said.

"My companies are saying, ‘What are we supposed to not pay for in order to pay this new cost?'" she said.

The success or failure of the 2-month-old program will have broad ramification for the concept of cap and trade, a policy where the government sets a limit on the amount of greenhouse gas emissions that businesses can produce. It then either sells or hands out for free a dwindling number of carbon permits, also known as "allowances."

The allowances can be used for compliance with the regulation or, if the company can reduce its emissions on its own, can be sold to businesses that need them.

The program is also a new source of revenue for the cash-strapped state, having brought $138 million into state coffers from two permit auctions, and millions more to power companies who will use it to offset higher electricity rates. Debate is now underway over how the state will spend the revenue with a draft plan expected to be released by Governor Jerry Brown's administration in April.

At the conference, environmentalist pushed back against the idea of giving all the permits away for free saying it would not only deprive the state of money it needs to fund clean energy programs, but could also enrich the very companies the program seeks to regulate if they cash in on the value of the permits while passing the new costs on to consumers.

Alex Jackson, an attorney with the Natural Resources Defense Council, said the program is off to a good start and said it would be a mistake to make major changes to it now.
He added that the 2006 law that led to the cap-and-trade program, AB 32, has already attracted clean energy businesses to the state.
Jackson cited the relocations of biofuels provider Propel Fuels, solar company Sungevity and electric car manufacturer Electric Vehicles International to California after passage of AB 32 as proof that California's landmark law is attracting clean energy businesses to the state.

But California's food processors joined the manufacturers in expressing their concerns about the program, but unlike the state's cement plants or steel mills, they said moving is not an option for them.

"You can't move a tomato processor. They need to stay in the area, so we're trapped," said John Larrea, director of government affairs for the California League of Food Processors.

Both Larrea and Rothrock said that while the program is a drag on business now, it will get even worse in 2015 when it expands to cover many more businesses and the number of permits given for free to their members is reduced.

Both Larrea and Rothrock said they would prefer the state simply tell them how much each facility can emit over the cap-and-trade policy as it is currently designed - ironic since cap-and-trade has long been touted as a business-friendly alternative to direct government regulations.

All sides of the issue are now looking ahead to coming battles over the program, including an updating of the state's "scoping plan," which outlines the suite of policies used to meet the state's long-term emissions goals. A draft of the new plan is expected by the end of the year.

California's largest business group, the California Chamber of Commerce, last year filed a suit against the program, claiming the quarterly auctions are illegal. A hearing on the case is scheduled for May 31 at Sacramento Superior Court.


Read more: http://www.foxbusiness.com/industries/2013/03/06/little-unity-over-california-cap-and-trade-program/#ixzz2NFvW8QVR

First Carbon Offset Projects To Be Reviewed By Air Resources Board

By Bob Moffitt

Twenty five projects initiated before the state finalized its Cap-and-Trade rules will be inspected to ensure they met state requirements.

Permalink

(Sacramento, CA)
Friday, March 08, 2013

The California Air Resources Board says it's reviewing the first twenty five projects submitted that promised to offset greenhouse gas emissions. If approved, the businesses can earn credits under the state's Cap-and-Trade Program.

Stanley Young with the Air Resources Board says certified inspectors will determine how much pollution each project eliminates. "We require that the project developer hire and accredited person- a third-person verifier, to take a close look at the paperwork involved in this and make sure they went through all of the proper steps and followed the stringent rules."

Most of the projects either used manure from dairy farms in biodigesters or eradicate ozone-depleting chemicals.

If the 25 projects performed as promised, they would eliminate three million tons of carbon