The Canada Growth Fund, a federal clean-tech financing agency, on Tuesday signed its second deal to backstop carbon prices with a proposed Alberta facility that would convert landfill waste to electricity and sequester the resulting carbon emissions.
CONTEXT
The proposed waste-to-energy facility, located near Edmonton and the first of its kind in Canada, would be a partnership between Calgary-based Gibson Energy, the CGF and Varme Energy Inc. It would have capacity to incinerate 200,000 tonnes a year of municipal solid waste and produce electricity.
A final investment decision is expected in early 2025 and commissioning would start in 2027.
BY THE NUMBERS
If the facility goes ahead the CGF will provide carbon price certainty through an agreement, known as a Carbon Credit Offtake, to buy up to 200,000 tonnes a year of carbon credits generated by the project at an initial price of C$85 ($61.80) per tonne for a term of 15 years.
WHY IT’S IMPORTANT
Canada has been working on ways to provide carbon price certainty to firms looking to invest in carbon capture and storage (CCS) technology to reduce their emissions.
Carbon credit offtake agreements guarantee the price companies receive for sequestered carbon, which they say helps them reduce the risk of investing in new projects.
The energy sector has been waiting on the federal government to announce more carbon credit offtake agreements after it signed an initial deal with Calgary-based Entropy in December.
KEY QUOTES
“Integrated waste-to-energy and Carbon Capture and Storage has significant potential to be replicated in municipalities across Canada and to put Canada in a position to export this expertise globally,” the project’s partners said in a news release.
(Reporting by Nia Williams in British Columbia; Editing by David Gregorio)