2023-05-01 18:05:50
Renewable natural gas (RNG) arouses covetousness in Quebec. Already, industrial customers are purchasing them to reduce their greenhouse gas emissions. Énergir is now taking steps to sell Canadian oil companies a kind of carbon credits created with this same GNR. It expects to collect up to a billion dollars by 2030. Ottawa does not see double counting of the same reductions.
Taking off, renewable natural gas — made from organic waste, manure, sewage sludge — is greener than fossil natural gas because its combustion does not result in a net addition of CO2 in the air. In Quebec, interested customers can pay a surplus to claim this fuel.
For the past few months, various players in the Quebec energy world have each been getting coverage. Involved in the GNR ecosystem, they would like to be able to profit financially from the low carbon intensity of this fuel, which is also called “biomethane”. Discussions on this subject are underway at the Régie de l’énergie du Québec.
Énergir, which holds a virtual monopoly of gas distribution in Quebec, is one of the players who want their share of the pie. In the RNG market, this company plays an intermediary role: it buys RNG from producers, then resells it to its customers. It should be noted that it must comply with a Quebec regulation which, eventually, in 2030, will impose a fraction of 10% of RNG in its network.
The former Gaz Métro now hopes to “enhance” the environmental attributes of the RNG it distributes. Specifically, it wants to be able to sell “compliance units” — a kind of credits — to Canadian oil companies that must comply with federal clean fuel regulations.
This federal regulation, which came into effect in 2022, forces gasoline and diesel suppliers to reduce the carbon intensity of their fuels. They can, for example, blend biofuels into it, or even buy compliance units from companies that are not targeted by the regulation, such as those in the gas sector.
“We want to take these revenues and subtract them from the GNR tariff in order to reduce the tariff and make it as accessible as possible, as competitive as possible compared to electricity”, explains Vincent Pouliot, Senior Director of Markets for the carbon and energy efficiency at Énergir. Last December, the company submitted a request to this effect to the Régie de l’énergie du Québec, which regulates everything that affects energy rates in the province.
If this request is accepted by the Régie, Énergir will be able to calculate the emissions avoided thanks to its GNR, then create compliance units that it will sell to Canadian distributors of liquid fuels, which must reduce the carbon intensity of their products by 15%. by 2030. The stakes are enormous: Énergir estimates that it might collect between $595 and $997 million cumulatively by 2030.
In parallel with these steps, Quebec industries are eyeing the GNR to decarbonize. In their annual greenhouse gas (GHG) inventory, emissions associated with biomethane are essentially zero. The GNR therefore helps these large emitters to comply at a lower cost with Quebec’s cap and trade system for emission rights (SPEDE), nicknamed the “carbon market”.
Systems overlap
So that’s the crux of the matter: is there double counting of the same GHG emission reductions? Énergir asked itself this question. Questioning the ministries of the Environment of Canada and Quebec last fall, she obtained answers confirming that there will be “no issue of double counting” of the same emission reductions attributable to RNG.
“These are not two double uses,” says Mr. Pouliot. The federal system on clean fuels does not affect the GHG balance of oil companies, he argues. “Under the federal regulations, we want to create compliance units — credits, if you will — that will take absolutely nothing away from renewable natural gas in its intrinsic properties” for Quebec consumers.
Environment Canada explains, in an email to Dutythat the total emission reductions foreseen under the Clean Fuel Regulation (at least 26 million tonnes of CO2 in 2030) “have not been double counted with GHG reductions resulting from other policies”. The federal reference scenario already included forecasts of reductions attributable to the Quebec SPEDE.
Pierre-Olivier Pineau, holder of the Chair in Energy Sector Management at HEC Montréal, considers that “there is a problem in this multiplication of parallel overlapping programs”. However, he is of the opinion that, strictly speaking, there is no double counting. The professor laments that in practice, the use of GNR — an excellent thing — helps oil companies to continue to sell gasoline.
On the side of the industrial consumers of natural gas, one would especially not want that the sale of the environmental attributes of the GNR within the framework of the federal regulation strips the fuel of its ecological properties. “For now, we are reassured” by the responses obtained by Énergir from governments, says Nazim Sebaa, director of regulatory affairs at the Association of Industrial Gas Consumers (ACIG).
In fact, ACIG would like to push the logic of “upgrading” GNR even further. It wants to know the exact carbon intensity of the RNG that its members buy so that they can claim it to comply with environmental, social and governance (ESG) obligations set by their shareholders, explains Sebaa. Énergir has heard this request: it promises to provide better measurement of the environmental attributes of its RNG as of 2025 thanks to a new protocol from Environment Canada.
On the side of the Quebec Association for the Production of Renewable Energy (AQPER), we are hopeful that the discussions at the Régie de l’énergie will open the door to more advantageous feed-in tariffs for biomethane producers from here. . These tariffs should make it possible “to have economic models that can hold water”, underlines Nalini Gascon, an administrator of the AQPER.
To see in video
1682978319
#Playing #tables #renewable #natural #gas
