NSW operators of landfill gas projects are continuing to scratch their heads over whether the state government will bring an early end its greenhouse gas abatement scheme, GGas, which it commenced back in 2003. One of the first of its kind in the world, the scheme established annual state-wide targets and then required individual electricity retailers and other parties who buy or sell electricity in NSW to meet greenhouse gas reduction benchmarks.
The Independent Pricing and Regulatory Tribunal of NSW (IPART) administer the scheme, and electricity retailers who fail to meet the benchmarks face financial penalties. The scheme is legislated to continue to until 2021, however the legislation that established the scheme contains a provision that the scheme can be ended in should a national scheme be established.
When contacted by Inside Waste Weekly, neither IPART nor the NSW government Department of Trade and Industry could confirm whether the scheme would end with the commencement of the Carbon Farming Initiative (CFI) – which allows landfill owners to generate offsets via the combustion of methane from legacy waste.
Tim Sprey, manager of commercial and corporate affairs at Energy Developments - who run 83MW of landfill gas across Australia – told Inside Waste Weekly that the company was speaking with both the Federal and NSW governments, but was yet to receive a confirmation about the fate of the GGas scheme.
“What we can say is that if GGas ended, and there was not an adequate transition to the carbon price, then it does threaten the viability of landfill gas electricity generation,” Sprey said. “Our expectation is that GGas will end early – provided that we move to an emissions trading scheme.”
ALOA’s Max Spedding echoed Sprey’s position, expressing concern that under the CFI, landfill gas operators could only claim greenhouse gas offsets if their offsets could be shown to be an “additionality” to business-as-usual.
“What we want is the government to regulate so that all of those projects can transition into the carbon farming initiative directly without any consideration of additionality,” Spedding said.
He said that if GGas was to transition into the CFI without modification, he expects that “no new investment will take place, and some marginal sites will close…we have made our request for this transition clear to the government, and we are having further discussions.”
Both Sprey and Spedding also expressed concern that there was no finalised methodology for estimating emissions of landfill gas under the CFI.
