Alberta waste project secures support

Deal with Canada Growth Fund will help accelerate development of conversion facility

This article was written by Amanda Stephenson and was published in the Toronto Star on June 12, 2024.

A company proposing to use carbon capture and storage technology to create clean electricity from landfill waste has become the second to secure a carbon price backstop contract through the Canada Growth Fund.

Calgary-based Gibson Energy Inc., a publicly traded company that operates crude oil pipelines and crude oil storage terminals in North America, is developing what would be Canada’s first waste-toenergy facility with carbon capture technology.

The Alberta facility would divert solid waste otherwise headed to the City of Edmonton’s landfill and incinerate it to create electricity. Carbon capture technology at the site would trap the greenhouse gas emissions produced as part of the process, ensuring none enter the atmosphere.

Gibson said Tuesday it has reached a deal with the $15-billion federal Canada Growth Fund that will help it accelerate the development of the project.

Under the terms of the deal, Gibson would own 50 per cent of the project, while the Canada Growth Fund would have a 40 per cent stake.

Varme Energy, the Canadian subsidiary of Norwegian-based Varme Energy AS, will be involved in the development and construction of the project and will own the remaining 10 per cent stake.

Included in the deal is a carbon price assurance mechanism through which the Canada Growth Fund commits to purchasing 200,000 tonnes per year of carbon credits generated by the project at an initial price of $85 per tonne for a 15-year term.

This type of carbon off-take agreement, sometimes referred to as a carbon contract for difference, essentially guarantees that if the price of carbon falls below a certain level in the future, the Canada Growth Fund will pay the difference.

Proponents of carbon capture and storage, a process that traps harmful emissions from industrial processes and stores them safely underground, say these types of contracts remove some of the risk of investing in pricey emissions-reducing technology. They ensure companies will still be able to make money even if the existing industrial carbon price structure changes or is eliminated.

This is because captured carbon doesn’t have any value on its own as a product, but can lower a company’s own carbon tax expenses by reducing its overall emissions.

The Canada Growth Fund, which was created in late 2022 by the federal government to help reduce the risk private investors assume when they invest in new technologies, has received approximately 100 proposals from companies exploring decarbonization projects.

The Gibson Energy project is the fund’s fourth investment and the second project to be awarded a carbon contract for difference.

Proponents of carbon capture and storage say these types of contracts remove some of the risk of investing in pricey emissions reducing technology

Author: Ray Nakano

Ray is a retired, third generation Japanese Canadian born and raised in Hamilton, Ontario. He resides in Toronto where he worked for the Ontario Government for 28 years. Ray was ordained by Thich Nhat Hanh in 2011 and practises in the Plum Village tradition, supporting sanghas in their mindfulness practice. Ray is very concerned about our climate crisis. He has been actively involved with the ClimateFast group (https://climatefast.ca) for the past 5 years. He works to bring awareness of our climate crisis to others and motivate them to take action. He has created the myclimatechange.home.blog website, for tracking climate-related news articles, reports, and organizations. He has created mobilizecanada.ca to focus on what you can do to address the climate crisis. He is always looking for opportunities to reach out to communities, politicians, and governments to communicate about our climate crisis and what we need to do. He says: “Our world is in dire straits. We have to bend the curve on our heat-trapping pollutants in the next few years if we hope to avoid the most serious impacts of human-caused global warming. Doing nothing is not an option. We must do everything we can to create a livable future for our children, our grandchildren, and all future generations.”