- Calgary-based Gibson Energy Inc. would be Canada’s first waste-to-energy facility with carbon capture technology.
- Gibson would own 50 per cent of the project, while the Canada Growth Fund would have a 40 per cent stake.
Calgary-based Gibson Energy Inc, a publicly traded company that operates crude oil pipelines and storage terminals in North America, is developing what would be Canada’s first waste-to-energy facility with carbon capture technology, The Canadian Press report.
The company proposed using carbon capture and storage technology to create clean electricity from landfill waste. The company has become the second to secure a carbon price backstop contract through the Canada Growth Fund.
Also, 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, with the aim of ensuring that none enter the atmosphere.
Gibson said, it has reached a deal with the C$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 involve 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 offtake 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.
Furthermore proponents of carbon capture and storage, a process which is meant to trap harmful emissions from industrial processes and store them safely underground. They say these types of contracts remove some of the risk of investing in pricey emissions-reducing technology. They ensure companies will still make money even if the existing industrial carbon price structure changes.
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. In addition, companies that deploy the technology can generate carbon credits to sell to big polluters looking to offset their own emissions.