November 2010
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current issue: |
November 2010 |
New Emissions Trading Scheme regulations create competitive opportunities and risks in niche areas of business. An example is landfills, which face wildly different potential levels of emissions charge as a result of Climate Change (Waste) Regulations issued in October this year.
These are the latest announcements in The Emissions Trading Scheme (ETS) roll-out starting this year and continuing until 2015.
Most businesses are not directly affected by new ETS regulations apart from wearing general cost increases. The advice for these organisations without ETS reporting obligations is simple: improve energy efficiency, minimise waste and check your forecast budgets.
On the other hand, we have recently come across niche operations such as landfills that could face big issues.
The default emissions factor for landfills is 1.1 tonnes of C02 equivalent for every tonne of waste. At the Treasury’s forecast carbon charge from 2013 of $50 per tonne of C02, a medium size landfill’s operating costs could more than double. This would not be sustainable in a competitive landfill market.
The competitive opportunity exists however to bring down the emissions charges to landfills by as much as 90% through application for a Unique Emissions Factor (UEF). To bring emissions charges down to a level competitive with other landfills will require both good gas production conditions and effective gas collection and flaring. The actual effectiveness of gas production and capture systems is therefore a key risk. The UEF can also be improved by demonstrating that a landfill’s waste composition has a lower than average emissions profile.
Use of the voluntary reporting regime to test gas management systems and likely emissions charges for the two years before full compliance and payment is required will be prudent. There are hefty penalties for getting it wrong.
Currently only 12 out of 54 landfills currently accepting municipal waste have gas capture systems. Only those facilities with effective collection systems are likely to be sustainable. As a result, we expect the new regulations will drive significant changes in the waste management sector.
Recent projects .
- Joint solid waste management operations
Working with managers of two organisations to identify options for improvement and to conduct a financial and economic assessment. - Revenue and Financing Policy
Review of funding tools for the Bay of Plenty Regional Council including options for allocatino Lake Rotorua restoration costs. - Review of the Building Act
We worked within the Department of Building and Housing on the review of the consents process, and how this was going to be delivered. The result was moves toward a streamlined process and an understanding of the realities of the system operating in both small towns and large cities
