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Who buys carbon credits in Alberta?

Companies have been buying and selling carbon credits in Alberta's carbon market since 2007. But who are these companies, and why are they buying these offset credits?

Photo credit: Robert Linder on Unsplash

To start answering these questions, we're going to start by borrowing from one of the neat little resources built by our sister company, Firefly GHG Consulting. This resource is called ALBERT - the ALBerta Emission Registry Tracker - and it's updated every week with the latest activity from the Alberta carbon offset marketplace, as published on the Alberta Emission Offset Registry.

As of June 28, 2022, ALBERT shows that the total number of offset credits registered in Alberta was around 77.1 million!

Of this total, 56.7 million - or almost three-quarters - have been "retired" (this simply means that the carbon credits have been used up and cannot be used again). So, the market in Alberta is healthy, with an average of 3.96 million carbon credits being used in any given year.

But who is buying them, and why? Well, these carbon credits play a crucial role in Alberta's greenhouse gas emissions management strategy; they are used by a variety of companies to ensure compliance with Alberta's industrial greenhouse gas reduction regulation, TIER (the Technology Innovation and Emissions Reduction Regulation).

Under TIER, regulated facilities (those emitting over 100,000 t CO2e/yr) are given an emission intensity performance threshold. Essentially, they are told there is a maximum amount of greenhouse gases that they are allowed to emit for every unit of production they have (for example, tonnes of CO2e per barrel of oil or megawatt-hour of electricity).

If a site emits more than this threshold, they must come into compliance by:

  1. Paying the government a fine (known as 'buying Fund Credits') and/or

  2. Buying Emission Performance Credits (EPCs) from other regulated facilities that have reduced their emissions below the performance threshold, and/or

  3. Buying Offset Credits from non-regulated projects that have voluntarily reduced their greenhouse gas emissions.

Recent information from Alberta Environment and Parks shows that, as a proportion of their total compliance obligation, the largest users of offset credits in Alberta are chemical facilities, in-situ oil sands, gas plants, coal mines and forest products facilities. However, examining the Alberta Emission Offset Registry shows that the largest current holders of offset credits are power companies, such as Capital Power (#1), ENMAX (#4) and TransAlta (#5) and oil and gas companies, such as Canadian Natural Resources Limited (#3) and Shell (#6).

When these companies - or any other - purchase a carbon offset credit, they are paying for the offset project to reduce emissions because this is cheaper than paying the government a fine (buying 'Fund Credits').

By participating in Solar Offset, owners of micro-generation solar and/or wind power systems in Alberta can now create and sell offset credits into this active market. Large industrial sites buy these credits, and system owners get paid for making clean electricity that reduces Alberta greenhouse gas emissions. This system allows Alberta industry to stay compliant with our environmental regulations while creating lasting emission reductions, improving the payback of renewable energy systems and supporting the transition to a clean energy future.

To find out if you are eligible for Solar Offset, visit our Sign Up page.

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