Helping reduce the carbon burden

WHILE talks to implement the Kyoto Protocol broke down last year over disagreement on carbon reduction processes and trading, governments and companies have remained busy developing projects, policies and programs to reduce greenhouse gas emissions.

Resource companies, large energy consumers which release greenhouse gases during production processes or produce fuels that release these gases when used, are among those participating in climate control.

These companies are reducing their emissions: in part to comply with actual or foreshadowed regulatory policy; to take advantage of tax incentives; to green their corporate image with investors and local communities; or to use energy more efficiently.

Many resource companies have voluntarily joined the Federal Government’s Greenhouse Office programs, but maintaining an economic balance while addressing emissions reductions remains an issue for the industry. Implementing and administering new energy, production and emissions systems is costly and can reduce a company’s focus on competitiveness. But it is international competitiveness that attracts the most investment in the resources world.

“There is no evidence that anything can or will replace coal, petroleum and natural gas as the major energy sources in the foreseeable future,” Australian Aluminium Council executive director David Coutts said.

One of Australias’ largest export industries, the aluminium sector risked impeding expansion by implementing new production and emissions systems, he said.

“Increasing the proportion of electricity generated from renewable energy is a laudable objective, but economic reality must be kept in view,” David Coutts said.

WA businesses with an entrepreneurial nose have sniffed the opportunities and are touting projects to carbon-emitting companies, claiming these could provide immediate carbon credits once Kyoto Protocol trading begins.

Companies selling the projects have pre-empted regulatory control, promoting the public relations, commercial, land rehabilitation, biodiversity and community benefits of such schemes.

No rules or guidelines have yet been established for the assessment and assignment of carbon credits, or for any trade in emission permit and carbon credits. One reason is that standardised scientifically valid and consistent measuring processes for carbon storage over a period of time, for example, in a reafforestation project, are virtually non-existent.

Nonetheless, governments are likely to be deemed the regulators of any trading and the WA Government, sensing some urgency, is inquiring into recognising carbon rights and regulating their trade.

Following the lead of other state governments, WA is hoping to develop carbon rights legislation. The Department of Environmental Protection said companies then could convert carbon rights to carbon credit currency once an international trading agreement was ratified and the federal Government had established an emissions permit system.

Notre Dame professor of environmental management Syd Shea agrees with all developments.

“Regardless of the current political situation, it’s obvious something is going to have to be done,” Dr Shea said.

He said legislation was essential, but must be kept simple, in the absence of international policy. Alcoa corporate relations manager Brian Wills-Johnson said the company had assessed several carbon trading schemes, including commercial forestry operations and renewable energy options in terms of forest waste, but had so far rejected all proposals.

“We’ve decided not to take a speculative risk yet,” he said.

Mr Wills-Johnson said using Alcoa’s landcare program for potential credits was not worth the accounting problems involved at present, particularly since operational strategies had held Alcoa’s emissions at 1990 levels despite increasing alumina production by 41 per cent and aluminium by two per cent.

He said there almost always was a technological answer to problems, and Alcoa was ahead of the pack in developing and testing a non-carbon anode to eliminate carbon emissions from the smelting process.

“If testing in Italy shows it will work as we think, almost the only greenhouse gases from the smelting process will be from power generation,” Mr Wills-Johnson said.

The resources industry view appears to be that more efficient use of conventional fuels in the medium term will satisfy climate control concerns until economically viable alternatives are available in sufficient supply and in all regions and climates.

Woodside Petroleum is one company taking that position, investing in both new applications for natural gas and in the commercial development of sustainable energy projects.

Woodside’s subsidiary Metasource has invested US$3 million in a wavepower generation company and A$5 million in a CSIRO company developing ceramic fuel cells and is supporting research into using natural gas hydrates as a transport fuel.

And like the Oil Company of Australia and Carbon Credits International, Metasource is said to be promoting projects to other resources companies as potential carbon credit generators.

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