Battle Brewing Over Landfill Methane Under Climate Bill

Date: June 12, 2009

Source: News Room

The exclusion of landfill methane projects from qualifying for offset credits under the Waxman-Markey Climate bill perplexes many in the industry and is shaping up to be a major battleground. At issue is a section in H.R. 2454, "the American Clean Energy & Security Act of 2009" that lays out qualifications for GHG-offset projects. Within this section, the bill allows offset credits only for agriculture-related and "enteric fermentation" projects, and coal mine methane reduction projects under cap-and-trade program requirements. Projects that reduce other sources of methane, such as from landfills and natural gas operations, which contribute more than 10 percent of the nation's total methane emissions annually, would not qualify for offset credits. And, the bill directs EPA to promulgate new performance-based standards to limit emissions from these facilities.

An April 20 EPA analysis of the Waxman-Markey bill (www.epa.gov/climatechange/economics/pdfs/WM-Analysis.pdf) estimates that excluding such projects could increase GHG allowance prices under the cap-and-trade program by 9 percent, and would reduce the total pool of methane emissions potentially qualifying for offsets by about 45 percent.

Moreover, critics charge that the requirement that EPA adopt new "performance-based measures" to control certain methane emissions from uncapped stationary sources is premature and unwarranted.

To date, the offset credits have been an important economic incentive for developing methane projects. The importance of methane-based offset projects is almost universally acknowledged by industry and environmental groups including the Pew Charitable Trusts and the Environmental Defense Fund. However, some environmental groups, including the Natural Resources Defense Council (NRDC) argue that methane emission reductions from certain industrial sources are overdue for mandatory controls.

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