July 8, 2010

Get Cash Back for Buying a Low-Carbon Natural Gas Engine—Every Year!

by Karen Hamberg

Back in March, Westport announced the first global carbon finance program for transportation registered to the Voluntary Carbon Standard (VCS). The VCS was established to provide a rigourous, trustworthy, and innovative global standard and validation and verification program for voluntary greenhouse gas offsets. All voluntary carbon units are real, measurable, permanent, additional, conservative, independently verified, unique and transparent. By working with Grütter Consulting—the world’s leading firm linking carbon finance with clean transportation projects—the Westport Carbon Project (WCP) monetizes the emission reductions associated with Westport HD and Cummins Westport natural gas engines.
“Westport strives to offer heavy-duty vehicle engines with leading environmental performance. The WCP validates the emissions reduction benefits of natural gas engines and further supports the economic and environmental value proposition we offer to customers.” (Karen Hamberg – Director, Sustainability and Environmental Performance Westport Innovations)
Globally, the transport sector is the fastest growing emitter of carbon dioxide (CO2) emissions. Carbon finance is the mechanism by which (CO2) reductions can be sold on the carbon markets to partially finance the measures taken to reduce these emissions. The most notable or well-recognized transportation project is the Bus Rapid Transit TransMilenio in Bogota, Colombia. The TransMilenio was the first project registered under the Clean Development Mechanism (CDM) of the Kyoto Protocol and transports more than 1.8 million passengers daily through 130 kilometres of exclusive bus lanes in 1,200 articulated buses and 500 large feeder buses. The project annually reduces (CO2) emissions by 250,000 tonnes and has received more than US$100 million in carbon finance over the entire crediting period.

The two very different examples of TransMilenio (regulated under the CDM of the Kyoto Protocol) and the Westport Carbon Project (registered to the VCS for voluntary offset projects) highlight some of the challenges and opportunities associated with quantifying, validating and verifying emission reductions from mobile transport sources.

Let me speak to the Westport Carbon Project in greater detail:

The Challenge of Scale
  • The cost of establishing a carbon finance project would be prohibitive for all but the largest fleets. The structure of the WCP allows Westport HD and Cummins Westport powered vehicles sold since January 1st, 2009 to be aggregated into a larger project. Vehicles sold to fleet owners worldwide including the United States, Australia, Canada and China will be included in the WCP.
The Rigour of Validation
  • Emission reduction calculations are based on a United Nations Framework for Climate Change Convention (UNFCCC) approved methodology—in our case, AMS III.C “Emission Reductions by Low Greenhouse Gas Emitting Vehicles”. The project documentation has been validated by SQS, a Swiss entity certified by UNFCCC for the validation of climate change projects in the transport field.
  • The annual verification process will provide our customers with a third-party certified account of the greenhouse gas (GHG) emission reductions associated with their fleet operations.
Carbon Pricing in the Voluntary Market
  • The voluntary carbon market has historically offered lower prices per tonne than the regulated or compliance markets. The carbon rebate cheques sent to customers as part of the WCP may be variable year to year depending on fleet data such as mileage and fuel consumption and the carbon price per tonne on the voluntary market.
  • It is estimated that GHG reductions for a natural gas bus are about 20 tonnes per year, whereas a heavy-duty natural gas truck are about 40 tonnes per year as compared to an equivalent diesel engine.
Please contact Westport's Director of Sustainability and Environmental Performance with any questions regarding the Westport Carbon Project and watch this space and Westport's website for further updates.

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