New Financing Options and Incentives for Landfill Gas Energy

Abstract

Stakeholders promoting landfill gas (LFG) energy projects are iden-
tifying new funding incentives to implement LFG energy (LFGE) proj-
ects. This article focuses on how landfills are participating in voluntary
carbon and renewable energy markets, and presents case studies from
award-winning projects that utilize these funding mechanisms.
Landfills participate in the voluntary carbon markets using one of
two main mechanisms: on an exchange or through an over-the-counter
(OTC) transaction. An exchange, such as the Chicago Climate Exchange
(CCX), is likely the most well known mechanism. At present, CCX has
35 registered landfill methane offset project providers in the United States
[1]. As of April 2008, landfill methane projects comprised approximately
9 percent of all the carbon credits issued by CCX. OTC transactions are
private between the seller, buyer, and/or broker involved in the transac-
tion. Despite their private nature, the volume of OTC traded emissions has
substantially grown in recent years according to research from Ecosystem
Marketplace [2]. Recent data from Point Carbon indicate that 132 U.S.
landfills have either made a transaction in the carbon market, or are in the
process of developing, producing, certifying, or verifying their emissions
reductions to prepare for an OTC transaction or exchange on the CCX [3].
In addition to carbon finance, LFGE projects generating electricity
are also selling renewable energy certificates (RECs). These RECs are
then purchased by companies wishing to reduce their environmental
footprint or used by utilities to comply with various renewable portfolio
standards.