Blue Source Wants 'Cold Cash' for Safe Disposal of Refrigerator Coolant

How times change. Until the latter part of the 20th century, there were no “frost-free” refrigerators. Instead, several times a year, the family would empty out the freezer so that the ice that had formed inside – and had begun creating an impenetrable igloo-like mass around the frozen food items – could thaw and melt.

Those who were impatient and impulsive would jab at the corners of the ice, attempting to get large slabs out of the compartment instead of allowing slow leakage. Inevitably, poking at the freezer with a hard object would pierce one of the coils that held the coolant – which was Freon-12 (R-12).

Once the coolant began seeping out, the refrigerator was no better than a metal packing crate. It had to be replaced.

Much to our dismay, my college roommates and I made our acquaintance with Freon in this way. We hated the stuff that was leaking out of our refrigerator, because we knew it would cost us lots of money to replace. We had no idea at the time that it would also harm the ozone layer of the atmosphere. That was proven about 20 years later, in 1994, when Freon-12 (R-12) was identified as a greenhouse gas – and was banned from use.

The less-harmful replacement, R134a (tetrafluoroethane), has only been in common use since then; R-12 still is found in many older systems today.

Not only is R-12 now considered an environmental hazard, but soon it will be possible to make money on the emerging carbon market from the very material that emptied our bank accounts just a few years ago. 

(PHOTO: EPA estimates that 9 million refrigerators and freezers, 4.5 million window air-conditioning units, and 800 thousand dehumidifiers were disposed of in the United States in 2009. Photo courtesy of EPA.)

Carbon credits

On June 25, Calgary-based project developer Blue Source (News - Alert) Canada had become the first company ever to receive carbon credits for destroying emissions of ozone-depleting substances (ODS) in old refrigerators. The company hopes it will be permitted to use the emission offsets in Quebec's emerging carbon market.

Known as Baseline Emissions Management Inc. until 2008, Blue Source Canada is now one of Canada’s most coveted marketers of greenhouse gas (GHG) emission offsets and renewable electricity certificates (REC). Blue Source is working with The Mississauga, Ontario-based not-for profit Refrigerant Management Canada (RMC) program, the Canadian industry solution for refrigerant waste disposal. It is an environmental care program that brings together contractors, wholesalers and collection service providers committed to the responsible disposal of surplus ozone depleting (ODS) refrigerants.

To date, Blue Source Canada has been issued 170,000 credits from the Toronto-based Canadian Standards Association. The project could be scaled up to produce 850,000 credits per year.

Québec Establishes a Carbon Market

Québec positioned itself as a pioneer along with the State of California in the United States by announcing in December 2011 that it planned to implement a GHG emission cap-and-trade system, which will lead to the emergence of a new carbon market in North America under the Western Climate Initiative (WCI).

The GHG emission cap-and-trade system will support the attainment of emission reduction objectives by setting an annual cap on total emissions. The cap will be lowered gradually in order to achieve the target set for 2020. With the establishment of this system, businesses will have to possess GHG emission allowances that will be distributed through free allotments, auctions or a combination of both.

The most efficient businesses that reduce their emissions below their allowances may sell the surplus on the carbon market, which will allow them to wholly or partially recover the cost of their investments. Conversely, businesses producing GHG emissions that exceed the allowances allocated to them must invest to reduce their emissions. Otherwise, they will have to purchase rights at government auctions or on the carbon market.

In Québec, the GHG emission cap-and-trade system will be phased in during two phases, requiring coverage of emissions from:

• Major industrial emitters and GHG emissions from the electricity generation sector starting in 2013
• The combustion of fuel and fossil fuels used in the transportation and building sectors starting in 2015.

In California, the offsets cannot currently be used by companies with targets under California and Quebec's carbon markets, to be launched next year, but developers will be lobbying for Canadian regulators to change the rules, in a move that could increase available offset supply for emitters and increase the value of the offsets.

"It is definitely our hope that we will find a path to the regulated markets for this project given that it is a significant source of credits," said Yvan Champagne, president of Blue Source Canada.

California’s Offset Rules

He said only minor modifications would be needed to be made to California's offset rules for the project to be allowed to be used in the state's carbon market. If California accepts the project, Quebec's covered businesses would also be able to use the credits to comply with their program, since both governments are expected to link their markets later this year.

Quebec is still finalizing its own offset eligibility rules but draft regulations would not allow ODS (ozone-depleting substances) credits from refrigerators under current rules. The province has a 60-day comment period for stakeholders to give their views on the draft.

According to analysts, California and Quebec will allow covered entities to use offsets to meet 8 percent of their compliance obligation, creating demand for about 28.5 million credits over the first two years of the program from 2013.