Landfills won't close early due to emissions trading, but the initial methodology for calculating their emissions could be inaccurate by as much as 50% – equivalent to a $2 million-to-$3 million variation in annual carbon liabilities for a large landfill, according to Max Spedding, secretary of the Australian Landfill Owners Association.
Spedding said claims that some landfills could close ahead of the start of the trading scheme (see related article) were mistaken, as white paper rules mean that landfills closing between now and mid-2010 would not escape some liability for waste currently being placed in them.
The Department of Climate Change "very wisely has already shut the gate" on the potential loophole of early closure, he said.
Results could be out by up to 50%
However, Spedding said landfill
owners do have concerns about accurately modelling landfill emissions and
about their partial liability for wastes already going to their landfills.
Landfill operators will initially need to estimate their emissions using a modelling method that Spedding said could potentially deviate from actual emission levels by as much as 50%.
At a price of $20 per tonne of carbon that could equate to a variation of between $2 million and $3 million a year in permit liabilities for the operator of a large landfill, he said.
An alternative modelling method was likely to be more accurate, reducing levels of inaccuracy to plus or minus 20%, but the Department of Climate Change had yet to finalise that methodology and it would take landfills a year to calculate emissions using it.
That means even if the method was finalised by May, the earliest that landfill owners could hope to complete their estimates would be in the month preceding the start of the scheme, he said.
Despite these concerns, Spedding said landfill owners were confident that the department's reporting team was working to resolve the issues in collaboration with the industry.
The landfill industry, both in Australia and overseas, was also "working aggressively" to come up with a much more precise method involving direct measurement, he said.
Spedding rejected the claim that the two modelling methods were open to abuse because they rest partially on representative sampling and an unscrupulous operator could sample only in a low-emission zone.
The sampling must involve measurements in the piping of landfill gas collection systems, as well as measurement of gas emitted through the landfill cap, he said. The sampling also has to be repeatable and might have to be carried out in more than one zone.
Spedding said the industry
believed white paper rules – which mean landfills that will be covered by
the scheme are already incurring some liability for wastes being deposited
there – would create "a fiscal nightmare".
The industry should only incur liabilities for wastes deposited after the start of the scheme, he said.
Spedding said there was a great deal of uncertainty in the industry about the ramifications of the trading scheme.
About a dozen of Australia's 540 landfills were sure that they would have obligations under it, he said.
But another 80 to 100 of Australia's 540 landfills could potentially be covered by it, he said.
Spedding said it was important that the imposition of trading scheme obligations on larger landfills be accompanied by tighter regulation and the enforcement of landfill gas capture requirements on smaller landfills.
The ALOA and the Waste Management Association of Australia will meet with the Department of Climate Change in Canberra next Wednesday.