SAN FRANCISCO, June 25 (Reuters Point Carbon) - Project developer Blue Source Canada has become the first company to receive carbon credits for destroying emissions of ozone depleting substances in old refrigerators, units the developer hopes will be allowed to be used in Quebec's emerging carbon market.
A partnership between industry group Refrigerant Management Canada (RMC) and developer Blue Source Canada has been issued 170,000 credits under the Canadian Standards Association, the companies said Friday.
The project could be scaled up to produce 850,000 credits per year.
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.
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 also would 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 credits from refrigerators under current rules.
The province has a 60-day comment period open for stakeholders to give their views on the draft.
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, according to analysts.
Reporting by Rory Carroll