AgCert, the Dublin-based company that trades greenhouse gas credits derived from animal waste on farms, has teamed up with US power giant AES. They are forming a joint venture that will use a technique developed by AgCert to eliminate methane gas emissions in Asia, Europe and North Africa.
AES, one of the world's biggest power companies, plans to invest $325 million (€253.1 million) in the joint venture, AES AgriVerde, over the next five years. The US company acquired more than 9 per cent of AgCert for $40 million in April. Listed on London's Alternative Investment Market (AIM), AgCert has been installing biodigestion equipment on large-scale farms throughout Central and South America, as well as Canada, to help the owners process and dispose of vast quantities of animal waste.
The process cuts emissions, generating credits which AgCert then sells to large companies and governments to help them satisfy their requirements under the Kyoto Agreement.
AES AgriVerde will install systems to capture methane gas and destroy it or use it to generate electricity or heat, cutting greenhouse gas emissions from the manure by about 95 per cent.
This reduces emissions by preventing the animal sewage from being disposed of in open lagoons, where it would otherwise decay and release large volumes of methane. The gas is 21 times more potent than carbon dioxide, according to AES.
"This methodology not only mitigates important environmental impacts, it enhances our ability to meet new power needs," said William Luraschi, executive vice-president for business development at AES . AES, which has operations in 27 countries, said in April it would invest $1 billion in wind farms, projects to cut greenhouse gas emissions, and other alternative energy sources over the next three years as oil and natural gas prices rise and as emissions are increasingly regulated.
By 2008, most countries will be required to keep greenhouse emissions at or below certain ceilings. Companies unable to meet those standards will have to pay penalties or buy credits from companies that have them to sell.
As a result, energy companies such as BP and Chevron have begun seeking ways to reduce greenhouse gas emissions and AgCert expects to benefit as this trend continues.
"The joint venture with AES allows AgCert to rapidly deploy our technologies in areas where AES has a strong presence and permits AgCert to continue to execute our strategy in all other parts of the globe," said Bill Haskell, AgCert's chief executive.
AgCert did not win regulatory approval to sell its first certified emission reductions (CERs) until April, when it could then start generating its first income. Until then, even though it had secured advance sales worth €94 million, AgCert had been unable to sell CERs until the system was ratified by the United Nations.
