Carrot and stick

Truck News

A new venture in B.C. claims to offer truckers a way to enhance their bottom lines, saving them money via reduced diesel fuel purchases while putting cash in their pockets by selling carbon offsets.

That’s the carrot, anyway. The stick, as it were, is that the trucking company has to buy equipment that allows its fleet to be monitored and mentored and, if B.C. joins the Cap and Trade wave being made currently in some jurisdictions around the world, they could even lose the capacity to make their own decision in the matter.

The ability to remove carbon is going to be a larger and larger requirement as we move forward, says George Stedeford, CEO of the Carbon Offset Aggregation Cooperative of B.C. (COAC), who likens his group to a kind of Wheat Board for carbon emissions, buying carbon offsets from companies and then selling them.

According to the Pacific Carbon Trust, a carbon offset is one metric tonne of carbon dioxide (CO2) or equivalent that is reduced or removed from the atmosphere as a result of emission-reducing (offset) activities.

What that means to a trucking company, according to the Trust’s Web site, is that, “If it cuts its carbon emissions sufficiently, through a qualifying energy efficiency initiative, it can sell those emissions savings or offsets to us. We will, in turn, offer a portfolio of offsets to clients to counter their emissions.”

You can’t just sell the offsets yourself, though. COAC basically acts as a middleman between the trucking company and the Pacific Carbon Trust, the latter of which is a B.C. Crown corporation founded to deliver made-in-B.C. greenhouse gas offsets to help clients reduce their carbon footprint and drive the growth of B.C.’s low-carbon economy.

The two organizations recently signed a five-year agreement to cover all of B.C.’s carbon offsets.

COAC CEO Stedeford describes it like this: “The truckers bring in their carbon credits, we put them in a silo and then we are able to sell them because, with a much larger volume, we can get a better price.”

The reason trucking companies can’t earn carbon offsets on their own is that, in order to qualify to sell offsets to the COAC, a company has to sign on with its program. Stedeford says it’s because there needs to be standard methods for calculating a company’s carbon emission reductions.

“The big thing about our program from a carbon standpoint is, if you don’t have approved methodologies, then the carbon offsets you claim are voluntary and can’t be validated.

“In other words, if you don’t sign up, then you’re basically on your own. And then the deck is stacked against you,” he says.

Under the COAC’s program, however, there’s a specific method of calculating baseline information and of calculating actuals. Then you relate the two against each other to get the change in your litres per kilometre tonnes. And as long as you fulfill the requirements of the methodology, then those carbon offsets will be validated.

To take advantage of COAC’s program, you sign up, your drivers are taught how to drive in a manner prescribed by the COAC to help them reduce their diesel use and, via monitoring, your emissions are validated and audited. Then, when you say “I reduced carbon emissions by ‘X,'” you’re saying it with confidence that it’s a correct number, Stedeford says.

How much money is involved? COAC board member MaryAnne Arcand, who’s also executive director of the Central Interior Loggers Association, was quoted in the Vancouver Sun as saying the offsets are valued at $12 to $13 per tonne. Or, as Stedeford puts it, “If (a company) consumes 70,000 litres of diesel a year and we can help him reduce it by 10%, then that will be about 22 tonnes in carbon offsets and currently he’d get about $240.”

That might not seem like a lot of cash back considering the work and investment involved, but, if nothing else, it could give a company bragging rights and maybe a marketing tool. On the other hand, the financial or marketing bottom line may not be the most important aspect of the program, to some. The value of fuel saved outweighs the value of the credits and it always will, Arcand told the Sun, but the social value of contributing to a cleaner environment is priceless.

As for what a trucking company has to do to comply, Stedeford says COAC provides the expertise and does all the work.

“We basically come in and do all the installation,” he says. “We do an awareness session, we put our modems in (the trucks), we capture all the data and we send reports to the company to let them know where they need to focus, which operators need a little bit of help in a certain area.”

Equipment is installed by COAC to accurately measure fuel consumption.

Stedeford says it isn’t really about the hardware, though. “Ours is a behavioural program,” he says. “So it’s just trying to work with all of the operators to be aware of changes they can make that will significantly reduce the amount of fuel that they’re burning.”

COAC’s Web site says a normal installation of their equipment into a truck and non-hydraulic lifting equipment, such as an excavator, is $4,000, including the cost of the setup itself. That’s a healthy chunk of change for a vehicle, but Stedeford says COAC can help there, too.

“We actually do the whole thing,” he says. “We come in, we put the program together, we suggest the equipment they should put into their units, we can schedule when to do it, we can even finance it, so it’s very much a win-win.”

Truckers who find the idea of selling carbon offsets attractive but who may not want to surrender their independence may find themselves out of luck.

“If someone does it all on their own, the carbon offsets won’t be available because you have to be in the program,” Stedeford says. “So while they might (reduce their emissions) they can’t sell their offsets unless it’s gone through some sort of auditing, an agreed-upon methodology. And if they haven’t, they shouldn’t be out there telling their customers that they’ve actually reduced (their emissions) by ‘X’ amount.”

It may end up being a moot point before too long, anyway, if the so-called Cap and Trade concept becomes a reality in B.C., something Stededford says is going to happen (short of a change in provincial government, perhaps).

It’s basically a carrot-and-stick approach, where the polluter pays while the seller is rewarded for being green. Stedeford says the cooperative already has a number of members across the province.

Other ways to go green
Different jurisdictions have or are pursuing ways to reduce emissions and fuel use that don’t necessarily amount to marketing what basically appear to be merely mathematical calculations (carbon offsets), but which instead help trucking companies increase their efficiency in other ways, sometimes offering government rebates to help encourage companies to become more efficient.

Alberta’s Trucks of Tomorrow program, for example, offers rebates to companies who improve fuel efficiency and reduce greenhouse gas emissions by embracing such equipment as cab heaters, auxiliary power units, and trailer skirts. Stedeford says the COAC’s system works better, however.

The government has tried plans on their own to offer rebates and the like, but they don’t catch on very well because of the paperwork and trying to figure out what you’re supposed to do for it. Besides, he says, his group offers extremely aggressive pricing, so the cost for people to get the equipment and put it in will be better than if they do it themselves. Plus, they have trained installers so companies don’t have to figure out how to get it done and whether it’s done right.

The biggest positive, Stedeford says, is that there’s money in the pocket of the trucking company. “If we can help a trucker reduce his fuel consumption by 10%,” he says, claiming that is a conservative estimate, “then for the amount of equipment we put in and our commission charge, the operator is put
ting money in the bank.

“As for COAC’s commission, if you don’t reduce fuel COAC doesn’t get anything other than for the equipment,” he says. “We take (our commission) on the fuel saved, so we bear a lot of the risk there. Not only that but, because we have the administrative ability, we can help smaller companies who can’t afford all the administrative costs of setting up that whole infrastructure to follow the required methodology.”

So is this program a money-making proposition for trucking companies faced with a tough, uncertain market, or is it a way to entice truckers into signing over their sovereignty for 30 pieces of silver? Or is it both? Only time will tell.

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