TransAlta Corporation

TransAlta is Canada's largest non-regulated power generator, with operations in Canada, the USA, Australia and Mexico. Based in Alberta, its core business is burning coal to generate electricity. Not surprisingly, this makes it Canada's second-largest single producer of carbon dioxide (CO2) emissions. It contributes around six percent of Canada's total greenhouse gas emissions.

In 2001, TransAlta owned 9,000 megawatts of generating capacity, and $7 billion worth of assets. The group recorded annual earnings of $170 million.

In March 2000, TransAlta announced an ambitious plan to cut CO2 emissions from its Canadian plants - which represent the largest slice of its operations - to zero. However, the route it will take to achieve this impressive target owes as much to accounting as it does to technological innovation.

'We can reduce our net emissions to zero by using the flexibility mechanisms of the Kyoto Protocol,' explains Dr Bob Page, TransAlta's vice president of sustainable development. 'This is a groundbreaking proposal.'

Part of the company's plan, which has a target year of 2024, envisages a shift to renewable energy. This will displace some of the older coal-burning capacity currently in place. In addition, clean-burn techniques - such as burning coal in oxygen instead of air - could help to lower the CO2 output per unit of electricity generated.

But the majority of the reduction will be associated not with reduced emissions from TransAlta plant themselves, but will instead be the result of  'offsets' and emissions trading.

Offsets are actions taken outside the company's normal operation which reduce or absorb CO2 emissions. An example is tree-planting, to increase the rate of absorption of CO2 from the atmosphere.

Emissions trading, as its name suggests, is the buying and selling of CO2 emission 'rights' between organizations. A heavily-polluting company which was reluctant to invest in cleaner technology might instead opt to buy emission rights from a 'cleaner' organization.

In the case of TransAlta, a major offset project that was announced in 2000 was the 'Uganda cattle feed project', which is using a feed supplement to reduce methane emissions from cattle. Methane is around 20 times more potent than CO2 as a greenhouse gas, and is measured in terms of 'CO2 equivalent' when calculating offsets.

TransAlta is also involved in a Canadian offset programme known as the Saskatchewan Soil Enhancement Project. This is encouraging farmers to reduce tillage and hence to lower CO2 emissions from the soil. The scheme is expected to store more than 200,000 tonnes of carbon a year in the soil.

The company has also been at the forefront of emissions trading. In 2000 it completed the first trans-
Atlantic emissions trade with a German power firm, Hamburg Electric, which has invested in wind turbine capacity. In a subsequent deal, it bought 210,000 tonnes worth of emission rights from the US oil company Murphy Oil.

(Under the Kyoto rules, a company's entitlement to purchase emission rights is related to its historical level of emissions - a principle known as 'grandfathering'.)

The difference between 'gross' and 'net' CO2 emissions can be dramatic. For example, TransAlta's sustainable development annual report for 2000 indicates that its Canadian greenhouse gas emissions , measured in terms of CO2 equivalent, fell by 18% during the period 1990-2000. However, 'gross' emissions - before offsets and trades were taken into account - were actually 7% higher.

TransAlta's 'zero emissions' strategy up to the year 2024 involves using offsets to reduce emissions from its coal-fired plant. Any new power stations it commissions will be fully offset by CO2 mitigation measures elsewhere.

Alongside these balance-sheet exercises, TransAlta is also moving into the field of renewable energy, albeit on a modest scale. In August 2000 it announced a $5 million investment in Vision Quest Windelectric of Calgary, followed in February 2001 by a second $5m investment. The money has been used to help finance the purchase and installation of 60 wind turbines, with a combined capacity of 40 megawatts.

However, TransAlta makes no apology for continuing to develop coal-burning capacity. In 2000, the company was a co-founder of the Canadian Clean Power Coalition, an industry group formed to research and develop less polluting ways of burning coal for electricity.

The company's endorsement of sustainable development principles has earned it a place in the Dow Jones Sustainability Indexes. TransAlta is also a participant in the Canadian 'Voluntary Challenge and Registry'(VCR) programme, in which businesses commit themselves to a greenhouse gas reduction plan.

In addition, it was one of the founder members of the World Business Council for Sustainable Development.

Click here to download a copy of TransAlta's 'Blueprint for Sustainable Thermal Power Generation' in PDF format.