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OCR for page 10
10 The Carbon Market: A Primer for Airports
sponsors face is the identification and prioritization of projects that should be accelerated based
on their energy and GHG benefits. To this point, many airport sponsors that have tackled GHG
emissions have been rewarded with reduced operating costs through avoided energy consump-
tion. Very few airport sponsors have capitalized further by seeking potential revenue streams
from facilitating offset projects at airport facilities. There are multiple reasons for this, including
the following:
· Many of the activities and investments that airports engage in that reduce carbon emissions,
such as improving energy efficiency, are not typically the type for which salable offset credits
will be created.
· Carbon markets in the United States have been slow to develop, and identifying projects that
would provide additional revenue can be challenging.
· Airport revenues are regulated, and this could potentially limit some opportunities for offset
credit monetization. Specifically, airport sponsors are required to use airport revenue only for
"the capital and operating costs of the airport, the local airport system, or other local facilities
owned or operated by the airport sponsor and which are directly and substantially related to
the air transportation of passengers or property." This is something that would need further
interpretation by the FAA on a case-by-case basis.
· Airport safety issues and regulations can impact applicability of certain carbon reduction proj-
ects at or near airport properties.
· Finally, because these markets are new, evolving, and complex, there is a lack of awareness of
the market potential by airport sponsors.
To date there have been limited examples of airports hosting projects that have been credited
with tradable offset credits. However, there are examples of airport projects which could be eli-
gible to earn other forms of environmental credits--like renewable energy certificates (RECs)
from renewable energy projects and airport emission reduction credits. These instruments will
be explained later in the Primer. Table 3 is a review of some past airport projects and the type of
environmental instrument likely to be associated with that project.
1.4 Airport Constraints as Related to Carbon Credits
and Other Revenue Opportunities
Key Takeaways for Airports
· Restrictions on the use of airport revenue, including federal law and grant assur-
ances, must be considered when assessing the feasibility of a carbon project.
· Land use restrictions at airports have the potential to impact the viability of cer-
tain offset projects that may encumber air or land space.
This Primer will address a variety of project types that could potentially be implemented at air-
ports in order to generate offset credits or other tradable environmental credits. Airports are
unique entities with certain constraints on how capital can be spent in order to pursue revenue
opportunities. These constraints should be considered at the outset by airports when consider-
ing a potential carbon, renewable, or other project type.
At the federal level, the use of airport revenue is regulated by federal statutes and policies,
including AIP grant assurances. Both federal law and the grant assurances strictly prohibit the use
OCR for page 11
Introduction and Background 11
Table 3. Examples of projects at airports and associated environmental market instrument.
Applicable
Project
Airport Project Description Project Outcome Environmental
Type
Instrument
Portland Geothermal HVAC system (120 wells) REC production, carbon RECs
International for new terminal; low- reductions through
Jetport, ME temp/low energy radiant renewable energy
floor. generation and waste
reduction; the system is
expected to reduce oil
used for the new terminal
by 90%--nearly 102,000
gallons a year (Turkel
2010).
Albuquerque Solar Solar PV project (600 kW Solar REC production, Solar RECs
International system). savings of over $65,000
Sunport, NM per year; eliminated CO2
emissions equivalent to
14,547 gallons of
gasoline consumption
each year (Whitson n.d.).
General Wind 100,000 kW produced REC production, turbines RECs
Edward annually by 20 small urban will generate over
Lawrence turbines; partnered with 100,000 kilowatt
Logan AeroVironment. hours of annual
International electricity, reducing
Airport, MA carbon emissions by
97,500 pounds (Energy
Groom n.d.).
Los Angeles Organic Electricity is generated from REC generation, carbon RECs, possibly
International Waste methane gas, which is reductions through offset credits
Airport, CA Composting produced from 8,000 renewable energy
tonnes of food waste per generation and clean
year. waste removal.
Philadelphia Electric Electric baggage tractors AERC generation, avoids AERCs
International Ground and electric belt loaders over 500 tons of ozone
Airport Service replace their traditionally precursor over the life of
Equipment fueled counterparts. the project.
Gerald R. Gate Power/ Preconditioned air and AERC generation, avoids AERCs
Ford PCA ground power converter over 100 tons of ozone
International units avoid the use of APUs precursor over the life of
Airport at the gate. the project.
of airport revenue for non-airport and non-revenue producing projects by all public and private
airport sponsors that have received federal assistance. Specifically, airport sponsors are required
to use airport revenue only for "the capital and operating costs of the airport, the local airport
system, or other local facilities owned or operated by the airport sponsor and which are directly
and substantially related to the air transportation of passengers or property."
This discussion of airport constraints is, consistent with the purpose of the Primer, focused on
revenue opportunities related to carbon credits. Accordingly, initiatives that are purely cost-
additive to airport sponsors--including the purchase of green power, RECs, and offset credits--
are not discussed. Such purchases are, however, an area of interest to be explored in ACRP
Project 11-01 (Topic 03-05), "Analyses of State and Federal Regulations that May Impede State
Initiatives to Reduce an Airport's Carbon Footprint." There are reported examples of such pur-
chases at Los Angeles (DOE n.d.b), Dallas/Fort Worth (Green Power Partner 2010), and Portland
(EPA & DOE 2010) international airports.
