The Government of Ontario has released O. Reg. 241/19 Greenhouse Gas Emissions Performance Standards (the Regulation), which came into effect on July 4, 2019 following an unexpected process surrounding the release of the Regulation. The Province published a regulatory proposal for industrial emission performance standards (EPS) in February 2019.
Compliance. The first compliance period under the Regulation would begin on January 1 in the year in which Ontario is removed from the list of provinces to which the federal Output-Based Pricing System applies. The Regulation provides that:
Compliance instruments include excess emissions units (EEUs) and emissions performance units (EPUs), each of which are subject to eligibility requirements if they are used to satisfy a facility’s compliance obligation.
EEUs must be distributed to facilities beginning in the first year after the first compliance period. The cost of each EEU is set at $20 in 2020, $30 in 2021, $40 in 2022, and $50 in 2023.
EPUs must be distributed in the year after a compliance period to facilities for which the verified total annual emissions limit for the compliance period is more than the verified verification amount for the compliance period (unless the Historical Facility Emissions Limit Standard is used). EPUs expire after five years.
Eligible compliance instruments must generally be removed from a facility’s account at the end of a compliance period, with EEUs to be removed before any EPUs are removed.
EPUs may be transferred between facilities’ accounts by agreement if notice is provided.
Registration. The Regulation further provides for mandatory registration of facilities that report or have reported emissions of at least 50,000 tonnes of CO2e per year under current or prior regulations. Voluntary registration may be available for facilities that report or have reported emissions of at least 10,000 and less than 50,000 tonnes of CO2e per year.
Facilities are required to determine their total annual emissions limit for each compliance period, in accordance with the “GHG Emissions PerformanceStandards and Methodology for the Determination of the Total Annual Emissions Limit”.
Ontario has concurrently made changes to the regulatory framework for quantifying, reporting and verifying GHG emissions. O. Reg. 242/19 Greenhouse Gas Emissions: Quantification, Reporting and Verification, which also came into effect on July 4, 2019, amends O. Reg. 390/18. The related Ministry guideline for quantification, reporting and verification of GHG emissions was also amended.
Special thanks to Evan Walman for his assistance in preparing this bulletin.