The Ontario Ministry of the Environment, Conservation and Parks (MECP) has announced proposed amendments to the Emissions Performance Standards program (EPS) under the Environmental Protection Act (read our earlier bulletin on the EPS here). The proposed amendments announced yesterday do not include changes to the EPS to allow for the use of carbon offsets for the purposes of compliance. This bulletin briefly summarizes the proposed amendments, which are in three key areas:
Supporting a partial year coverage of emissions. MECP is proposing the following amendments in support of partial year coverage, including calculations that facilities are to use for determining the following prorated amounts:
- -Verification amount (emissions);
- -Production parameters;
- -Emissions limits.
In addition, these amounts will be used to determine the:
- -facility’s compliance obligation (equal to the amount that emissions are higher than the facility’s emissions limit), or
- -number of emissions performance units (EPUs) to be distributed to the facility’s account (equal to the amount that emissions are lower than the facility’s emissions limit).
Treatment of new facilities. MECP is proposing to align the EPS with federal policy for the registration of new facilities. To be eligible, new facilities must:
- -be engaged in an industrial activity identified in Schedule 2 of the EPS regulation (which sets out various activities that are covered by the regulation); and
- -provide estimates that demonstrate the facility is projected to emit at least 10,000 tonnes of carbon dioxide equivalent (CO2e) or more per year in any of the three calendar years from the date of first production.
Other administrative, technical and clarifying amendments. MECP is proposing the following amendments to support compliance, enforcement and administration of the EPS and support the transition from the federal Output-Based Pricing System (read our earlier bulletin on the transition announcement here), including:
- -clarifying rules for transferring compliance instruments;
- -aligning the performance standard for electricity generation with the federal OBPSstandard “to provide greater stability and reduce administrative complexity in the electricity market” (adjusting the Ontario performance standard for all fossil fuel-fired electricity generation from 420 to 370 CO2e/GWh and aligning the Ontario performance standard for compliance year 2022 with what is in effect for 2019 to 2021 under the federal OBPS);
- -clarifying how the GHG Emissions Performance Standards and Methodology for the Determination of the Total Annual Emissions Limit is applied to cogeneration systems, to ensure cogeneration limits are determined using total energy output and a standard based on an 80 percent efficient cogeneration system;
- -adjusting the specific intensity method for certain facilities to clarify requirements, address technical errors, and reflect significant changes in operations or ownership;
- -clarifying reporting requirements for multi-site facilities to maintain alignment with reporting under the federal greenhouse gas reporting program (GHGRP) and to support the implementation of the EPS (e.g., specifying the site-level reporting requirements for these facilities in addition to the facility totals that are already required to be reported under the Greenhouse Gas Emissions: Quantification, Reporting and Verification regulation (the Reporting Regulation);
- -adding definition for EPS facility in the EPS regulation to align with the OBPS definition, where the facility is operated in an integrated way to carry out an industrial activity;
- -fine-tuning material discrepancy assessments under the Reporting Regulation to align with federal requirements;
- -applying the above thresholds for material discrepancies as the basis for determining when a revised GHG emissions report is required to be submitted;
- -clarifying verification rules; and
- -providing for any additional administrative amendments that may be needed to transition from the federal OBPS to Ontario’s EPS based on ongoing discussions with the federal government.
MECP is seeking comments from interested stakeholders on the proposed amendments. Comments may be submitted until July 11, 2021.