Environment and Climate Change Canada (ECCC) has published the Reducing Greenhouse Gas Emissions from Refrigeration Systems, Version 1.0 protocol (the Refrigeration Protocol). ECCC also published a new version of the Landfill Methane Recovery and Destruction, Version 1.1 protocol which was first published on June 8, 2022. The Refrigeration Protocol supports Canada’s commitments to phase down hydrofluorocarbons (HFCs) under the Kigali Amendment to the Montreal Protocol, wherein developed countries agreed to gradually phase down HFCs starting in 2019 to 15% of calculated baseline levels by 2036. This bulletin briefly summarizes the Refrigeration Protocol and provides important updates on protocol development under Canada’s Greenhouse Gas (GHG) Offset Credit System.
The Refrigeration Protocol
Eligible projects under the Refrigeration Protocol may register in Canada’s GHG Offset Credit System if the following conditions are met:
- Location. The project must be located in a province or territory in Canada.
- Additionality. GHG emission reductions generated by the project must not already be incentivized by carbon pricing and must not occur as a result of federal, provincial or territorial regulations or where a project proponent is required to retrofit or replace a pre-existing refrigeration system or its refrigerant.
- Baseline conditions. The system used in the baseline scenario must be either a stand-alone medium- or low-temperature refrigeration system, centralized refrigeration system, condensing unit, chiller, commercial air conditioning system or a heat pump. Pre-existing refrigeration systems must be operating for a minimum of three years prior to the project start date.
- Eligible project activities. The proponent can retrofit a pre-existing refrigeration system to use an eligible refrigerant, install a new refrigeration system containing an eligible refrigerant, and if applicable, destroy HFCs contained in refrigerant taken out of a pre-existing refrigeration system.
- Eligible refrigerant. The refrigerant used in the project scenario must have a global warming potential (GWP) lower than values provided in the protocol or, if lower, the relevant GWP limit imposed by the province or territory in which the project site is located. Eligible refrigerant GWP must be lower than a pre-existing refrigeration system’s refrigerant GWP, if one exists.
- Project start date. The first day that a retrofitted or newly installed refrigeration system provides cooling to the project site must be on or after January 1, 2017.
ECCC also noted the following other key requirements for the Refrigeration Protocol:
- Unique. GHG emission reductions must be unique, i.e., credits cannot be issued for the same reductions under another offset system, program or other GHG crediting mechanism.
- Exclusive entitlement. A project proponent must have exclusive entitlement to claim the credits issued for the GHG emission reductions generated by the project.
- Project aggregation. Projects can be aggregated, but they must be located in the same province or territory.
- Environmental integrity account. Three percent of offset credits generated by a project are deposited in the environmental integrity account.
- Duration and additionality. Projects can generate credits for 10 years with no opportunity for renewal; however, credit issuance stops if the GHG emission reductions become required by law.
Interested stakeholders are encouraged to register for a public webinar providing a high-level overview of the Refrigeration Protocol on March 16, 2023.
Protocols Under Development
Updates regarding other protocols under development by ECCC for the GHG Offset Credit System include:
- Anerobic Digestion. ECCC indicated that development of the Anaerobic Digestionprotocol will be initiated in spring 2023. Stakeholders with significant technical and/or scientific expertise interested in supporting the development of the Anaerobic Digestion protocol are encouraged to submit their candidacy packages for the Technical Expert Teams by April 30, 2023.
- Improved Forest Management (IFM) on Private Lands. We understand that ECCC has set a spring 2023 target for the release of the IFM on private lands protocol. ECCC has also conducted consultations on Indigenous participation and protocol development for the IFM on Crown and Public Lands protocol, which we expect to be developed and published at a later date.
- Livestock Feed Management and Enhanced Soil Organic Carbon. We expect draft protocols and consultations for both the Livestock Feed Management protocol and Soil Organic Carbon protocol to occur in late summer 2023.
- Direct Air Carbon Dioxide Capture (DAC) and Sequestration. We expect ECCC to consult on the DAC and Sequestration protocol over the coming months, likely in early fall 2023.
Indigenous Participation
ECCC also recently published the GHG Offset Toolkit (the Toolkit) into two additional Indigenous languages. The Toolkit is now available in Ojibwe, Mi’kmaq, and Woods Cree, and provides information and resources related to carbon markets, the elements and requirements of offset systems, and considerations when developing offset projects. ECCC has indicated that it intends to develop workshops for Indigenous organizations and communities to support project development and participation by Indigenous Peoples.
For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.
