Resilient LLP (formerly DeMarco Allan LLP)
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DT Vollmer

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U.S. and China Release Sunnylands Statement Ahead of COP 28

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The United States and China announced renewed commitment to enhance cooperation to address the climate crisis in the Sunnylands Statement released on November 14, 2023 (the Statement). Both countries indicated their commitment to the effective implementation of the UNFCCC and the Paris Agreement, including the Glasgow Climate Pact and the Sharm el-Sheikh Implementation Plan, and to further the effective and sustained implementation of the U.S.-China Joint Statement Addressing the Climate Crisis and the U.S.-China Joint Glasgow Declaration on Enhancing Climate Action in the 2020s. This bulletin provides key details of the new and renewed commitments in the Statement. COP 28. The countries indicated that the consensus Global Stocktake decision expected to come out of COP 28 should, among other things: reflect that substantially more ambition and implementation on action and support will be needed to achieve the Paris Agreement’s goals; send signals with respect to the energy transition (renewable energy, coal/oil/gas), carbon sinks including forests, non-CO2 greenhouse gases (GHGs) including methane, and low-carbon technologies; encourage economy-wide 2035 Nationally Determined Contributions (NDCs) covering all GHGs; note the expectation of developed countries that the $100B climate finance goal will be met in 2023; welcome the recommendations of the Transitional Committee with respect to establishing funding arrangements to address loss and damage, including the establishment of a fund; and emphasize the important role of international cooperation. 2035 NDCs. The U.S. and China both affirmed that their 2035 NDCs under the Paris Agreement will be economy-wide, include all GHGs, and reflect emission reductions aligned with the Paris Agreement temperature goals. Energy Transition. The Statement provides important commitments related to the energy transition, including: support for the G20 Leaders Declaration to pursue efforts to triple renewable energy capacity globally by 2030 and sufficiently accelerate renewable energy deployment through 2030 from 2020 levels to accelerate the…

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Supervisory Body Publishes Recommendations for Methodologies and Removals Under Article 6.4 of the Paris Agreement

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The Article 6.4 Supervisory Body (SB) has published guidance on activities involving removals under the Article 6.4 mechanism of the Paris Agreement (the Removals Guidance). The SB also published recommendations on the requirements for the development and assessment of Article 6.4 mechanism methodologies (the Methodology Requirements). Both recommendations will be presented for consideration and adoption by the Parties to the Paris Agreement (CMA) at COP 28 starting later this month in Dubai, UAE. This bulletin highlights key information, guidance, and requirements provided by the SB in both the Removals Guidance and the Methodology Requirements. Removals Guidance Recommendation The Removals Guidance defines removals as the outcomes of processes to remove GHGs from the atmosphere through anthropogenic activities and destroy or durably store them. Requirements. The Removals Guidance provides the following requirements for activities involving removals under the Article 6.4 mechanism: Monitoring. Activity participants must monitor removals through appropriate application of quantification and estimation based on field measurements, remote sensing, measurement through instrumentation, and/or modelling. Post-crediting period monitoring, reporting, and remediation of reversals. Activity participants must undertake monitoring, reporting, verification, and remediation measures during the post-crediting monitoring period to confirm the continued existence of removals and to address any reversals of removals for which 6.4 carbon credits (6.4ERs) were issued during the active crediting period(s). The SB noted that 6.4ERs will not be issued for removals generated after the last active crediting period, including during the post-crediting monitoring period. Reporting. Activity participants must prepare monitoring reports after implementing monitoring operations and methods. These reports are to be prepared without a gap between two successive monitoring periods. The SB noted that methodologies will contain provisions specifying the minimum frequency of monitoring report submission, commensurate with the degree and nature of the risk of reversals. Accounting for removals. Removals eligible for crediting must exceed the applicable baseline determined in accordance with the Methodology Requirements and will be…

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Government of Canada Releases Fall Economic Statement: Key Energy and Climate Highlights

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Deputy Prime Minister and Minister of Finance Chrystia Freeland has released the federal government’s Fall Economic Statement 2023 (the FES). The FES sets out two areas of focus: supporting the middle class through targeted affordability, mortgage support, and price stabilization measures; and measures to support housing construction and housing affordability generally.  This bulletin outlines key energy and climate highlights from the FES: Implementation of new clean economy investment tax credits for carbon capture, utilization and storage (CCUS), clean technology adoption, clean hydrogen, clean technology manufacturing, and clean electricity. Subject to consultations, FES commits to delivering all investment tax credits in 2024. The clean economy investment tax credits would be introduced through legislation this fall in the case of CCUS and Clean Technology, and by the end of 2024 in all other cases, with projected effective dates as follows: CCUS: January 1, 2022 Clean Technology: March 28, 2023 Clean Hydrogen: March 28, 2023 Clean Technology Manufacturing: January 1, 2024 Clean Electricity: Budget 2024 for projects that did not begin construction before March 28, 2023. Expansion of the 30-per-cent Clean Technology investment tax credit. FES proposes to expand eligibility to include systems that produce electricity, heat, or both electricity and heat from waste biomass. This expansion will apply to eligible property that is acquired and becomes available for use on or after the date of the FES. Expansion of the 15-per-cent Clean Electricity investment tax credit. FES proposes to expand eligibility to include systems that produce electricity or both electricity and heat from waste biomass. This expansion will apply to eligible projects as of the date of Budget 2024, provided that construction did not begin before March 28, 2023.   Canada Growth Fund. The Canada Growth Fund (CGF) announced its first investment on October 25, 2023, with a $90 million investment in Calgary’s Eavor…

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Ontario Proposes Enabling Renewable Energy Power Purchase Agreements

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Ontario’s Ministry of Energy (the Ministry) recently proposed amendments to regulations under the Electricity Act, 1998 (the Act). The proposed amendments would amend Ontario Regulation 429/04: Adjustments Under Section 25.33 of the Act (the Regulation) to enable qualifying commercial and industrial customers to offset their facility’s demand through power purchase agreements (PPAs) with renewable generation facilities. The Regulation otherwise provides for the allocation of Global Adjustment (GA) costs to electricity customers and the rules for the Industrial Conservation Initiative (ICI). The proposed amendments follow other recent provincial support for meeting increasing corporate demand for clean and non-emitting sources of energy (see our bulletin on Ontario’s clean energy credit registry here) and the government anticipates that it will create a new market for corporate PPAs, provide system benefits, enhance industrial competitiveness in Ontario, and support new clean generation. This bulletin briefly summarizes key information regarding the proposed amendments. Overview The Ministry indicated that the proposed amendments are intended to support the growth of clean electricity generation by enabling qualifying ICI participants (Class A customers) to offset their facility’s demand in the top five peak hours of a base period through PPAs with renewable generation facilities that are not connected behind the facility’s meter. This would allow eligible ICI participants to reduce their demand during peak hours by the corresponding amount under the PPA, thereby reducing the GA charges under the ICI. The Ministry noted that contracted generation through PPAs would be treated as if it is supplied to the ICI participant behind-the-meter for the purpose of determining GA charges, similar to other “virtual” net metering arrangements. Eligible Technology The types of technologies eligible under the proposed amendments is expected to include wind, solar, small hydroelectric (i.e., less than 10 megawatts), biofuel, and battery storage. Next steps The proposed effective date for the amendments is May 1, 2024. Interested stakeholders are encouraged to review…

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SCC Finds Impact Assessment Act Largely Unconstitutional

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A majority of the Supreme Court of Canada (SCC), in a 5-2 opinion released earlier this month, found the federal Impact Assessment Act (the Act) to be unconstitutional in part and inconsistent with shared federal and provincial jurisdiction over the environment. The SCC’s conclusions in Reference re Impact Assessment Act (the Decision) are expected to have significant implications for major projects across Canada, including mines, pipelines, and other interprovincial infrastructure and activities. This bulletin briefly summarizes the key findings of the SCC and our anticipated next steps for Canada’s impact assessment and approval regime. Impact Assessment Act The Act, which received Royal Assent in 2019, seeks to provide an information gathering and regulatory scheme for certain projects and activities carried out in Canada or on federal lands so as to prevent significant environmental, health, social, or economic effects. The Act also regulates certain federal “aspects” of projects, including in respect of: Indigenous Peoples; federal lands; fish and fish habitat; aquatic species; migratory birds; changes in a province other than the one in which the activity or project is occurring; and changes in the environment outside of Canada. The Act contains two assessment components for gathering information as part of the regulatory scheme. The first portion, provided in sections 81 to 91 of the Act, deals with projects carried out or financed by federal authorities on federal lands or outside Canada and requires determining whether projects are likely to cause significant adverse environmental impacts. The second portion, which is provided in much of the rest of the Act and regulations, deals with “designated projects”, defined as physical activities carried out in Canada or on federal lands and are designated by regulations. This portion is aimed at mitigating or preventing potential adverse environmental, health, social and economic impacts arising from the activities. Overview of Opinion The opinion of…

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