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Federal Government Releases 2023 Budget Long on Clean Economy Investment

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Deputy Prime Minister and Minister of Finance Chrystia Freeland today released Budget 2023: A Made-in-Canada Plan (Budget 2023). Resilient’s bulletin outlines key climate, energy, and Indigenous highlights from Budget 2023.   Clean Electricity, Clean Economy Budget 2023 introduces “Canada’s Plan for a Clean Economy” (the Clean Economy Plan) with the following priorities: electrification; clean energy; clean manufacturing; emissions reduction; critical minerals; infrastructure; electric vehicles and batteries; and major projects. The Clean Economy Plan is centred on three tiers of federal financial incentives: (i) an anchor regime of clear and predictable investment tax credits; (ii) low-cost strategic financing; and (iii) targeted investments and programming to respond to the unique needs of sectors or projects of national economic significance.   Clean Electricity. Budget 2023 notes that Canada’s electricity demand is expected to double by 2050 and will require electricity capacity to increase by 2.2 to 3.4 times compared to current levels and proposes the following new funding and investments to support clean electricity in Canada: Canada Infrastructure Bank (CIB) will invest at least $10B through its Clean Power priority area, and at least $10B through its Green Infrastructure priority area, at least $20B to support the building of major clean electricity and clean growth infrastructure projects; $3B over 13 years to Natural Resources Canada to: Recapitalize funding for the Smart Renewables and Electrification Pathways Program to support critical regional priorities and Indigenous-led projects, and add transmission projects to the program’s eligibility; Renew the Smart Grid program to continue to support electricity grid innovation; and Create new investments in science-based activities to help capitalize on Canada’s offshore wind potential, particularly off the coasts of Nova Scotia and Newfoundland and Labrador. funding to advance the Atlantic Loop and support ongoing negotiations with provinces and utilities to identify a clear path to deliver the project by 2030. Clean Economy. Budget 2023 proposes the following new funding and support for…

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Ontario Proposes Changes to Emissions Performance Standards Program

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Ontario’s Ministry of the Environment, Conservation and Parks (the Ministry) has launched public consultations on proposed regulatory amendments for the Emissions Performance Standards (EPS) program. The proposed changes are meant to ensure that the EPS program meets the updated benchmark under the Greenhouse Gas Pollution Pricing Act (the Act) set by the federal government for 2023-2030 (see our earlier bulletin on the Ministry’s prior EPS consultation here) as the current EPS program only applies to 2022. This bulletin briefly summarizes key proposed changes and provides important information on stakeholder participation in the consultation. Carbon Price. The Ministry is proposing to align the EPS program and the price of excess emissions units (EEUs) with the minimum carbon price set out in the updated federal benchmark ($65 for the 2023 compliance period rising to $170 for the 2030 compliance period). Program Scope. The Ministry is proposing to add the following sectors represented by the North American Industrial Classification System (NAICS) to the list of covered industrial activities based on a preliminary assessment of carbon leakage and competitiveness: Fruit and vegetable preserving and specialty food manufacturing; Meat product manufacturing; Beverage manufacturing; Converted paper product manufacturing; Plastic product manufacturing; Rubber product manufacturing; Forging and stamping; Spring and wire product manufacturing; Machine shops, turned product, and screw, nut, and bolt manufacturing; Engine, turbine and power transmission equipment manufacturing; Other general-purpose machinery manufacturing; Aerospace product and parts manufacturing; Office furniture (including fixtures) manufacturing; Other miscellaneous manufacturing; and Dairy product manufacturing. Registration and Cessation of Coverage. The Ministry is proposing to allow EPS facilities that expect to emit at least 10,000 tCO2e/year within three years following a major retrofit or expansion to apply to register in the EPS program as soon as production has started to increase. The Ministry is also proposing to facilitate a pathway for…

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Budget 2022: Key climate, energy, and Indigenous highlights

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Deputy Prime Minister and Minister of Finance Chrystia Freeland yesterday released Budget 2022: A Plan to Grow Our Economy and Make Life More Affordable (Budget 2022). This bulletin outlines key climate, energy, and Indigenous highlights from Budget 2022, part of total new spending of $31.2B, which includes: A proposal to establish the Canada Growth Fund (initial investment of $15B over five years), directly targeted at reducing emissions and enabling the transition to a low-carbon economy. Confirmation of the government’s intention to establish a refundable investment tax credit for carbon capture, utilization and storage (CCUS) projects to the extent that they permanently store captured CO2 through an eligible use. Plans to engage with experts on establishing an investment tax credit of up to 30 per cent, focused on net-zero technologies, battery storage solutions, and clean hydrogen. Support for the co-development of an Indigenous Climate Leadership Agenda to support self-determined action in addressing Indigenous Peoples’ climate priorities. Climate Budget 2022 includes new and proposed funding supporting important climate action, as follows: Canada Growth Fund. Budget 2022 proposes establishing the Canada Growth Fund, with an initial $15B investment over the next five years and the aim of attracting substantial private sector investment supporting the following economic policy goals: reduce emissions and contribute to achieving Canada’s climate goals; diversify the economy and bolster exports by investing in the growth of low-carbon industries and new technologies across new and traditional sectors of Canada’s industrial base; and support the restructuring of critical supply chains in areas important to Canada’s future prosperity—including our natural resources sector. Clean technology. Budget 2022 proposes the following new clean technology funding and investments: engage with experts to establish an investment tax credit of up to 30 per cent, focused on net-zero technologies, battery storage solutions, and clean hydrogen; provide $2.2B over…

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1PointFive Announces Groundbreaking Agreement for Sale of Carbon Removal Credits to Airbus

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1PointFive yesterday announced the sale of 400,000 tonnes of carbon removal credits from its planned first direct air capture (DAC) facility to aerospace leader Airbus. The facility uses using Carbon Engineering’s industrial-scale DAC solution and will extract atmospheric carbon dioxide (CO2) and permanently store it deep underground in geologic formations, delivering permanent and verifiable carbon dioxide removal. Airbus has pre-purchased the capture and permanent sequestration of 100,000 tonnes of CO2 from the atmosphere each year for four years, with an option to secure more volume in the future. The purchase marks a key milestone for the decarbonization of the aviation industry.  1PointFive is a carbon capture, utilization and sequestration (CCUS) platform that is working to help curb global temperature rise to 1.5°C by 2050 through the deployment of decarbonization solutions. It is a subsidiary of Occidental Petroleum’s Oxy Low Carbon Ventures business. Carbon Engineering is a climate solutions company working to deploy large-scale, commercial DAC facilities in multiple markets around the globe. Resilient LLP was pleased to assist 1PointFive on this groundbreaking transaction. For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

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Canada Submits NDC to UNFCCC, Formally Commits to Reduce Emissions by 40-45% by 2030

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Canada yesterday filed its update to its nationally determined contribution (NDC) under the Paris Agreement with the United Nations Framework Convention on Climate Change (UNFCCC) secretariat. The updated NDC commits Canada to reduce GHG emissions by its previously announced target of 40-45% below 2005 levels by 2030, reaching net-zero emissions by 2050. Canada’s emissions reduction ambitions under the NDC are supported by the Pan-Canadian Framework on Clean Growth and Climate Change and Canada’s strengthened climate plan: A Healthy Environment and a Healthy Economy (read our earlier bulletin on the plan here) as well as the various climate plans of provincial and territorial governments and the climate leadership, priorities, and goals of the Indigenous peoples of Canada.   Modelling for the NDC indicates that GHG emissions are anticipated to decline to 401 to 438 Mt CO2e by 2030. Further reductions are to be achieved with the adoption of innovative technologies such as zero-emission vehicles (ZEVs), industrial electrification, carbon capture, utilization and storage (CCUS), and hydrogen. The NDC makes clear that Canada is committed to a just transition to a net-zero economy (read our earlier bulletin on the Net-Zero Emissions Accountability Act here) through economic diversification and support for workers with skills training, education, accreditation, and ensuring equitable access to opportunities for underrepresented individuals and groups. For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

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