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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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Ontario Provides EPS Principles for Meeting Federal Benchmark and Releases New Emissions Reduction Modelling

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The Ontario Ministry of the Environment, Conservation and Parks (the Ministry) has posted a bulletin (the Bulletin) providing principles to guide policy development and future consultations for Ontario’s Emissions Performance Standards (EPS) program to meet the updated federal benchmark for 2023-2030 (read our earlier bulletins on the EPS here and here). The Ministry also released new modelling demonstrating how Ontario is forecasted to meet its GHG  emission reduction target of 30% below 2005 levels. This bulletin briefly summarizes key information in the Bulletin and the emissions scenario modelling. Proposed Principles. The Bulletin notes that the federal government, in its Update to the Pan-Canadian Approach to Carbon Pollution Pricing 2023-2030, set out new and more stringent benchmark requirements ($65/tCO2e in 2023, rising $15/year to $170 in 2030) that all carbon pricing systems, including the EPS program, must meet under the Greenhouse Gas Pollution Pricing Act. To meet the more stringent benchmark, the Ministry is proposing to design the next phase of the EPS program using the following guiding principles: provide continuity and predictability for Ontario businesses; incent GHG emissions reductions, which will help Ontario to meet its target to reduce GHG emissions by 30% below 2005 levels by 2030; minimize the risk for carbon leakage (the risk of production leaving the province for other jurisdictions with less stringent climate policies), taking into account competitiveness impacts to Ontario industry; ensure the program continues to be fair, cost-effective, and flexible to the needs and circumstances of Ontario; and minimize regulatory burden. Emissions Reduction Modelling. New modelling released as part of the Bulletin provides updated forecasting of provincial emissions out to 2030. The modelling shows that Ontario’s emissions are forecasted to be 143.7 MT CO2e in 2030, slightly lower than Ontario’s 144 MT target for 2030. The Ministry notes, and as shown in the graph…

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MECP Proposes Amendments to the Emissions Performance Standards

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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…

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