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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…

The Government of Ontario has released O. Reg. 241/19 Greenhouse Gas Emissions Performance Standards (the Regulation), which came into effect on July 4, 2019 following an unexpected process surrounding the release of the Regulation. The Province published a regulatory proposal for industrial emission performance standards (EPS) in February 2019. Compliance. The first compliance period under the Regulation would begin on January 1 in the year in which Ontario is removed from the list of provinces to which the federal Output-Based Pricing System applies. The Regulation provides that: Compliance instruments include excess emissions units (EEUs) and emissions performance units (EPUs), each of which are subject to eligibility requirements if they are used to satisfy a facility’s compliance obligation. EEUs must be distributed to facilities beginning in the first year after the first compliance period. The cost of each EEU is set at $20 in 2020, $30 in 2021, $40 in 2022, and $50 in 2023. EPUs must be distributed in the year after a compliance period to facilities for which the verified total annual emissions limit for the compliance period is more than the verified verification amount for the compliance period (unless the Historical Facility Emissions Limit Standard is used). EPUs expire after five years. Eligible compliance instruments must generally be removed from a facility’s account at the end of a compliance period, with EEUs to be removed before any EPUs are removed. EPUs may be transferred between facilities’ accounts by agreement if notice is provided. Registration. The Regulation further provides for mandatory registration of facilities that report or have reported emissions of at least 50,000 tonnes of CO2e per year under current or prior regulations. Voluntary registration may be available for facilities that report or have reported emissions of at least 10,000 and less than 50,000 tonnes of CO2e per…