Output-Based Pricing System Regulations (SOR/2019-266)

Tracking System

Marginal note:Accounts for participants

76 For the purposes of subsection 186(1) of the Act, any person, other than a person responsible for a covered facility or a proponent within the meaning of subsection 1(1) of the Canadian Greenhouse Gas Offset Credit System Regulations, who wishes to open an account in the tracking system must notify the Minister in writing.

Marginal note:Notice of closure

• 77 (1) If an account, other than a GHG Offset Credit System account as defined in the Canadian Greenhouse Gas Offset Credit System Regulations, has been inactive for more than seven years, the Minister may give 60 days’ notice to the holder of the account of the Minister’s intent to close the account.

• Marginal note:Closing of account

  (2) If the holder of the account fails to request that the account remain open before the expiry of the 60 days, the Minister may close the account under subsection 186(3) of the Act.

Recognized Units or Credits

Marginal note:Compliance unit

• 78 (1) A unit or credit is to be recognized as a compliance unit if

  • (a) it is issued by a province or by a program authority on behalf of a province;

  • (b) it is issued under an offset protocol and offset program that is set out on the list published on the Department of the Environment’s website;

  • (c) it is eligible for use as a method of compensation or compliance with respect to a pricing mechanism for GHG emissions in the province in which it was issued; and

  • (d) it corresponds to a GHG reduction or removal of one CO₂e tonne.

• Marginal note:Offset programs

  (2) In establishing the list of offset programs, the Minister must ensure that each one includes the following elements:

  • (a) rules regarding governance, oversight and enforcement;

  • (b) rules regarding registration and renewal of projects;

  • (c) rules regarding the establishment of periods within which units or credits may be issued;

  • (d) rules regarding who is entitled to the credit or unit for the GHG reductions or removals;

  • (e) measures to ensure that GHG reductions and removals are additional and permanent and that reversal risks have been mitigated;

  • (f) measures to ensure that, for a GHG reduction or removal of one CO₂e tonne, one credit or unit is issued and the unit or credit is not used more than once;

  • (g) publicly available information on projects, protocols and units or credits; and

  • (h) a requirement that, prior to the issuance of a unit or credit, there be a verification by a third party in accordance with procedures that allow them to determine with a reasonable level of assurance that the associated project meets the requirements of the protocol and program.

• Marginal note:Offset protocols

  (3) In establishing the list of offset protocols recognized under a program referred to in subsection (2), the Minister must verify that each protocol ensures that

  • (a) the reduction or removal is with respect to a GHG;

  • (b) the reduction or removal is not subject to carbon pollution pricing;

  • (c) the GHG reduction or removal is quantified using scientifically-established methods that allow for

    • (i) the calculation of the quantity of GHG emissions or removals for each GHG source, sink and reservoir,

    • (ii) the quantification of reversals,

    • (ii.1) the assessment of leakage risks,

    • (iii) the calculation of the quantity of GHG reductions or removals that would not have occurred in comparison with the baseline scenario, and

    • (iv) the use of conservative quantification assumptions and approaches;

  • (c.1) the baseline scenario used reflects the most recent data available, any legal requirements and current practices with respect to the activity that is the subject of the protocol;

  • (d) best practices are used for

    • (i) data gathering and management,

    • (ii) record keeping,

    • (iii) the ongoing monitoring of offset projects, including permanence, and

    • (iv) quality assurance and quality control; and

  • (e) the GHG global warming potentials used in calculations are less than or equal to those set out in column 2 of Schedule 3 to the Act.

• Marginal note:Recognized unit or credit

  (4) A recognized unit or credit must, at the time of its remittance to the Minister,

  • (a) be valid;

  • (b) have been issued in respect of a project that uses a protocol referred to in subsection (3);

  • (c) have been issued in respect of a project located in Canada that began in 2017 or later;

  • (d) have been verified by a verification body that

    • (i) is accredited as a verification body to the ISO Standard 14065 by the Standards Council of Canada, the ANSI National Accreditation Board or any other accreditation organization that is a member of the International Accreditation Forum, and

    • (ii) is not suspended by the accreditation organization that issued its accreditation nor suspended at the time the verification relative to the issuance of the unit or credit occurred or at the time the verification report related to the issuance of the unit or credit was signed; and

  • (e) be designated for use exclusively as a compliance unit for the purposes of remittance to the Minister under section 174, paragraph 178(1)(a) or subsection 181(2) of the Act.

Transitional Provisions

Marginal note:Subsection 12(3)

79 For the 2019 calendar year, despite subsection 12(3), if a covered facility where a specified industrial activity set out in items 2 or 3, column 1, of Schedule 1 is engaged in produces hydrogen gas, the person responsible for the covered facility must include in their annual report the information referred to in that subsection if it is available.

Marginal note:Application

80 Section 8 of the Greenhouse Gas Emissions Information Production Order, as it read immediately before August 1, 2019, continues to apply, with any necessary modifications, with respect to a person responsible for a covered facility where an industrial activity set out in Schedule 1 to these Regulations is engaged in until January 1, 2020.

Marginal note:Records

• 81 (1) Any records kept in accordance with section 11 of the Greenhouse Gas Emissions Information Production Order, as it read immediately before August 1, 2019, during the period beginning on January 1, 2019 and ending on August 1, 2019, are deemed to be records kept for the purposes of subsection 45(1) of these Regulations.

• Marginal note:Alternative method

  (2) For the 2019 calendar year, if a person responsible for a covered facility used an alternative sampling, measurement or analysis method for a specified emission type in accordance with section 8 of the Greenhouse Gas Emissions Information Production Order, as it read before August 1, 2019, they must keep a record of a description of that method.

Marginal note:Clinker

82 For the 2019 calendar year, despite paragraph 31(1)(a) of these Regulations, the production from a covered facility with respect to the specified industrial activity set out in paragraph 7(a), column 1, of Schedule 1 of these Regulations may be quantified under paragraph 36(c) of the Greenhouse Gas Emissions Information Production Order, as it read immediately before August 1, 2019. If the production is quantified under the Order, it cannot be used in the calculation of the emissions limit under subsection 36(1) of these Regulations.

Marginal note:Glass containers

83 For the 2019 calendar year, despite paragraph 31(1)(a) and subsection 36(1) of these Regulations, the production from a covered facility with respect to the specified industrial activity set out in paragraph 9(a), column 1, of Schedule 1 to these Regulations may be quantified in accordance with section 103.2 of the Greenhouse Gas Emissions Information Production Order, as it read before August 1, 2019.

Marginal note:High value chemicals

84 For the 2019 calendar year, despite paragraph 31(1)(a) of these Regulations, the production from a facility with respect to the specified industrial activity set out in paragraph 17(a), column 1, of Schedule 1 to these Regulations may be quantified in accordance with section 103.36 of the Greenhouse Gas Emissions Information Production Order, as it read before August 1, 2019.

Marginal note:Isopropyl alcohol

85 For the 2019 calendar year, despite subparagraph 11(1)(a)(ii) of these Regulations, the person responsible for the covered facility is not required to quantify the production from the specified industrial activity set out in paragraph 3(c), column 1, of Schedule 1.

Marginal note:Pulp and Paper

• 85.1 (1) For the 2019 calendar year, despite paragraph 31(1)(a) and subsection 36(1) of these Regulations, the production from a covered facility with respect to the specified industrial activity set out in paragraph 36(c), column 1, of Schedule 1 to these Regulations may be quantified in accordance with section 102 of the Greenhouse Gas Emissions Information Production Order, as it read before August 1, 2019. In that case, the output-based standards that apply are

  • (a) 0.203 CO₂e tonnes per unit of measurement, in the case of a facility equipped with a recovery boiler, lime kiln or pulping digester, and

  • (b) 0.184 CO₂e tonnes per unit of measurement, in the case of a facility not equipped with a recovery boiler, lime kiln or pulping digester.

• Marginal note:Reporting

  (2) For the 2019 calendar year, if a covered facility where the specified industrial activity set out in paragraph 36(c), column 1, of Schedule 1 to these Regulations is engaged in quantifies production in accordance with subsection (1), the annual report must include the quantity of specialty products produced, in tonnes, if that information is available.

Amendments to the Environmental Administrative Monetary Penalties Regulations

86 [Amendments]

87 [Amendments]

88 [Amendments]

89 [Amendments]

90 [Amendments]

91 [Amendments]

92 [Amendments]

Coming into Force

Marginal note:January 1, 2019

• 93 (1) Subject to subsections (2) to (6), these Regulations are deemed to have come into force on January 1, 2019.

• Marginal note:July 1, 2019

  (2) These Regulations apply in Yukon and Nunavut on July 1, 2019.

• Marginal note:January 1, 2020

  (3) Sections 26 to 30 and subsections 31(2) and (3) come into force on January 1, 2020.

• Marginal note:August 1, 2019

  (4) Subsection 45(2) of these Regulations comes into force on August 1, 2019.

• Marginal note:January 1, 2022

  (5) Section 56 comes into force on January 1, 2022.

• Marginal note:February 16, 2021

  (6) Section 76 comes into force on February 16, 2021.