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

Marginal note:Electricity generation facility

• 32 (1) Subject to subsection (2), the gross electricity generated during a compliance period by each unit within the electricity generation facility, from each of the industrial activities set out in paragraphs 38(a) to (c), column 1, of Schedule 1 that is engaged in at the unit, is determined as follows:

  • (a) if a unit uses only one fossil fuel to generate electricity, in accordance with subsection 1(1) and section 2 of Part 38 of Schedule 3; and

  • (b) if a unit uses a mixture of fossil fuels or a mixture of biomass and fossil fuels to generate electricity, in accordance with subsections 1(2) and (3) and section 2 of Part 38 of Schedule 3.

• Marginal note:Choose not to quantify

  (2) The person responsible for the electricity generation facility may choose not to quantify part or all of the quantity of electricity generated from one unit or a group of units.

33 [Repealed, SOR/2021-197, s. 11]

Ratio of Heat

Marginal note:Ratio of heat

• 34 (1) The ratio of heat from the combustion of fossil fuels during a compliance period is

  • (a) equal to 1 when the thermal energy is produced from the combustion of only fossil fuels;

  • (b) for a covered facility not referred to in paragraph (c), determined by the following formula if the thermal energy is produced from the combustion of both fossil fuels and biomass:

    HF ÷ (HF + B)

    where

    HF

    is determined by the formula

    The summation of the products of QFi and HHVi for each fossil fuel type “i”

    

    where

    QF_i

    is the quantity of fossil fuel of type “i” combusted in the facility for the generation of thermal energy during the compliance period, determined in accordance with subsection 4(2) of Part 38 of Schedule 3,

    HHV_i

    is the higher heating value of the fossil fuel of type “i” combusted in the facility for the generation of thermal energy during the compliance period, determined in accordance with Quantification Methods, and

    i

    is the i^th fossil fuel type combusted in the facility during the compliance period, where “i” goes from 1 to n and where n is the number of types of fossil fuels combusted, and

    B

    is determined by the formula

    The summation of the products of QBBk and HHVk for each biomass fuel type “k”

    

    where

    QBB_k

    is the quantity of biomass fuel type “k” combusted in the facility for the generation of thermal energy during the compliance period, determined in accordance with subsection 4(2) of Part 38 of Schedule 3 and Quantification Methods,

    HHV_k

    is the higher heating value for biomass fuel type “k” combusted in the facility for the generation of thermal energy during the compliance period, determined in accordance with Quantification Methods, and

    k

    is the k^th biomass fuel type combusted in the facility during the compliance period, where “k” goes from 1 to m and where m is the number of types of biomass fuels combusted; and

  • (c) for an electricity generation facility, determined by the following formula when the thermal energy is produced from the combustion of both fossil fuels and biomass:

    HF ÷ (HF + B)

    where

    HF

    is determined by the formula

    The summation of the products of QFi and HHVi for each fossil fuel type “i”

    

    where

    QF_i

    is the quantity of fossil fuel of type “i” combusted in the facility for the generation of thermal energy during the compliance period, determined in accordance with subsection 1(3) of Part 38 of Schedule 3,

    HHV_i

    is the higher heating value of the fossil fuel of type “i” combusted in the facility for the generation of thermal energy during the compliance period, determined in accordance with Quantification Methods, and

    i

    is the i^th fossil fuel type combusted in the facility during the compliance period, where “i” goes from 1 to n and where n is the number of types of fossil fuel combusted, and

    B

    is determined by the formula

    The summation of the products of QBBk and HHVk for each biomass fuel type “k”

    

    where

    QBB_k

    is the quantity of biomass fuel type “k” combusted in the facility for the generation of thermal energy during the compliance period, determined in accordance with subsection 1(3) of Part 38 of Schedule 3,

    HHV_k

    is the higher heating value for biomass fuel type “k” combusted in the facility for the generation of thermal energy, during the compliance period determined in accordance with Quantification Methods, and

    k

    is the k^th biomass fuel type combusted in the facility during the compliance period, where “k” goes from 1 to m and where m is the number of types of biomass fuels combusted.

• Marginal note:Default ratio of heat

  (2) Despite paragraph (1)(b) or (c), if, for any reason beyond the control of the person responsible for a covered facility, the data required to quantify the ratio of heat from the combustion of fossil fuels are missing for a given period during the 2019 calendar year, 1 can be used as the ratio of heat from the combustion of fossil fuels.

Emission of GHGs

Marginal note:Calculation

• 35 (1) The person responsible for a covered facility must determine the quantity of GHGs that are emitted from the covered facility during a compliance period in accordance with the formula

  A – B

  where

  A

  is the total quantity of GHGs from the covered facility, expressed in CO₂e tonnes, during the compliance period,

  • (a) in the case of a facility referred to in paragraph 11(1)(a), determined in accordance with section 17,

  • (b) in the case of a facility referred to in paragraph 11(1)(b), corresponding to the sum referred to in subparagraph 11(1)(b)(ii), and

  • (c) in the case of a facility referred to in paragraph 11(1)(c), corresponding to the sum referred to in subparagraph 11(1)(c)(i); and

  B

  is the quantity of CO₂ captured at the covered facility that is stored during the compliance period in a storage project, determined using Quantification Methods, expressed in CO₂e tonnes.

• Marginal note:CO₂ — quantity that may be subtracted

  (2) For the purposes of the description of B in subsection (1), the quantity of CO₂ may only be included in that description if it has been included in the description of A and has been permanently stored in a storage project that meets the following criteria:

  • (a) the geological site into which the CO₂ is injected is

    • (i) a deep saline aquifer for the sole purpose of storage of CO₂, or

    • (ii) a depleted oil reservoir for the purpose of enhanced oil recovery; and

  • (b) the quantity of CO₂ stored for the purposes of the project is captured, transported and stored in accordance with the laws applicable to Canada or a province or applicable to the United States or one of its states.

• Marginal note:Biomass

  (3) The quantity of CO₂ from biomass is not included in the amount determined for B in subsection (1).

• Marginal note:Deemed emission of CO₂

  (4) For greater certainty, the quantity of CO₂ from a covered facility that has been captured but has not been permanently stored in a storage project that meets the requirements of subsection (2) is deemed to have been emitted by the covered facility and is included in the quantity of GHGs that are included in the description of A in subsection (1).

Emissions Limit

Marginal note:General rule

• 36 (1) Subject to subsection (2) and sections 16, 36.1, 36.2 and 42, the person responsible for a covered facility, other than an electricity generation facility, must determine the GHG emissions limit that applies to that covered facility for each compliance period, expressed in CO₂e tonnes, in accordance with the formula

  The summation of the products of Ai and the result of Bi minus the product of Bi, C and D minus 2022 for each specified industrial activity “i”.

  

  where

  A_i

  is the covered facility’s production from each specified industrial activity “i” during the compliance period, quantified in accordance with section 31;

  B_i

  is the following output-based standard applicable to the specified industrial activity “i”, as the case may be:

  • (a) for a specified industrial activity set out in column 1 of Schedule 1 and for which an output-based standard is set out in column 3 of that Schedule, that standard,

  • (b) for a specified industrial activity set out in column 1 of Schedule 1 and for which column 3 of that Schedule sets out that an output-based standard must be calculated in accordance with section 37, the output-based standard calculated in accordance with that section, and

  • (c) for an additional industrial activity, the output-based standard calculated in accordance with section 37;

  C

  is the following tightening rate applicable to the specified industrial activity “i”, as the case may be:

  • (a) 0% for the specified industrial activity set out in item 38, column 1, of Schedule 1,

  • (b) 1% for the specified industrial activities set out in paragraph 3(c) and items 7, 8, 13, 17, 19, 20, 34, 40, 41 and 43, column 1, of Schedule 1, and

  • (c) 2% for all other specified industrial activities;

  D

  is the calendar year that corresponds to the compliance period; and

  i

  is the i^th specified industrial activity where “i” goes from 1 to n and where n is the total number of specified industrial activities engaged in at the covered facility.

• Marginal note:Ethanol production

  (2) For the purposes of subsection (1), the person responsible for a covered facility must not include the specified industrial activity set out in paragraph 13(b), column 1, of Schedule 1 unless the covered facility also includes the specified industrial activity set out in paragraph 13(a), column 1. The covered facility is deemed to not be engaged in the specified industrial activity set out in item 32, column 1, of that Schedule.

• Marginal note:Oilseeds

  (3) For the purposes of subsection (1), the person responsible for a covered facility where the specified industrial activity set out in item 31, column 1, of Schedule 1 is engaged in may, for the 2019 calendar year, quantify their production in finished oilseed products and use an output-based standard of 0.0431 CO₂e tonnes per unit of measurement of production, instead of the production metric set out in column 2 and the output-based standard set out in column 3.

• Marginal note:Clarification — fertilizer

  (4) For greater certainty, if the industrial activity set out in paragraph 29(b), column 1, of Schedule 1 and also any of the industrial activities set out in paragraph 29(c), (d) or (e), column 1, of Schedule 1 are engaged in at the covered facility, the output-based standard applicable to the industrial activity set out in that paragraph 29(b) applies and the output-based standard applicable to the industrial activity set out in that paragraph 29(c), (d) or (e) applies, as the case may be.

• Marginal note:New additional industrial activity

  (4.1) For the purposes of subsection (1), an additional industrial activity that was recognized by the Minister during a calendar year is not included in the determination of the GHG emissions limit for the compliance period that corresponds to that calendar year.

• Marginal note:Output-based standard

  (5) For the purposes of subsection (1), if an output-based standard must be calculated, it is calculated once, except in the situation referred to in subsection 39.

Marginal note:New electricity production — gaseous fuel

• 36.1 (1) Despite subsection 36(1), if a covered facility — other than one referred to in subsection 16(6) — begins generating electricity on or after January 1, 2021 and meets the following criteria, the person responsible for the covered facility must apply, for the specified industrial activity set out in paragraph 38(c), column 1, of Schedule 1, the applicable output-based standard, in accordance with subsection (2), for each compliance period, as of the compliance period during which the covered facility began generating electricity:

  • (a) the electricity is generated from gaseous fuel by equipment that is designed to operate at a thermal energy to electricity ratio of less than 0.9; and

  • (b) the covered facility has an electricity generation capacity equal to or greater than 50 MW from that equipment.

• Marginal note:Decreasing output-based standard

  (2) The output-based standard that applies to the industrial activity referred to in paragraph 38(c), column 1, of Schedule 1 is, as the case may be

  • (a) 370 CO₂e tonnes per unit of measurement, for the 2021 compliance period,

  • (b) 329 CO₂e tonnes per unit of measurement, for the 2022 compliance period,

  • (c) 288 CO₂e tonnes per unit of measurement, for the 2023 compliance period,

  • (d) 247 CO₂e tonnes per unit of measurement, for the 2024 compliance period,

  • (e) 206 CO₂e tonnes per unit of measurement, for the 2025 compliance period,

  • (f) 164 CO₂e tonnes per unit of measurement, for the 2026 compliance period,

  • (g) 123 CO₂e tonnes per unit of measurement, for the 2027 compliance period,

  • (h) 82 CO₂e tonnes per unit of measurement, for the 2028 compliance period,

  • (i) 41 CO₂e tonnes per unit of measurement, for the 2029 compliance period, and

  • (j) 0 CO₂e tonnes per unit of measurement, for the 2030 compliance period and subsequent compliance periods.