Government of Canada / Gouvernement du Canada
Symbol of the Government of Canada

Search

Canadian Greenhouse Gas Offset Credit System Regulations (SOR/2022-111)

Regulations are current to 2024-02-06

Process for Offset Credit Issuance (continued)

Reversal Risk Management Plan

Marginal note:Establishment of plan

  •  (1) The proponent of a sequestration project for which the tonne-tonne or hybrid tonne-year quantification method is used must establish, in accordance with the protocol, a reversal risk management plan that identifies and assesses reversal risks associated with the project and describes any measures and monitoring activities to mitigate those risks.

  • Marginal note:Implementation of plan

    (2) The proponent of a sequestration project referred to in subsection (1) must implement the reversal risk management plan for the duration of the project’s crediting period and, in the case of a sequestration project for which the tonne-tonne quantification method is used, continue to implement that plan for a period of 100 years following the end of the crediting period.

  • Marginal note:Updating the plan

    (3) A proponent may update their reversal risk management plan but must not cease implementing existing reversal risk mitigation measures. The proponent may only add new reversal risk mitigation measures or increase the stringency of existing measures.

Monitoring

Marginal note:Tonne-tonne quantification method

  •  (1) The proponent of a sequestration project for which a tonne-tonne quantification method is used must, in accordance with the protocol, monitor the quantity of GHGs emitted or GHGs removed from the atmosphere with respect to the project and submit to the Minister a monitoring report, accompanied by a verification report, with each project report submitted during the crediting period and every 6 years for 100 years after the end of the last crediting period for that project.

  • Marginal note:Hybrid tonne-year quantification method

    (2) The proponent of a sequestration project for which a hybrid tonne-year quantification method is used must, in accordance with the protocol, monitor the quantity of GHGs emitted or GHGs removed from the atmosphere with respect to the project and submit to the Minister a monitoring report, accompanied by a verification report, with each project report submitted during the project’s crediting period.

  • Marginal note:Content of monitoring report

    (3) The monitoring report must include

    • (a) the project registration number;

    • (b) a description of any reversal risk mitigation measures and monitoring activities that were implemented;

    • (c) a declaration by the proponent that, during the period covered by the report, the reversal risk management plan was implemented and that no reversal occurred; and

    • (d) a declaration, dated and signed by the proponent or their authorized official, stating that the information contained in the report is accurate and complete.

Verification

Marginal note:Verification body

 To be authorized to conduct a verification for the purposes of these Regulations, a third party must

  • (a) meet the following accreditation requirements:

    • (i) it is accredited as a verification body, under ISO Standard 14065:2020 entitled General principles and requirements for bodies validating and verifying environmental information, by the Standards Council of Canada, the ANSI National Accreditation Board or any other accreditation organization that has a memorandum of understanding with the Department of Environment and that is a member of the International Accreditation Forum,

    • (ii) it has a scope of accreditation that includes technical activities at the project level with respect to GHG project verifications, and

    • (iii) it is not suspended by an accreditation organization that issued its accreditation; and

  • (b) use a verification team that have the necessary competencies to verify a project report, corrected project report, reversal report or monitoring report, including at least one individual with training relevant to the project type, as specified in the applicable protocol.

Marginal note:Verification standard

  •  (1) A verification body must conduct verifications in accordance with ISO Standard 14064-3 by applying methods that allow it to make a determination to a reasonable level of assurance, as defined in that Standard as to whether, in its opinion,

    • (a) with respect to a project report or corrected project report

      • (i) the quantity of GHG reductions reported in the report was calculated in accordance with these Regulations,

      • (ii) the report was prepared in accordance with these Regulations,

      • (iii) the project was implemented in accordance with the applicable protocol,

      • (iv) the conditions of registration for the project, set out in section 8 or 9, are still being met at the time of the preparation of the verification report,

      • (v) the proponent meets the requirements for the issuance of offset credits, set out in section 7, at the time of the preparation of the verification report, and

      • (vi) no material discrepancy, referred to in subsection (2) or (3), as the case may be, exists with respect to the quantity of GHG reductions reported in the report;

    • (b) with respect to a reversal report

      • (i) reversal risk mitigation measures and monitoring activities were implemented in accordance with the reversal risk management plan prior to the reversal,

      • (ii) the report was prepared in accordance with these Regulations, and

      • (iii) the errors or omissions identified during the verification and referred to in paragraph 3(b) of Schedule 5 do not constitute a material discrepancy, referred to in subsection (4); and

    • (c) with respect to a monitoring report

      • (i) the report was prepared in accordance with these Regulations,

      • (ii) the reversal risk mitigation measures and monitoring activities were implemented in accordance with the reversal risk management plan, and

      • (iii) the reversal risk mitigation measures and monitoring activities that were implemented were those set out in the report.

  • Marginal note:Material discrepancy — project report or corrected project report

    (2) For the purpose of the verification of the project report or corrected project report, a material discrepancy exists if

    • (a) with respect to the quantity of GHG reductions referred to in subsection 20(1) or (2) that are reported in the project report or corrected project report for any calendar year covered by the report and that are less than 100,000 tonnes of CO2e,

      • (i) in the case of each error or omission in the project report or corrected project report, that is identified during the verification and that may be quantified, the amount, expressed as a percent, determined by the following formula, is equal to or greater than 5%:

        A ÷ B × 100

        where

        A
        is the absolute value of the overstatement or understatement resulting from the error or omission for the calendar year, expressed in CO2e tonnes, and
        B
        is the quantity of GHG reductions, determined in accordance with subsection 20(1) or (2), as the case may be, that are reported in the project report or corrected project report for the calendar year, expressed in CO2e tonnes, and
      • (ii) in the case of the aggregate of all errors and omissions in the project report or corrected project report, that are identified during the verification and that may be quantified, the amount, expressed as a percent, determined by the following formula, is equal to or greater than 5%:

        A ÷ B × 100

        where

        A
        is the sum of the absolute value of all overstatements and understatements resulting from the errors and omissions, for the calendar year, expressed in CO2e tonnes, and
        B
        is the GHG reductions determined in accordance with subsection 20(1) or (2), as the case may be, with respect to a calendar year stated in the project report or corrected project report, expressed in CO2e tonnes; and
    • (b) with respect to quantity of GHG reductions referred to in subsection 20(1) or (2) that are reported in the project report or corrected project report for any calendar year covered by the report and that are equal to or greater than 100,000 tonnes of CO2e,

      • (i) in the case of each error or omission in the project report or corrected project report, that is identified during the verification and that may be quantified, the result, expressed as a percent, determined by the following formula, is equal to or greater than 2%:

        A ÷ B × 100

        where

        A
        is the absolute value of the overstatement or understatement resulting from the error or omission for the calendar year, expresssed in CO2e tonnes, and
        B
        is the quantity of GHG reductions, determined in accordance with subsection 20(1) or (2), as the case may be, that are reported in the project report or corrected project report for the calendar year, expressed in CO2e tonnes, and
      • (ii) in the case of the aggregate of all errors and omissions in the project report or corrected project report, that are identified during the verification and that may be quantified, the result, expressed as a percent, determined by the following formula, is equal to or greater than 2%:

        A ÷ B × 100

        where

        A
        is the sum of the absolute value of all overstatements and understatements resulting from the errors and omissions, for the calendar year, expressed in CO2e tonnes, and
        B
        is the GHG reductions determined in accordance with subsection 20(1) or (2), as the case may be, for the calendar year stated in the project report or corrected project report, expressed in CO2e tonnes.
  • Marginal note:Material discrepancy — aggregation

    (3) In the case of an aggregation of projects, to determine if the errors and omissions for the aggregation constitute a material discrepancy in accordance with subsection (2), the quantity of GHG reductions referred to in paragraphs (2)(a) or (b) corresponds to the sum referred in paragraph 20(3)(c) reported in the project report submitted for the aggregation.

  • Marginal note:Material discrepancy — reversal report

    (4) For the purposes of these Regulations, the errors or omissions in a reversal report constitute a material discrepancy if

    • (a) in the case where the quantity of GHGs released into the atmosphere during the reversal reported in the reversal report is less than 100,000 tonnes of CO2e, the result determined in accordance with the formula set out in paragraph (2)(a) — but by replacing the quantity of GHG reductions specified in the description of B in that paragraph with the quantity of GHGs released into the atmosphere during the reversal reported in the reversal report — is equal to or greater than 5%; and

    • (b) in the case where the quantity of GHGs released into the atmosphere during the reversal reported in the reversal report is equal to or greater than 100,000 tonnes of CO2e, the result determined in accordance with the formula set out in paragraph (2)(b) — but by replacing the quantity of reductions referred to in the description of B in that paragraph with the quantity of GHGs released into the atmosphere during the reversal reported to in the reversal report — is equal to or greater than 2%.

Marginal note:Conflict of interest

 The proponent must ensure that no real or potential conflict of interest exists between any party involved in the project and the verification body, including members of the verification team and any individual or corporate entity associated with the verification body, that threatens to or compromises the verification body’s impartiality and that cannot be effectively managed.

Marginal note:Limits — verification body

  •  (1) A proponent must not have their project report verified by a verification body if

    • (a) in the case of a sequestration project, the verification body has verified the project reports with respect to the last 12 consecutive calendar years, unless three calendar years have elapsed since the last of those reports was verified; and

    • (b) in the case of any other project, the verification body has verified the project reports with respect to the last for five calendar years, unless two calendar years have elapsed since the last of those reports was verified.

  • Marginal note:Exception — corrected project report

    (2) Despite subsection (1), a proponent may have a corrected project report verified by the same verification body that verified the project report being corrected.

Marginal note:Site visit

  •  (1) With respect to a project that is not in an aggregation, the proponent of a project must ensure that the project site is visited by a verification body in the following situations:

    • (a) it is the initial verification of the project for the purposes of these Regulations or it is the initial verification by the verification body;

    • (b) if the quantity of GHG reductions referred to in subsection 20(1) or (2) that is reported in the project report being verified is less than 10,000 tonnes of CO2e for any calendar year covered by the report, it has been at least 24 months since the project site was visited by a verification body;

    • (c) if the quantity of GHG reductions referred to in subsection 20(1) or (2) that is reported in the project report being verified is equal to or greater than 10,000 tonnes of CO2e for any calendar year covered by the report, it has been at least 12 months since the project site was visited by a verification body;

    • (d) in accordance with ISO Standard 14064-3, issued a modified or adverse opinion with respect to the quantity of GHG reductions reported in the previous project report;

    • (e) the verification body is conducting a verification of a reversal report; or

    • (f) the verification body is of the opinion that a site visit is required.

  • Marginal note:Aggregation

    (2) With respect to a project in an aggregation, the proponent of an aggregation of projects must ensure that the site of a project in the aggregation is visited by a verification body for the purposes of verifying a project report in any of the following situations:

    • (a) the quantity of GHG reductions referred to in subsection 20(3) that is reported in the project report being verified is equal to or greater than 10,000 tonnes of CO2e for any calendar year covered by the report and it has been at least 12 months since the project site was visited by a verification body;

    • (b) the final project report for the aggregation following the end of the crediting period is being submitted, and the project site has not been visited by a verification body during the crediting period;

    • (c) the verification body, in accordance with ISO Standard 14064-3, issued a modified or adverse opinion with respect to the quantity of GHG reductions reported in the previous project report;

    • (d) the verification body is conducting a verification of a reversal report; and

    • (e) the verification body is of the opinion that a site visit is required.

  • Marginal note:Monitoring report

    (3) The proponent must ensure that the site of a sequestration project for which the tonne-tonne quantification method is used is visited by a verification body as part of the verification of any monitoring report submitted after the end of the last crediting period.

  • Marginal note:Other visits

    (4) If buildings that are used for legal, administrative or management purposes are not located where project activities are carried out and data or information necessary for verifying a report submitted under these Regulations is kept in those buildings, the proponent must ensure that the verification body visits those buildings.

Marginal note:Content of verification report

 A verification report must be prepared by a verification body and contain the information set out in Schedule 5.

Issuance of Offset Credits

Marginal note:Criteria for issuance of offset credits

  •  (1) The Minister must issue offset credits to a proponent for the period covered by a project report, in the amount determined in accordance with subsection (2), if the requirements of section 7 are met and

    • (a) the project report and any corrected project report is free of material discrepancies;

    • (b) the quantity of GHG reductions referred to in any of subsections 20(1) to (3) reported in the report were quantified in accordance with these Regulations; and

    • (c) the GHG reductions for which the credits are issued were generated during the period covered by the report.

  • Marginal note:Calculation of offset credits

    (2) The number of offset credits that the Minister must issue in respect of a project for each calendar year covered by the report is determined by the following formula:

    Ai – Bi – Ci – Di

    where

    Ai
    is the total reported quantity of GHG reductions determined in accordance with subsection 20(1) or (2) or paragraph 20(3)(a) or (b), as the case may be, for calendar year “i”, expressed in CO2e tonnes;
    Bi
    is the product of the description of A and percentage of credits the proponent agrees to forgo, for calendar year “i”, with respect to the project, pertaining to direct financial incentives in accordance with an agreement;
    Ci
    is for calendar year “i”, equal to the product of the result of the following formula and either, for a sequestration project for which the tonne-tonne or hybrid tonne-year quantification method is used, the sum of 3% and the percentage set out in the protocol that corresponds to the reversal risk mitigation measures and monitoring activities implemented for the project for that calendar year, or, for any other project, 3%:

    Ai – (Bi + Di)

    Di
    is the net increase in GHGs that was carried forward in accordance with subsection 20(5) for calendar year “i”; and
    i
    is the ith calendar year, where “i” goes from 1 to n and where n is the number of calendar years covered by the report.
  • Marginal note:Rounding

    (3) For the purposes of subsection (2), any result calculated under that subsection is to be rounded to the nearest whole number and, if the number is equidistant between two whole consecutive numbers, to the higher number.

 

Date modified: