The regulated community knew the Greenhouse Gas (GHG) regulation and associated Cap and Trade regulation were looming, but many hoped there would be more time, and even some moderation, in the regulations.
Last fall, we discussed the developing regulatory issues as they relate to GHGs in Ontario (Ontario’s GHG Cap and Trade Program Takes Shape). We suggested then that this could be a “big deal” for the regulated community.
In a May 12th letter from the Ontario Chamber of Commerce sent to Glen Murray, (Ministry of Environment and Climate Change, MOECC), the Chamber said, in part, “…the Ontario Chamber Network voted to support the delay of cap and trade implementation to allow government and the business community more time to prepare.”
Other calls for moderation came from Member of Provincial Parliament, Lisa Thompson, who said Ontarians are willing to do their part to reduce their carbon foot print, but she then harshly criticized the legislation. “Specifically, we know that cap-and-trade will increase the cost of gas, groceries and home heating for families. It will put good, well-paying jobs at risk in our manufacturing sector, and it will shut out investment in new industries and facilities in our province.”
However, as announced in the Environmental Registry on May 19, 2016, “A decision has been made to proceed with a greenhouse gas Cap and Trade Program Regulation and incorporated allocation methodology and new Quantification, Reporting and Verification of Greenhouse Gas Emissions Regulation and incorporated Guideline under the Climate Change Mitigation and Low-carbon Economy Act, 2016.”
So now what?
Important GHG Cap and Trade Documents
We have begun reviewing the documents, and here are a few observations, as well as links to documents, that may be helpful to you.
- Guideline for Quantification, Reporting and Verification of Greenhouse Gas Emissions Effective January 2017 (Note: this is more than 250 pages).
- Ontario Regulation 143/16: Climate Change Mitigation and Low-Carbon Economy Act, 2016 “Quantification, Reporting and Verification of Greenhouse Gas Emissions.”
- Ontario Regulation 144/16: Climate Change Mitigation and Low-Carbon Economy Act, 2016 “The Cap and Trade Program.”
Who is Regulated?
The regulated greenhouse gases are listed in 143/16 (Column 1 of Schedule 1). These regulated gases include carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, and fluorocabons (31 in total).
Among other requirements, the regulation includes a duty to quantify, a duty to report, and a duty to verify reports. The duty to report applies when GHG activity is 10,000 tonnes of CO2e (CO2e = Carbon Dioxide Equivalent) or more. A verified report is required if it is determined that 25,000 tonnes of CO2e or more are emitted. The verified report must be prepared by “an accredited verification body.”
Specified GHG Activities (Schedule 2 of O. Reg. 143/16) lists the potentially-regulated activity, including adipic acid production, ammonia production, petroleum production, etc.
The one category that will likely require manufacturing companies to take a closer look is “General stationary combustion.” This includes, “The combustion of…fuel…for…providing useful heat or energy for industrial or commercial purposes.”
As it relates to the cap and trade aspect (O. Reg 144/16), the deadline to register (as a mandatory participant) is November 30, 2016. Mandatory participants include those who must prepare a verified report.
There are many more details to be sorted out, but if the new GHG regulations apply to you, your “to do list” just grew, in some cases, exponentially. As you prepare to assess your facility, please know that our environmental engineers have experience in quantifying GHGs and can provide assistance if needed.
If you have any questions, please contact me (cpare@dragun.com) at 519-979-7300.