Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations (SOR/2012-167)

Marginal note:Deferral of application of subsection 3(1)

• 6 (1) A responsible person for an existing unit that ceases to produce electricity after June 30, 2015 (referred to in this section as the “shut-down unit”) may apply to the Minister to have the application of subsection 3(1) deferred in respect of another unit or units (referred to in this section as the “deferred units”) for the number of years in the period that begins on January 1 of the calendar year that follows that cessation and that ends on December 31 of the calendar year in which the useful life of the shut-down unit ends. If the application is granted, the application of subsection 3(1) is, in respect of each calendar year in that period, deferred for the deferred unit and the calendar year that begins after the end of that deferred unit’s useful life that the responsible person specifies in their application.

• Marginal note:Conditions of application for deferral

  (2) The application may be made only if the following conditions are satisfied:

  • (a) the shut-down unit and each of the specified deferred units have a common owner who has an ownership interest of 50% or more in the shut-down unit and in each of those specified deferred units;

  • (b) the shut-down unit and each of those specified deferred units are located in the same province; and

  • (c) the production capacity of the shut-down unit, during the calendar year preceding the day on which it ceased production, was greater than or equal to the production capacity of each of those specified deferred units during the calendar year preceding the day on which the application was made.

• Marginal note:Content of application

  (3) The application must be made on or before May 31 of the calendar year preceding the earliest of the specified calendar years referred to in subsection (1) and must

  • (a) indicate the calendar years included in the period referred to in subsection (1);

  • (b) specify the deferred unit referred to in subsection (1) in respect of each of the calendar years referred to in paragraph (a);

  • (c) for each of those specified deferred units in respect of each of those calendar years, specify the calendar year that begins after the end of the useful life of the unit for which the application of subsection 3(1) is to be deferred;

  • (d) indicate the registration number of the shut-down unit and of each of the specified deferred units; and

  • (e) include information, with supporting documentation, to demonstrate that the conditions of paragraphs (2)(a) to (c) are satisfied.

• Marginal note:Granting of deferral

  (4) The Minister must, within 30 days after receiving the application, grant the deferral if the following conditions are satisfied:

  • (a) the shut-down unit is not a substituted unit referred to in subsection 5(5);

  • (b) no deferred unit is a unit that is involved in a temporary exemption granted under subsection 9(3); and

  • (c) the Minister is satisfied that the conditions of paragraphs (2)(a) to (c) are satisfied;

• Marginal note:No recommencement of shut-down unit

  (5) It is prohibited for any person to cause the shut-down unit to recommence producing electricity after the application of subsection 3(1) is deferred in respect of a specified deferred unit.

• Marginal note:Changes to deferred units

  (6) The responsible person referred to in subsection (1) may change the specified deferred unit in respect of a specified calendar year referred to in paragraph (3)(c) by sending a notice to the Minister if that specified calendar year is not one for which the application of subsection 3(1) has been deferred. The notice must include

  • (a) the registration number of the proposed new specified deferred unit;

  • (b) the calendar year that begins after the end of the useful life of the proposed new specified deferred unit for which the application of subsection 3(1) is to be deferred; and

  • (c) information, with supporting documentation, to demonstrate that the conditions of paragraphs (2)(a) and (b) are satisfied in respect of the proposed new specified deferred unit and the condition of paragraph (2)(c) is satisfied in respect of each specified deferred unit, including the proposed new specified deferred unit, during the calendar year preceding the day on which the notification is sent.

• Marginal note:Allowance of changes

  (7) The Minister must, within 30 days after receiving the notification, allow the change if the Minister is satisfied that the demonstration referred to in subsection (6) has been made.

• Marginal note:Cessation of effect

  (8) Despite subsection (1), the deferral ceases to have effect and subsection 3(1) applies in respect of the specified deferred units as of the earliest of

  • (a) the calendar year that follows the calendar year in which the application is made, if a shut-down unit referred to in subsection (1) has not ceased to produce electricity by January 1 of that following calendar year,

  • (b) any calendar year in which a shut-down unit referred to in subsection (1) recommences to produce electricity,

  • (c) the calendar year that follows the day on which the Minister receives a notice from the responsible person for the shut-down unit and the deferred units indicating that they wish the deferral to no longer have an effect,

  • (d) the calendar year that follows the day on which the condition of paragraph (2)(a) is no longer satisfied, and

  • (e) the calendar year that follows a specified calendar year referred to in paragraph (3)(c) in which the specified deferred unit referred to in that paragraph had a production capacity greater than the production capacity of the shut-down unit during the calendar year preceding the day on which it ceased production.

Emergency Circumstances

Marginal note:Conditions for application

• 7 (1) A responsible person for a unit may, under emergency circumstances described in subsection (2), apply to the Minister for an exemption from the application of subsection 3(1) in respect of the unit if the following conditions are satisfied:

  • (a) as a result of the emergency circumstances, there is a disruption, or a significant risk of disruption, to the electricity supply in the province where the unit is located; and

  • (b) the operation of the unit will end, decrease the risk of, or mitigate the consequences of, the disruption.

• Marginal note:Criteria of emergency circumstances

  (2) An emergency circumstance is a circumstance

  • (a) that arises due to an extraordinary, unforeseen and irresistible event; or

  • (b) under which one or more of the measures referred to in paragraph 1(a) of the Regulations Prescribing Circumstances for Granting Waivers Pursuant to Section 147 of the Act has been made or issued in the province where the unit is located.

• Marginal note:Application

  (3) The responsible person must, within 15 days after the emergency circumstance arises, provide the Minister with their application. The application must include the unit’s registration number, the date on which the emergency circumstance arose and information, with supporting documentation, to demonstrate that the conditions of paragraphs (1)(a) and (b) are satisfied.

• Marginal note:Granting of exemption

  (4) The Minister must, within 30 days after receiving the application, grant the exemption if the Minister is satisfied that the conditions of paragraphs (1)(a) and (b) are satisfied.

• Marginal note:Period of exemption

  (5) The exemption has effect as of the day on which the emergency circumstance arose and ceases to have effect on the earliest of

  • (a) the day that is 90 days after that day,

  • (b) the day specified by the Minister, and

  • (c) the earlier of

    • (i) the day on which the event referred to in paragraph (2)(a) ceases to cause a disruption, or a significant risk of disruption, to the electricity supply in the province where the unit is located, and

    • (ii) the day on which the measure, if any, referred to in paragraph (2)(b) ceases to be in effect.

Marginal note:Extension

• 8 (1) If paragraphs 7(1)(a) and (b) will continue to apply on and after the day on which an exemption granted under subsection 7(4) is to cease to have effect, the responsible person may, before that day, apply to the Minister for an extension of the exemption.

• Marginal note:Application

  (2) The application must include the unit’s registration number and information, with supporting documentation, to demonstrate that

  • (a) paragraphs 7(1)(a) and (b) will continue to apply after the day on which the exemption is to cease to have effect; and

  • (b) steps — other than the operation of the unit during the period of the exemption — have been, and are being, taken to end, decrease the risk of, or mitigate the consequences of, the disruption.

• Marginal note:Granting of extension

  (3) The Minister must, within 15 days after receiving the application, grant the extension if the Minister is satisfied that paragraphs (2)(a) and (b) have been demonstrated.

• Marginal note:Duration

  (4) The extension ceases to have effect on the earliest of

  • (a) the day that is 90 days after the day on which the application for the extension was made,

  • (b) the day specified by the Minister, and

  • (c) the day referred to in paragraph 7(5)(c).

Carbon Capture and Storage

Temporary Exemption — System to be Constructed

Marginal note:Application

• 9 (1) A responsible person for a new unit or an old unit may apply to the Minister for a temporary exemption from the application of subsection 3(1) in respect of the unit if

  • (a) in the case of a new unit, the unit is designed to permit its integration with a carbon capture and storage system that is to be constructed; and

  • (b) in the case of an old unit, the unit may be retrofitted to permit its integration with a carbon capture and storage system that is to be constructed.

• Marginal note:Granting and content of application

  (2) The application must indicate the unit’s registration number and include the following supporting documents and information:

  • (a) a declaration that includes statements indicating that

    • (i) based on the economic feasibility study referred to in paragraph (b), the unit, when operating with an integrated carbon capture and storage system is, to the best of the responsible person’s knowledge and belief, economically viable, and

    • (ii) based on the technical feasibility study referred to in paragraph (c) and the implementation plan referred to in paragraph (e), the responsible person expects to satisfy the requirements set out in section 10 and, as a result, to be in compliance with subsection 3(1) by January 1, 2025;

  • (b) an economic feasibility study that demonstrates the economic viability of the unit when it operates with an integrated carbon capture and storage system and that

    • (i) provides project cost estimates, with their margin of error, for the construction of the integrated carbon capture and storage system, and

    • (ii) identifies the source of financing for that construction;

  • (c) a technical feasibility study that establishes — based on information referred to in Schedule 2 related to the capture, transportation and storage elements of the carbon capture and storage system — that there are no insurmountable technical barriers to carrying out the following activities:

    • (i) capturing a sufficient volume of CO₂ emissions from the combustion of fossil fuels in the unit to enable the responsible person to comply with subsection 3(1),

    • (ii) transporting the captured CO₂ emissions to suitable geological sites for storage, and

    • (iii) storing the captured CO₂ emissions in those suitable geological sites;

  • (d) a description of any work that has been done to satisfy the requirements set out in section 10, along with the information referred to in Schedule 3 with respect to that work; and

  • (e) an implementation plan that provides a description of the work to be done, with a schedule for the steps necessary to achieve the following objectives:

    • (i) satisfaction of the requirements set out in section 10, and

    • (ii) compliance of the responsible person with subsection 3(1) by January 1, 2025 when the unit is operating with an integrated carbon capture and storage system that captures CO₂ emissions from the combustion of fossil fuels in the unit in accordance with the laws of Canada or a province that regulate that capture and that transports and stores those emissions in accordance with the laws of Canada or a province, or of the United States or one of its states, that regulate that transportation or storage, as the case may be.

• Marginal note:Granting of temporary exemption

  (3) The Minister must, within 120 days after receiving the application, grant the temporary exemption if

  • (a) the application includes the documents referred to in subsection (2); and

  • (b) the information contained in those documents can reasonably be regarded as establishing that

    • (i) the unit, when operating with an integrated carbon capture and storage system, will be economically viable,

    • (ii) the capture, transportation and storage elements of the carbon capture and storage system will be technically feasible,

    • (iii) if applicable, a requirement set out in section 10 has been satisfied by work done before the application was made, and

    • (iv) the responsible person will satisfy the requirements set out in section 10 and, as a result, will be in compliance with subsection 3(1) by January 1, 2025 when the unit is operating with an integrated carbon capture and storage system.

• Marginal note:Duration

  (4) A temporary exemption, unless revoked under section 13, remains in effect until December 31, 2024.

Marginal note:Requirements

10 A responsible person who has been granted a temporary exemption in respect of a unit under subsection 9(3) must satisfy the following requirements:

• (a) carry out a front end engineering design study by January 1, 2020;

• (b) purchase any major equipment that is necessary for the capture element by January 1, 2021;

• (c) enter into any contract required for the transportation and storage of CO₂ emissions from the unit by January 1, 2022;

• (d) take all necessary steps to obtain all permits or approvals required in relation to the construction of the capture element by January 1, 2022; and

• (e) ensure that the unit, when operating with an integrated carbon capture and storage system, captures CO₂ emissions from the combustion of fossil fuels in the unit in accordance with the laws of Canada or a province that regulate that capture and transports and stores those emissions in accordance with the laws of Canada or a province, or of the United States or one of its states, that regulate that transportation or storage, as the case may be, by January 1, 2024.

Marginal note:Implementation report

• 11 (1) A responsible person who has been granted a temporary exemption in respect of a unit must, for each calendar year following the granting of the temporary exemption, provide the Minister with an implementation report that indicates the unit’s registration number and includes supporting documents that contain the following information:

  • (a) the steps taken during that year to construct the capture, transportation and storage elements of the carbon capture and storage system and to integrate those elements with the unit;

  • (b) any requirement set out in section 10 that was satisfied during that year, along with the information and documents referred to in Schedule 3;

  • (c) a description of the manner in which those steps were carried out or those requirements were satisfied;

  • (d) any changes, with respect to the information most recently provided to the Minister, to the proposed engineering design for the capture element, to the preferred transportation methods or routes or to the preferred storage sites, for the carbon capture and storage system; and

  • (e) a description of any steps necessary, with a schedule for those steps, to achieve the following objectives:

    • (i) the satisfaction of any requirements set out in section 10 that remain to be satisfied, and

    • (ii) the compliance of the responsible person with subsection 3(1) by January 1, 2025 when the unit is operating with an integrated carbon capture and storage system that captures CO₂ emissions from the combustion of fossil fuels in the unit in accordance with laws of Canada or a province that regulate that capture and transports and stores those emissions in accordance with laws of Canada or a province, or of the United States or one of its states, that regulate, as the case may be, that transportation or storage.

• Marginal note:Due date

  (2) The implementation report must be provided by March 31 of the calendar year that follows the calendar year in question.