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

Regulations are current to 2022-08-08 and last amended on 2022-05-20. Previous Versions

Compensation and Compliance Units (continued)

Remittance of Compliance Units

Marginal note:Surplus credits

  •  (1) Subject to subsection (2), any surplus credit may be remitted to the Minister for the purposes of subsection 174(1) or paragraph 178(1)(a) of the Act if the credit was issued no more than five calendar years before the remittance.

  • Marginal note:Details — removal of province

    (2) The surplus credit must have been issued in respect of a facility that is located in a province that was listed in Part 2 of Schedule 1 to the Act for at least one day during the compliance period for which the credit is being remitted.

Marginal note:Other compliance units

 Any recognized unit or credit or offset credit may be remitted to the Minister for the purposes of subsection 174(1) or paragraph 178(1)(a) of the Act if the unit or credit, as the case may be, was issued for GHG reductions or removals that occurred no more than eight calendar years before the remittance.

Suspension and Revocation

Marginal note:Suspension — reasonable grounds

  •  (1) For the purposes of subsection 180(1) of the Act, the Minister may suspend a surplus credit in an account if the Minister has reasonable grounds to believe that the credit

    • (a) was already used;

    • (b) was issued on the basis of false or misleading information; or

    • (c) is no longer valid.

  • Marginal note:Suspension — removal of province

    (1.1) For the purposes of subsection 180(1) of the Act, the Minister may suspend all surplus credits

    • (a) that were issued in respect of a covered facility that is located in a province that was listed in Part 2 of Schedule 1 to the Act but is no longer listed in that Part; and

    • (b) that are in an account in the tracking system that is linked to a facility that is located in a province that is no longer listed in Part 2 of Schedule 1 to the Act and ceased being a covered facility at the time when the name of the province in which it is located was removed from Part 2 of Schedule 1 to the Act.

  • Marginal note:Notice

    (2) The Minister must, without delay, notify the holder of the account of the suspension of the credit, the reasons for the suspension and the date on which it takes effect.

  • Marginal note:Response

    (3) If a credit was suspended on any of the grounds listed in subsection (1), the holder of the account may, within 30 days after the day on which the Minister’s notice under subsection (2) is issued, submit to the Minister their reasons why the credit should not be suspended.

  • Marginal note:Conditional removal of suspension

    (4) The person responsible for a facility who holds an account that is linked to the facility in the tracking system in which there remain surplus credits that were suspended as a result of the name of a province being removed from Part 2 of Schedule 1 to the Act may make a request to the Minister to lift the suspension of those surplus credits if the surplus credits are to be provided as compensation for the facility’s excess emissions under subsection 174(1) of the Act or paragraph 178(1)(a) of the Act, in respect of a compliance period during which the facility was a covered facility.

Marginal note:Revocation

 The Minister must, after the period set out in subsection 72(3), thoroughly review the reasons for the suspension that are set out in subsection 72(1) and notify the holder of the account that

  • (a) if the Minister determines that the reasons for the suspension are well-founded, the surplus credit is revoked; or

  • (b) the suspension of the credit is lifted.

Marginal note:Request for cancellation

 A request under subsection 180(2) of the Act to cancel a surplus credit or offset credit must be made to the Minister in writing and include the serial number of the credit to be cancelled.

Issuance Error or Invalidity

Marginal note:Application of subsection 181(1) of the Act

  •  (1) If the Minister requires a person, under subsection 181(1) of the Act, to remit a compliance unit, the Minister must provide the person a notice indicating the reason for the remittance, the number of compliance units to be remitted and the deadline by which the remittance is to be made.

  • Marginal note:Manner of remittance

    (2) The compliance units remitted to the Minister under subsection 181(2) of the Act must

    • (a) in the case of surplus credits, have been issued within five calendar years before the deadline indicated in the notice provided under subsection (1) and have been issued in respect of a covered facility located in a province that was listed in Part 2 of Schedule 1 to the Act for at least one day during the compliance period for which the credit is being remitted; and

    • (b) in the case of recognized units or credits or offset credits, have been issued for GHG reductions or removals that occurred within the eight calendar years before the deadline indicated in the notice provided under subsection (1).

Tracking System

Marginal note:Accounts for participants

 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

  •  (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

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

    • (a) by a province or territory or by a program authority on behalf of a province or territory; and

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

  • 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, no more than 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; and

    • (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.

Transitional Provisions

Marginal note:Subsection 12(3)

 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

 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

  •  (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

 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

 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

 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

 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

  •  (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.

 
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