Output-Based Pricing System Regulations

Marginal note:Calculated output-based standard

• 37 (1) Subject to subsection (3) and sections 38 and 39, the output-based standard that is applicable to a specified industrial activity of a covered facility, for which an output-based standard must be calculated in accordance with this section, is calculated in accordance with the formula

  

  where

  A

  is the quantity of GHGs that are emitted from the covered facility for reference year “i”, determined in accordance with section 35, expressed in CO₂e tonnes;

  B

  is the allocation for net thermal energy for reference year “i” and is

  • (a) determined by the formula

    0.062 CO₂e tonnes/gigajoules × (M − N) × O

    where

    M

    is the quantity of thermal energy produced by the covered facility that was sold to another covered facility in reference year “i”, as indicated by the quantity of thermal energy on sales receipts or determined by another objective method, expressed in gigajoules,

    N

    is the quantity of thermal energy that was bought from other covered facilities and not subsequently sold in reference year “i”, as indicated by the quantity of thermal energy on sales receipts or by another objective method, expressed in gigajoules, and

    O

    is the ratio of heat from the combustion of fossil fuels to produce thermal energy and is,

    • (i) if M is greater than N, the ratio of heat determined under section 34 for reference year “i” for the covered facility, or

    • (ii) if M is less than N, the ratio of heat determined under section 34 for reference year “i” for the covered facility from which the thermal energy was purchased, and

  • (b) 0 for all reference years if the absolute value of the quotient obtained by dividing the sum of the results determined under paragraph (a) for each reference year “i” by the number of reference years is less than the quotient determined by the formula

    

  C

  is the total quantity of GHGs from all specified industrial activities engaged in at the facility for reference year “i” other than the industrial activity for which the output-based standard is being calculated, determined in accordance with sections 17 and 18;

  D

  is the production from a covered facility from the specified industrial activity for which the output-based standard is being calculated for reference year “i” quantified in accordance with section 31;

  E

  is the GHG emissions reduction factor applicable to the specified industrial activity for which the output-based standard is being calculated and is

  • (a) 95% for a specified industrial activity set out in paragraph 7(c), 8(b) or (c) or 20(d), column 1, of Schedule 1,

  • (b) 90% for a specified industrial activity set out in item 22 or paragraph 23(a) or 29(d), column 1, of Schedule 1, and

  • (c) 80% for all other specified industrial activities;

  F

  is the total quantity of GHGs from an activity engaged in at the facility, for reference year “i”, that is not a specified industrial activity, determined in accordance with sections 17 and 18, if

  • (a) with respect to a covered facility whose primary activity is an industrial activity,

    • (i) that quantity accounts for 20% or more of the total quantity of GHGs from a covered facility for that reference year, determined in accordance with sections 17 and 18, or

    • (ii) the revenue, in dollars, attributable to the sale of the product produced by the facility from that industrial activity accounts for 20% or more of the revenue, in dollars, attributable to the sale of all products produced by the facility from all of the facility’s industrial activities for that reference year, or

  • (b) with respect to a covered facility whose primary activity is not an industrial activity,

    • (i) the activity is not an industrial activity, or

    • (ii) the quantity of GHGs from an industrial activity accounts for 20% or more of the total quantity of GHGs from a covered facility, for that reference year, determined in accordance with sections 17 and 18; and

  G

  is the quantity of CO₂ determined for the purposes of the description B in section 35, from all activities engaged in at the facility for reference year “i” other than the industrial activity for which the output-based standard is being calculated; and

  i

  is the i^th reference year, where “i” goes from 1 to n and where n is the number of reference years, determined in accordance with subsection (2).

• Marginal note:Reference years

  (2) Subject to paragraph (2.1)(a), the reference years applicable to the specified industrial activities that are engaged in at a covered facility for which an emissions limit is calculated for a compliance period are

  • (a) except for a covered facility referred to in paragraph (b),

    • (i) the 2017, 2018 and 2019 calendar years, if the data are available for those years,

    • (ii) the three calendar years preceding the compliance period, if the data are not available for the 2017, 2018, and 2019 calendar years, or

    • (iii) the compliance period, if the data are not available for the years specified in subparagraphs (i) and (ii); and

  • (b) for a covered facility for which an emissions limit is being calculated for the first time but for which the person responsible has submitted an annual report under these Regulations for a previous compliance period without including the information referred to in paragraphs 11(1)(e) and (f) in accordance with subsection 11(2), either

    • (i) the two calendar years preceding the compliance period for which the emissions limit is calculated, if the data are available for those years,

    • (ii) the calendar year preceding the compliance period for which the emissions limit is calculated, if the data are not available for the two calendar years referred to in (i), or

    • (iii) the compliance period for which the emissions limit is being calculated, if that data are not available for those preceding calendar years.

• Marginal note:New activity

  (2.1) For the purposes of subsection (1), if the calculation of the emissions limit for a compliance period takes into account a specified industrial activity that began to be engaged in at the covered facility during that compliance period and for which an output-based standard has not previously been calculated under this section

  • (a) the applicable reference years with respect to that specified industrial activity are that compliance period and the two calendar years following it; and

  • (b) the determination of the output-based standard for that specified industrial activity is to be made based on projections, made using engineering estimates, for the applicable reference years.

• Marginal note:Attributing of emissions

  (2.2) For the purposes of the descriptions of C, F and G in subsection (1), the method used to attribute the quantity of GHGs to an activity must be rigourous, objective and based on sound engineering principles. The same method must be used for each reference year and no quantity of GHGs may be attributed to more than one activity.

• Marginal note:Thermal energy allocation

  (3) For the purposes of subsection (1), if an output-based standard must be calculated with respect to a covered facility for more than one specified industrial activity, the allocation for net thermal energy can only be deducted from one of those calculations.

• Marginal note:Rounding

  (4) The result from the calculation under subsection (1) is rounded to three significant figures.