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

Regulations are current to 2023-09-13

Process for Offset Credit Issuance (continued)

Issuance of Offset Credits (continued)

Marginal note:Notification

 The Minister must notify the proponent of the number of offset credits being issued for each calendar year in the period covered by the report.

Marginal note:Environmental integrity account

  •  (1) The Minister must deposit, for a given calendar year, the number of offset credits equal to the amount determined for C in subsection 29(2) into the environmental integrity account for that calendar year.

  • Marginal note:Restriction

    (2) Offset credits in the environmental integrity account may not be sold or transferred. The credits may only be revoked in accordance with these Regulations.

Errors and Omissions

Marginal note:Errors or omissions — identified by proponent

  •  (1) If, within eight years after submitting a project report, a proponent becomes aware of an error or omission in the report, the proponent must notify the Minister in writing as soon as feasible.

  • Marginal note:Notice from proponent

    (2) The notice must include

    • (a) the project registration number or, in the case of an aggregation of projects, the registration number of the aggregation along with the project registration number for the projects in which an error or omission occurred;

    • (b) a statement indicating whether the error or omission had an impact on the quantity of GHG reductions reported in the project report; and

    • (c) a statement indicating whether the error or omission led to an over-issuance or under-issuance of offset credits.

  • Marginal note:Corrected project report

    (3) The proponent must submit to the Minister

    • (a) a corrected project report within 60 days after the day on which the notice is submitted, if the notice indicates that the error or omission does not impact the quantity of GHG reductions provided in the project report; and

    • (b) a corrected project report along with a verification report, prepared in accordance with section 28, within 90 days after the day on which the notice is submitted, if the notice indicates that the error or omission impacts the quantity of GHG reductions provided in the project report.

  • Marginal note:Contents of corrected report

    (4) The corrected project report must include the information referred to in subsection 20(1), (2) or (3) with respect to the period covered by the report and, under a heading, the following information:

    • (a) the information provided in the original project report that required correction along with a description of the corrections made;

    • (b) a description of the circumstances that led to the error or omission and why the error or omission was not previously detected;

    • (c) a description of the measures that have been and will be implemented to avoid future errors or omissions of the same type;

    • (d) if applicable, the difference between the number of offset credits that were calculated in accordance with section 29 and the number of offset credits that is calculated based on the corrected project report; and

    • (e) a statement indicating whether the aggregate of the errors and omissions constitute a material discrepancy.

  • Marginal note:Declaration

    (5) The corrected project report must be accompanied by a declaration, dated and signed by the proponent or their authorized official, stating that the information contained in the report is accurate and complete.

Marginal note:Errors or omissions — identified by Minister

 If, within eight years after a project report has been submitted under these Regulations, the Minister is of the opinion that there is an error or omission that requires a corrected report to be submitted, the Minister must require the proponent to submit

  • (a) if the error or omission did not have an impact on the quantity of GHG reductions reported in the project report, a corrected project report within 60 days after the day on which the Minister required it; and

  • (b) if the error or omission had an impact on the quantity of GHG reductions reported in the project report, a corrected project report, accompanied by a verification report prepared in accordance with section 28, within 90 days after the day on which the Minister required it.

Marginal note:Under-issuance

 If a corrected project report indicates that an under-issuance of offset credits was issued for a calendar year, the Minister must issue to the proponent the number of offset credits for that calendar year that is equal to the difference referred to in paragraph 32(4)(d) for that calendar year and deposit a corresponding number of credits into the environmental integrity account.

Marginal note:Over-issuance

  •  (1) If a corrected project report indicates that there was an over-issuance of offset credits, the proponent must remit to the Minister, with the corrected report, the number of offset credits that is equal to the difference referred to in paragraph 32(4)(d).

  • Marginal note:Manner of compensation

    (2) If the proponent does not remit the number of offset credits required under subsection (1), the Minister may

    • (a) for the purposes of section 180 of the Act, revoke a number of offset credits and that are in the proponent’s GHG Offset Credit System account, issued with respect to the project, equal to the number of offset credits necessary to make up the difference; and

    • (b) if the number of offset credits remitted by the proponent under subsection (1) or revoked under paragraph (a) is less than the number of offset credits necessary to make up the difference,

      • (i) for the purposes of subsection 181(1) of the Act, require the proponent to remit compliance units by notifying the them of the number of compliance units to be remitted and the deadline by which the remittance is to be made, and

      • (ii) where the proponent does not remit compliance units in accordance with subparagraph (i) or make a payment in lieu of remitting compliance units thereof under subsection 181(3) of the Act, revoke, for the purposes of section 180 of the Act, offset credits in the environmental integrity account to make up the difference.

  • Marginal note:Environmental integrity account

    (3) The Minister may, for the purposes of section 180 of the Act, revoke a number of offset credits in the environmental integrity account that is equal to the number of offset credits deposited into that account as a result of the error or omission.

  • Marginal note:Manner of remittance

    (4) Subject to subsection (5), the compliance units remitted to the Minister for the purposes of subparagraph (2)(b)(i), in accordance with subsection 181(2) of the Act, must

    • (a) in the case of offset credits or units or credits recognized as compliance units under a regulation made under the Act, have been issued for GHG reductions that occurred within the eight calendar years before the deadline indicated in the notice provided under that subparagraph; and

    • (b) in the case of surplus credits, have been issued within five calendar years before the deadline indicated in the notice provided under that subparagraph.

  • Marginal note:Surplus credits

    (5) If a proponent is required to remit compliance units, the proponent may remit surplus credits if those surplus credits were issued to a covered facility located in a province listed in Part 2 of Schedule 1 to the Act in the calendar year during which the Minister notified the proponent under subparagraph (2)(b)(i) of the requirement to remit compliance units.

Marginal note:Suspension — error or omission

  •  (1) For the purposes of subsection 180(1) of the Act, if the Minister is of the opinion, based on a notice referred to in subsection 32(2) or in accordance with section 33, that an error or omission resulted in the over-issuance of offset credits, the Minister may suspend offset credits for the applicable project in the proponent’s GHG Offset Credit System account.

  • Marginal note:Notice of suspension

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

  • Marginal note:Lifting of suspension

    (3) The Minister must lift the suspension if the number of compliance units remitted or revoked, or payments made under section 35, compensate for the amount of the over-issuance.

Reversals

Marginal note:Proponent’s notice of reversal

  •  (1) If a proponent of a sequestration project — other than a sequestration project for which the tonne-year quantification method is used — becomes aware of a reversal, they must, without delay, notify the Minister in writing, and include the following information with the notice:

    • (a) the project registration number, or in the case of an aggregation of projects, the registration number of the aggregation along with the project registration numbers for the projects in respect of which a reversal occurred;

    • (b) the date on which the reversal started, the date on which the GHGs stopped being released, if applicable, and a description of the circumstances and causes of the reversal; and

    • (c) the steps taken to contain the reversal or prevent the release of additional GHGs.

  • Marginal note:Reversal report

    (2) The proponent must, within 18 months after the date of the notice, submit to the Minister a reversal report, together with a verification report, that includes the following information:

    • (a) the registration number of the project;

    • (b) the title of the applicable protocol and, if more than one version of the protocol is included in the Compendium of Federal Offset Protocols, the date of the applicable version;

    • (c) the circumstances and causes of the reversal;

    • (d) the location within the geographic boundaries of the project where the reversal occurred;

    • (e) the date on which the reversal started and, if applicable, the date on which the GHGs stopped being released;

    • (f) the list of reversal risk mitigation measures and monitoring activities implemented since the last monitoring report but prior to the reversal, along with the date of their implementation;

    • (g) the quantity of GHGs released into the atmosphere during the reversal up to the date the report is prepared, determined in accordance with the protocol, expressed in CO2e tonnes; and

    • (h) the data, values and calculations used to quantify the GHGs released into the atmosphere, that are specified in paragraph (g).

  • Marginal note:Aggregation of projects

    (3) For the purposes of an aggregation of projects, the reversal report referred to in subsection (2) must contain the following information:

    • (a) the registration number of the aggregation of projects along with the project registration numbers for the projects in respect of which a reversal occurred;

    • (b) the title of the applicable protocol and, if more than one version of the protocol is included in the Compendium of Federal Offset Protocols, the date of the applicable version; and

    • (c) the information referred to in paragraphs (2)(c) to (h) for the projects within the aggregation in respect of which a reversal occurred.

  • Marginal note:Declaration

    (4) The reversal report must be accompanied by a declaration, dated and signed by the proponent or their authorized official, stating that the information contained in the report is accurate and complete.

Marginal note:Suspension of offset credits

 If, for the purposes of subsection 180(1) of the Act, the Minister suspends offset credits in the proponent’s GHG Offset Credit System account — either because the Minister has received notice from a proponent that a reversal has occurred or because he or she has reasonable grounds to suspect that a reversal has occurred —, the Minister must notify the proponent of the suspension and its effective date.

Marginal note:Information to the Minister

  •  (1) If the Minister suspends offset credits in the proponent’s GHG Offset Credit System account because the Minister has reasonable grounds to suspect that a reversal has occurred, the proponent must, within 60 days after the date the notice referred to in section 38 is received, submit to the Minister the information referred to in subsection 37(1) and, if the proponent contests that a reversal has occurred, submit the list of reversal risk mitigation measures and monitoring activities that were implemented since the submission of the last monitoring report and a declaration by the proponent that the reversal risk management plan was implemented and that no reversal occurred.

  • Marginal note:Minister’s decision

    (2) The Minister must notify the proponent of the Minister’s decision with respect to whether or not a reversal has occurred.

  • Marginal note:Reversal report

    (3) If the Minister determines that a reversal has occurred, the proponent must, within 18 months after the date of the notice referred to in subsection (2) is received, submit to the Minister the reversal report set out in subsection 37(2) and the declaration specified in subsection 37(4), together with a verification report.

Marginal note:Evaluation of reversal

  •  (1) Following receipt of the reversal report, the Minister must determine whether the cause of the reversal was within the control of the proponent and whether there was a failure to implement a reversal risk management plan.

  • Marginal note:Voluntary reversal

    (2) If the Minister determines that the cause of the reversal was within the control of the proponent or there was a failure to implement a reversal risk management plan, the Minister may

    • (a) for the purposes of section 180 of the Act, revoke any offset credits in the proponent’s GHG Offset Credit System account for the project in respect of which the reversal occurred and a number of offset credits in the environmental integrity account equal to the number of offset credits deposited into that account in respect of the project;

    • (b) if the number of offset credits revoked from the proponent’s GHG Offset Credit System account for the project under paragraph (a) is less than the number of offset credits issued to the proponent in respect of the project,

      • (i) for the purposes of subsection 181(1) of the Act, require the proponent to remit compliance units by giving them notice indicating the number of compliance units to be remitted and the deadline by which the remittance is to be made, and

      • (ii) where the proponent does not remit compliance units in accordance with subparagraph (i) or make a payment in lieu under subsection 181(3) of the Act, revoke, for the purposes of section 180 of the Act, offset credits in the environmental integrity account to make up the difference; and

    • (c) cancel the registration of the project in accordance with paragraph 14(1)(e).

  • Marginal note:Manner of remittance

    (3) Subject to subsection (4), the compliance units remitted to the Minister under subparagraph (2)(b)(i), in accordance with subsection 181(2) of the Act, must

    • (a) in the case of offset credits or units or credits recognized by a regulation made under the Act, have been issued for GHG reductions that occurred within the eight calendar years before the deadline indicated in the notice provided under that subparagraph; and

    • (b) in the case of surplus credits, have been issued within five calendar years before the deadline indicated in the notice provided to the proponent.

  • Marginal note:Surplus credits

    (4) In the case where a proponent is required to remit compliance units, the proponent may remit surplus credits if those surplus credits were issued to a covered facility located in a province listed in Part 2 of Schedule 1 to the Act in the calendar year the Minister notified the proponent under subparagraph (2)(b)(i) of the requirement to remit compliance units.

  • Marginal note:Involuntary reversal

    (5) If the Minister determines that the cause of the reversal was not within the proponent’s control and there was no failure to implement the reversal risk management plan, the Minister may

    • (a) lift any suspension;

    • (b) revoke, for the purposes of section 180 of the Act, the number of offset credits in the environmental integrity account that corresponds to the lesser of the quantity of the GHGs released into the atmosphere during the reversal and the quantity of offset credits that have been issued in respect of the project; and

    • (c) if applicable, cancel the registration of the project in accordance with paragraph 14(1)(f).

 
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