Ozone depleting substances offset protocol

Description of policy

To help mitigate climate change – one of the most urgent issues of our time – Ontario has implemented a greenhouse gas cap and trade program. A cap and trade program effectively reduces the amount of greenhouse gas pollution going into the atmosphere and creates opportunities for investment by setting a limit on emissions and rewarding innovative companies that can reduce emissions. 

Offset credits, a component of the cap and trade program, will increase the compliance options for capped facilities while allowing those outside of the capped sectors to participate in the cap and trade program through eligible GHG reduction activities.

Ontario is now posting for a 45 day public review and comment period a proposal for the offset protocol covering the collection and destruction of high global warming potential ozone depleting substances (ODS) sourced from within Canada that would have otherwise been released to the atmosphere. The protocol, once finalized, will apply to ODS initiatives located anywhere in Canada. Initiatives must meet the requirements of O.Reg. 539/17 – the Ontario Offset Credits Regulation (The Regulation) and the applicable protocol to be able to be issued offset credits. The Regulation, along with the Protocol Document, which contained the first protocol for landfills came into effect On January 1, 2018.

Ozone Depleting Substances (ODS) Offset Protocol Proposal 
The proposed ODS Protocol will set out the requirements for quantifying and registering a GHG reduction initiative for which an offset credit may be issued, including:

• Eligibility Rules
• GHG Assessment Boundary
• Calculation of Emission Reductions
• Data Management and Project Monitoring
• Reporting

Protocols are a central component of an offset program. They set out the rules for offset initiatives that will ensure that the GHG reductions, removals and avoidances are real, verifiable, quantified, permanent, enforceable and additional to regulatory requirements and standard practice. Together, The Regulation and the protocols set out the requirements that an offset initiative must meet in order to be eligible for the creation and issuance of offset credits. 

Ontario is working with the Climate Action Reserve (CAR) on the development of protocols for use in creating offset credits for Ontario’s carbon market. CAR's process is open to the public and involves significant stakeholder consultation including engagement with stakeholders from key economic sectors, offset market participants, academia, and ENGOs on each protocol. Ontario is also taking into consideration comments of Ontario’s Environment Commissioner in developing all protocols.

The posting of this ODS protocol (along with the mine methane capture protocol) represents an important next step. Ontario will continue work on 10 additional protocols throughout 2018. This work will also involve consulting with our linked partners (Quebec and California) to ensure that our offsets program, including offset protocols, meets the highest possible standards. 

Purpose of policy

The ODS protocol sets out the proposed requirements that once approved will enable ODS offset initiative sponsors to undertake GHG reduction initiatives that may be eligible to be registered and to receive offset credits. 

Ontario offset credits are contemplated under the CCMLEA and O.Reg. 144/16 (the cap and trade regulation) which allow facilities to use offsets to meet up to eight percent of their compliance obligations. 

Other information

The Climate Change Mitigation and Low-carbon Economy Act, 2016 received Royal Assent on May 18, 2016. The Act builds on Ontario’s leadership and ensures a platform for effective long-term action by:

• Establishing targets and requiring an Action Plan detailing how the targets will be achieved;
• Establishing the cap and trade program in law;
• Dedicating all cap and trade proceeds to a new Greenhouse Gas Reduction Account, where they may be used on initiatives that are reasonably likely to reduce or support the reduction of greenhouse gas; and
• Ensuring transparent and accountable action through regular reports and reviews of progress and through the use of allowance auction proceeds.

Other information:

• Ontario's carbon offsets programs website
• Ontario Cap and Trade regulation
• Ontario Offset Credits regulation