The Ministry of Environment,…

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The Ministry of Environment, Conservation and Parks (MECP) is proposing regulatory changes to Ontario’s Greenhouse Gas emissions program to harmonize with federal regulatory requirements to reduce unnecessary costs and regulatory burden for reporters.

However, the change to the verification requirements that were made as part of the complementary amendments to the Reporting Regulations to support O.Reg 241/19: Greenhouse Gas Emissions Performance Standards on July 4, 2019 creates unnecessary costs and regulatory burden for certain reporters. The verification requirements were amended to only apply to facilities registered in the EPS, including those who opt-in to the program. This is demonstrated in O.Reg 390/18: Greenhouse Gas Emissions: Quantification, Reporting and Verification Section 12(1) where the duty to verify is with covered facilities. Covered facilities are defined in the Regulations as having the same meaning as in O.Reg 241/19: Greenhouse Gas Emissions Performance Standards. This amended provision to the Reporting Regulations applies even if the EPS program is not in effect. Therefore starting with 2019 emissions reports due in June 2020 registered EPS facilities are required to verify their reports.

Having a verification requirement and costs for a program that is not in effect creates unnecessary costs and regulatory burden for smaller opt-in facilities. Many smaller industrial facilities in Ontario with emissions of 10,000 tonnes of CO2e and above have chosen to opt-in to the Federal Output-Based Pricing System (OBPS) as voluntary participants to reduce costs under the federal carbon pricing program. It would therefore be important for OBPS voluntary participants to be registered under the EPS to avoid the exposure to the Federal Fuel Charge in the event the Federal OBPS is removed in Ontario. However, the verification requirement and costs triggered by EPS registration has prevented smaller facilities from registering in the EPS at this time. These facilities have verification requirements under the OBPS and therefore an additional verification requirement under the EPS is costly and burdensome, especially since the deadlines do not align.

In order to ensure that smaller industrial emitters are covered under the EPS in the event the Federal OBPS is removed, the verification requirements for these facilities should not be applicable until the EPS program is in effect in the province. We propose that emission verification is required for entities that emit less than 50,000 tonnes CO2e only at such time as the EPS replaces the OBPS. This would allow the smaller emitters to register for the EPS program without the burden of this verification requirement until such time as EPS replaces the OBPS. This would support Ontario’s objective of encouraging emission reductions from the industrial sector while maintaining competitiveness of Ontario business and minimizing carbon leakage.