RE: Clean Air Council Input…

RE: Clean Air Council Input on ERO # 019-5816: Development of a Clean Energy Credit Registry

Dear Ms. Lewyckyj:

The Clean Air Council and Clean Air Partnership appreciate the opportunity to provide input on
the development of a Province of Ontario Clean Energy Credit registry. The Clean Air Council
(CAC) is a network of over 35 Ontario municipalities working collaboratively on clean air and
climate change actions. Clean Air Partnership (CAP), a charitable environmental organization,
facilitates the CAC network. The below input and recommendations represent the consensus
feedback from staff member representatives of CAC member municipalities.[i]

A regulated clean energy credit market has the potential to support decarbonization of
Ontario’s electricity system IF the framework ensures the criteria of additionality is met.
Additionality serves as the foundational principle of a robust credit and offset market. The
additionality principle requires that the sale of a credit results in supporting the addition of
clean energy supply that would NOT have occurred without the revenue of the sale of the
credit. This principle means that Clean Energy Credit should be limited to new clean energy
credits. It should also only consider the sale of credits that are additional to the sellers’ own
greenhouse gas reduction commitments.

Without these two core principles being part of the Clean Energy Credit system, there is
significant risk that the Clean Energy Credit Registry can result in increased greenhouse gas
emissions and greenwashing risks, thereby undermining the credibility of the overall Clean
Energy Credit system. The additionality principle was also identified by the IESO which has
advised that credits that do meet the additionality requirement run the risk of being considered
greenwashing and risking the reputation and value of credits within the whole Clean Energy
Credit Registry[ii].

The Clean Air Council is concerned therefore that at present the proposal for the Registry
includes the allowance for the sale of Carbon Energy Credits based on existing generation under
contract. Carbon Energy Credits sold under existing generation assets do not meet the
additionality criteria and are also not likely to be in addition to the Province’s 2030 GHG
reduction commitments. Therefore, they are likely to be required to be allocated/retired to
make progress towards the Province of Ontario own 2030 GHG reduction target commitments.
If existing generation assets under contract are allowed to generate Clean Energy Credits it is
recommended that those credits be retired on behalf of customers, Ontarians and the
Province’s 2030 GHG reduction commitment.

Therefore, the Clean Air Council supports the creation of a Clean Energy Credit Registry for
Ontario provided that the Registry ensures a robust requirement regarding the
principle/criteria of additionality.