Developing a voluntary carbon offsets program for Ontario

ERO number
013-1634
Notice type
Policy
Posted by
Ministry of the Environment and Climate Change
Transferred to
Ministry of the Environment, Conservation and Parks
Notice stage
Decision
Decision posted
Comment period
November 30, 2017 - January 15, 2018 (46 days) Closed
Last updated

This consultation was open from:
November 30, 2017
to January 15, 2018

Decision summary

We have made a decision to proceed with developing the Ontario voluntary carbon offsets program. Voluntary carbon offset credits are an additional mechanism to encourage greenhouse gas reductions (GHG) in Ontario beyond the coverage of the cap and trade program.

Decision details

This notice is regarding the development of a program that enables the creation of carbon offset credits in Ontario’s voluntary carbon offsets program. It does not relate to offset credits (compliance offsets) for use in Ontario’s cap and trade program.

A policy proposal and accompanying discussion paper on the voluntary carbon offsets program were posted to the Environmental Registry on November 30, 2017. Based on the feedback received, a decision has been made to proceed with the development of the Ontario voluntary carbon offsets program. Comments received have been carefully considered and have informed the development of a program framework. In addition, this framework integrates contributions from technical working groups who provided scientific and technical expertise and traditional knowledge. This notice summarizes Ontario’s voluntary carbon offsets program framework.

The Ontario program framework provides:

  • Project desirability criteria
    • Three GHG quantification methodologies
    • Co-benefits objectives that support the UN Sustainable Development Goals
    • Project eligibility date

The framework integrates contributions from technical working groups who provided scientific expertise, technical input and traditional knowledge. This notice summarizes Ontario’s voluntary carbon offsets program framework.

The voluntary offsets program will be supported by a registry. Registry infrastructure and services will facilitate project registration, and tracking and retirement of voluntary carbon offset credits.

The voluntary carbon offsets program is separate and distinct from the compliance offsets program and capped emitters will not be able to use voluntary carbon offset credits to meet their compliance obligations. More information on the compliance offsets program can be found by viewing the Ontario Offsets Credits Regulation decision notice posting.

Project desirability criteria

Project desirability criteria have been identified to support development of projects for participation in the Ontario voluntary carbon offsets program including:

  • Quantifiable GHG reductions/removals/sequestration
  • Demonstrated environmental and community co-benefits
  • Eligibility date

GHG quantification

In accordance with international standards, eligible project developers that wish to apply and be eligible for Ontario voluntary carbon offset credits will be required to demonstrate a reduction/avoidance/sequestration of greenhouse gases that is real, additional, permanent, verifiable, quantifiable and unique. These are common criteria that are shared across many carbon offsets programs, including compliance offsets programs, but meeting these criteria does not qualify voluntary offset projects for use as compliance credits under Ontario’s cap and trade program.

To facilitate offset project development within the Ontario voluntary carbon offsets program, three GHG quantification methodologies have been identified for use:

These generic methodologies are rigorous, market-tested and will enable maximum flexibility in project creation. This “open-architecture” approach enables the adoption of other GHG quantification methodologies, and applicable Ontario protocols as they become available.  

Co-benefits

Increasingly, governments, communities and businesses are considering the value of the services provided by ecosystems and natural capital. Building Ontario’s natural capital is a key feature of Ontario’s voluntary carbon offsets program. The development of a separate, quality, branded voluntary offset class provides an opportunity to mitigate climate change by leveraging land-use activities in Ontario. By focusing on land-use to fight climate change, this program will recognize the value of ecosystem services and associated environmental co-benefits.

Co-benefits are additional benefits beyond GHG reduction/avoidance/sequestration that occur when a project is implemented, such as capturing and filtering rainwater to reduce flood risk, run-off and nutrient loading to the Great Lakes. In addition to demonstrating reduction/avoidance/sequestration of greenhouse gases, eligible project developers will be required to identify environmental and community co-benefits in Ontario that will be realized as a result of their project.

To facilitate identification of co-benefits in project development, the Ontario voluntary carbon offsets program framework will utilize the United Nations Sustainable Development Goals (UN SDGs). These UN SDGs have been considered within an Ontario context and five objectives have been developed:

  1. Support sustainable and healthy communities through clean air, water and land
  2. Improve community and climate resilience and adaptive capacity
  3. Support and enhance biodiversity conservation by restoring and conserving ecosystems and species
  4. Support resource efficient, innovative, high-productivity, low carbon communities
  5. Protect sites, habitats and landscapes of cultural, archaeological or historical significance

Eligibility date

Voluntary carbon offset credits will only be provided for eligible projects commenced on or after January 1, 2007. Voluntary offset credits may be awarded to eligible projects for GHG reductions/avoidances/sequestration occurring on or after January 1, 2007.

Carbon neutrality commitment

Ontario’s Climate Change Strategy and Five Year Climate Change Action Plan (CCAP) 2016 – 2020 have been developed in order to tackle the complex challenge of climate change. The CCAP sets out the various actions that the Ontario government will undertake to mitigate the effects of climate change across our province. The Ontario government is leading by example and has committed to make government operations carbon neutral beginning in 2018. Ontario will achieve this by reducing GHG emissions across our facilities, operations and procurement. The government’s annual carbon footprint is approximately 200,000 tonnes of carbon dioxide equivalent (CO2e), based on 2015-16 estimates. Building on progress to make government operations carbon neutral, a procurement process will be launched in Fall 2018 to offset these emissions through the Ontario voluntary carbon offsets program.

Comments received

Through the registry

16

By email

19

By mail

0
View comments submitted through the registry

Effects of consultation

The Ministry has reviewed all submissions and comments received during the consultation period.

The following provides a summary of key comments received with corresponding responses.

Offset quality and supply

Comment: Respondents indicated that Ontario voluntary carbon offsets should be as rigorous in quality and standard as those generated by international offsets programs.

Response: Three GHG quantification methodologies have been identified for use for anyone who wants to be eligible to create voluntary carbon offsets projects to reduce, avoid, or sequester GHGs. These methodologies are rigorous, market-tested and will enable maximum flexibility in project creation.

Comment: Some respondents indicated that specific co-benefits such as biodiversity conservation should be prioritized while others indicated that co-benefits should be prioritized according to community or regional need.

Response: To facilitate identification of co-benefits during project development, five objectives have been established which incorporate the United Nations Sustainable Development Goals (UN SDGs) and provincial environmental and community priorities.

Comment: Respondents indicated that specific project types should be prioritized or an open framework should be created to allow for the inclusion of project types based on desirable attributes.

Response: The program will promote and enable innovation by using an “open architecture” framework that identifies desirable attributes and is not limited by project type. 

Program participation

Comment: Some respondents indicated that project development costs associated with monitoring, reporting and verification may pose barriers to participation, particularly for smaller projects.

Response: To address potential barriers to participation, methods such as aggregation and streamlined reporting are being evaluated.

Comment: Some respondents indicated that increased education and knowledge related to carbon offsets is required to enable participation in the Ontario voluntary carbon offset program.

Response: Informational resources and guidance materials are being developed, in addition to outreach activities to support capacity building and promote program participation.

Comment: Respondents indicated that the program should allow for participation of projects that have already occurred.

Response: Voluntary carbon offsets may be awarded to eligible projects for GHG reductions/avoidances/sequestration occurring on or after January 1, 2007 that are created and documented according to program requirements.

End markets

Comment: Some respondents indicated that the program should promote broad buyer participation.

Response: The development of a separate, quality, branded voluntary offset class will provide an additional mechanism for those who are not subject to obligations under the cap and trade program, such as the Ontario government, the private sector and others, to reduce, offset or neutralize their greenhouse gas (GHG) emissions. In addition, infrastructure, including registry services, for the Ontario voluntary carbon offsets program will help facilitate broad market participation.

Comment: Respondents indicated that offsets created within the program should be tradable in other markets and on different registries.

Response: The Ontario voluntary carbon offsets program will use an “open architecture” approach that enables the adoption of existing market-tested carbon quantification methodologies. In addition, the Ontario voluntary carbon offsets program requires environmental and community co-benefits to be realized as a result of offset project development, in recognition of global voluntary market trends which demonstrate a preference for additional community and environmental co-benefits that are visible and quantifiable. The program will also consider the guidelines being developed under the Pan Canadian Framework on Clean Growth and Climate Change to promote the transferability of GHG offset credits developed by different programs across Canada.

Additional priorities and objectives

Comment: Respondents indicated that the government should provide leadership on carbon neutrality, including releasing a government carbon neutrality strategy.

Response: The government is leading by example and has committed to carbon neutrality beginning in 2018. Ontario’s Five Year Climate Change Action Plan 2016-2020 outlines actions that will be taken to reduce greenhouse gas pollution across government facilities, operations and procurement.

Comment: Respondents indicated that there must be a clear differentiation between the Ontario compliance and voluntary carbon offset programs.

Response: Ontario voluntary carbon offset credits will not be eligible for use under the cap and trade program. The Ontario voluntary carbon offsets program is distinct and unique because it requires projects to demonstrate additional environmental and community co-benefits that will be realized beyond achieving GHG reductions.

Supporting materials

View materials in person

Important notice: Due to the ongoing COVID-19 pandemic, viewing supporting materials in person is not available at this time.

Please reach out to the Contact listed in this notice to see if alternate arrangements can be made.

Program Planning and Implementation Branch
Address

135 St. Clair Avenue West
11th floor
Toronto , ON
M4V 1P5
Canada

Office phone number

Connect with us

Contact

Vidya Anderson

Phone number
Office
Program Planning and Implementation Branch
Address

135 St. Clair Avenue West
11th floor
Toronto , ON
M4V 1P5
Canada

Office phone number

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Original proposal

ERO number
013-1634
Notice type
Policy
Posted by
Ministry of the Environment and Climate Change
Proposal posted

Comment period

November 30, 2017 - January 15, 2018 (46 days)

Proposal details

Description of policy

This notice is regarding the development of a program that enables the creation of carbon offset credits in Ontario’s voluntary carbon offsets program. It does not relate to offset credits (compliance offsets) for use in Ontario’s cap and trade program.

Across Ontario we have seen an increase in prolonged heat waves, torrential rain storms, windstorms, even drought. These events have become more common – a clear sign of a shift in our weather patterns. This shift is called ‘climate change.’ It threatens our health and safety, our environment and our economy. Ontario is experiencing the impacts of climate change, which range from damaged infrastructure, extreme weather events such as flooding, to the reduced ability to grow food in some regions.

Ontario has developed a Five Year Climate Change Action Plan (CCAP) 2016 – 2020 to fight climate change. This Action Plan outlines the various activities that the government will undertake to mitigate the effects of climate change across our province, which includes making government operations carbon neutral beginning in 2018. To this end, the Ministry of the Environment and Climate Change has been directed by the Premier’s mandate letter and the 2017 Budget to develop a separate quality, branded, voluntary carbon offset class for use by government, the private sector and others, as an additional way to enable market participants to reduce their greenhouse gas (GHG) emissions. This will support the government’s carbon-neutral commitment and enable the private sector and others to demonstrate climate leadership by reducing both their carbon and ecological footprints.

The proposed voluntary carbon offsets program is separate and distinct from the proposed compliance offsets program and capped emitters will not be able to use voluntary carbon offset credits to meet their compliance obligations under the cap and trade program. For more information on the proposed compliance offsets program, please see the regulation proposal notice posting. Under the proposed voluntary carbon offsets program, offset projects that wish to be issued voluntary carbon offset credits would be undertaken in accordance with a GHG quantification protocol approved by Ontario.

The development of a separate, quality, branded voluntary offset class provides a unique opportunity to leverage land-use activities to fight climate change and integrate ‘beyond carbon benefits’ such as environmental co-benefits like flood management into the design of this program. As we consider the role of land-use in mitigating climate change, we must also think of the complex interactions of natural systems and other important services they provide. Ecosystems provide many basic services that make human life possible such as flood protection and erosion control provided by trees; air and water purification and natural cooling on hot days provided by forests and wetlands; and pollination by bees of plants and flowers that provide us with food. These processes work together to make ecosystems healthy, sustainable, functional and resilient to climate change. Recognizing the importance of the complex interdependencies between natural and human systems and the need for a holistic, ecosystems-based approach is a message that the ministry has heard often in discussions with Indigenous partners. As such, the proposed voluntary carbon offsets program will support objectives outlined in Ontario’s Climate Change Strategy, including commitments to:

  • Improve the resilience of our communities to climate change;
  • Increase our natural capital; and
  • Protect valuable agricultural lands, natural resources and ecosystems for the future.

Increasingly, governments, communities and businesses are considering the value of services provided by ecosystems and the value of natural capital. These services are often invisible in the way we measure economic growth, but are critical to our province’s prosperity.

Ontario’s proposed voluntary carbon offsets program will create a clear set of rules and requirements for anyone who wants to facilitate the creation of carbon offsets projects and to sell the credits generated from these projects to others. Ontario’s program for quality branded voluntary carbon offsets would:

  • Provide a mechanism for government, the private sector and others to reduce both their carbon and ecological footprints;
  • Facilitate participation by Indigenous, northern and agricultural communities and municipalities in the carbon market;
  • Promote additional environmental co-benefits; and
  • Drive innovation and support the transition to a low carbon economy.

Climate change does not respect national or provincial borders and GHG emissions anywhere affect people everywhere. Ontario’s proposed voluntary carbon offsets program aligns with Canada’s national and international climate change objectives and initiatives, including the Pan Canadian Framework on Clean Growth and Climate Change as well as the international global development objectives defined by the United Nations’ Sustainable Development Goals.

MOECC is engaging with Indigenous organizations, stakeholders and others to inform key components of the design and development of the proposed voluntary carbon offsets program including:

  • Developing and/or adapting offset project methodologies; and
  • Potential community-based pilot projects.

The discussion paper accompanying this post outlines the key elements of Ontario’s proposed voluntary carbon offsets program for the purpose of public consultation. It also presents questions to guide discussion and comment. Input received through this process will be used to inform the design of Ontario’s voluntary carbon offsets program.

Purpose of policy

The purpose of the voluntary carbon offsets program is to develop a separate, quality, branded, class of offsets that the Ontario government, the private sector and others can use to reduce both their carbon and ecological footprints.

Public consultation

This proposal was posted for a 46 day public review and comment period starting November 30, 2017. Comments were to be received by January 15, 2018.

All comments received during the comment period are being considered as part of the decision-making process by the Ministry.

Please Note: All comments and submissions received have become part of the public record.

Supporting materials

View materials in person

Important notice: Due to the ongoing COVID-19 pandemic, viewing supporting materials in person is not available at this time.

Please reach out to the Contact listed in this notice to see if alternate arrangements can be made.

Program Planning and Implementation Branch
Address

135 St. Clair Avenue West
11th floor
Toronto , ON
M4V 1P5
Canada

Office phone number

Comment

Commenting is now closed.

This consultation was open from November 30, 2017
to January 15, 2018

Connect with us

Contact

Vidya Anderson

Phone number
Office
Program Planning and Implementation Branch
Address

135 St. Clair Avenue West
11th floor
Toronto , ON
M4V 1P5
Canada

Office phone number