Making polluters accountable: Industrial Emission Performance Standards

ERO number
013-4551
Notice type
Regulation
Act
Environmental Protection Act, R.S.O. 1990
Posted by
Ministry of the Environment, Conservation and Parks
Notice stage
Proposal
Proposal posted
Comment period
February 12, 2019 - March 29, 2019 (45 days) Closed
Last updated

This consultation was open from:

February 12, 2019
to March 29, 2019

Proposal summary

We are consulting on Ontario’s proposed Emissions Performance Standard (EPS) to ensure polluters pay their fair share for their greenhouse gas emissions, while also ensuring industry continues to make advances to help Ontario achieve its share of Canada’s 2030 target.

Proposal details

Emissions Performance Standards are part of Ontario’s commitment in Preserving and Protecting our Environment for Future Generations to regulate industrial emissions.

Ontario’s Environment Plan includes the development of Emissions Performance Standards (EPS) to:

  • encourage the industrial sector to reduce greenhouse gas emissions
  • maintain competitiveness of Ontario businesses
  • minimize carbon leakage – the risk of production leaving the province for other jurisdictions with less stringent climate policies.

Implementing an Ontario EPS will provide flexibility for Ontario circumstances as an alternative to the federal output based pricing system (OBPS) portion of the federal Greenhouse Gas Pollution Pricing Act, while Ontario’s constitutional reference regarding the GGPPA is pending.

Proposed Emissions Performance Standards

Ontario is considering flexible compliance mechanisms that would include receiving compliance units as an incentive for performing better than the standard, for voluntary emission reductions by others, or payments to purchase compliance units from the government.

Any payments we collect under the program could contribute to a greenhouse gas (GHG) fund focused on supporting industry in greenhouse gas emission reductions.

Consulting on the proposed EPS

We welcome comments on the following components of the proposed EPS:

1. Program scope

At a minimum, we propose to regulate the same sectors to be covered by the federal output based pricing system (OBPS) to:

  • simplify reporting and compliance and
  • provide clarity for Ontario businesses

We are also considering including additional sectors in the program such as:

  • institutions
  • greenhouse operators
  • thermal energy supply

We look forward to comments from these sectors regarding potential inclusion.

2. Emissions threshold and opt-in provision

We propose to establish:

  • a mandatory emissions threshold at either 25,000 or 50,000 tonnes of carbon dioxide equivalent (CO2e) per year
  • facilities with GHG emissions between 10,000 tonnes of CO2e per year and the mandatory threshold would be allowed to voluntarily participate (opt-in) to the program beginning in 2019
  • complementary amendments would be made to the Greenhouse Gas Emissions: Quantification, Reporting and Verification regulation (O. Reg. 390/18) to align the verification threshold with the mandatory threshold for the EPS program.

3. Competitiveness/ carbon leakage risk assessment and determination of stringency factor

We propose to establish separate standards for fixed process and non-fixed emissions. This allows different stringency factors to be applied since fixed process emissions are harder to reduce. The stringency factors will also account for the risk of carbon leakage.

We propose to use emissions intensity and trade exposure to determine carbon leakage risk.

4. Compliance obligations/ flexibility mechanisms

We are intending to have the program in place by Summer 2019 and to have it apply to emissions as of January 1, 2019. Regulated facilities under the Ontario EPS would have to:

  • submit an annual compliance report in June in respect of the GHG emissions for the previous year (emissions from January 1 to December 31)
  • demonstrate compliance annually, starting in December 2020, with respect to the previous year’s emissions.

A facility’s compliance obligation would be the difference between the facility’s total emissions and its Annual Emission Limit (AEL).

A facility could meet the EPS by:

  • reducing their GHG emissions
  • purchasing and/or using compliance units to pay for GHG emissions that exceed the standard.

Payments we collect through the program could go into a GHG emission reduction fund that could support greenhouse gas reduction projects in industry.

Purpose of regulation

The purpose of the EPS regulation is to reduce greenhouse gases in the industrial sector.

Supporting materials

View materials in person

Some supporting materials may not be available online. If this is the case, you can request to view the materials in person.

Get in touch with the office listed below to find out if materials are available.

Financial Instruments Branch
Address

40 St. Clair Avenue West
Floor 4
Toronto, ON
M4V 1M2
Canada

Office phone number

Comment

Commenting is now closed.

The comment period was from February 12, 2019
to March 29, 2019

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