Amendments to O. Reg. 79/15 to Further Streamline the Use of Alternative Low-Carbon Fuels

The Ministry of the Environment, Conservation and Parks (ministry) is committed to addressing climate change by reducing greenhouse gas emissions and to diverting waste that would otherwise end up in landfills.

The ministry is proposing to amend O. Reg. 79/15: Alternative Low-Carbon Fuels (O. Reg. 79/15 or the Regulation) made under the Environmental Protection Act, R.S.O. 1990, c. E. 19.

These changes to the regulation would make it easier for manufacturers of cement, lime, iron and steel, to substitute the use of fossil fuels with fuels derived from materials that would otherwise be disposed in landfills.

More specifically, the proposed amendments would:

1. modernize the process for ECA amendments and provide proponents with the option to rely on secondary or tertiary sources to estimate CO₂ emission intensity
2. increase the limit of alternative low-carbon fuels in demonstration projects from 100 tonnes per day to 200 tonnes per day
3. remove out-dated quarterly reporting requirements for SO₂ and NO_x
4. remove dead animals or dead animal parts from the list of restricted low-carbon fuels to allow materials such as bone meal and animal fat to be used as a fuel source

The increased use of low carbon fuels would help recover resources from waste and enable these industries to reduce their reliance on fossil fuels and decrease their carbon footprint.

Details about the proposed amendments

O. Reg. 79/15: Alternative Low-Carbon Fuels was originally put in place to streamline the approvals process for manufacturers of cement, lime, iron, and steel, so they are able to switch from fossil fuels to alternative fuels derived from materials that would otherwise be disposed of as waste and landfilled.

There has been very little use of O. Reg. 79/15 in the five years since its introduction - only two Environmental Compliance Approvals have been issued under the Regulation. In response to some of the challenges identified by multiple stakeholders, the ministry is proposing regulatory changes to further streamline the use of alternative low-carbon fuel.

Supporting the use of alternative low-carbon fuels aligns with Ontario's commitment to investigate options for recovering resources from waste and to set and overall target for lowering greenhouse gas emissions to 30 per cent below 2005 levels by 2030. The government has also committed to finishing the phase out of coal by supporting efforts of Ontario industry to reduce their greenhouse gas emissions through reduction and phase out of their coal usage.

Removing barriers to recover end-of-life materials (that cannot be reused or recycled) would enable these energy-intensive sectors to reduce their greenhouse gas emissions, divert waste from landfills and help the province achieve its sustainable development goals and targets.

Modernize the process for Environmental Compliance Approval amendments and provide the option to rely on secondary or tertiary sources to estimate CO₂ emission intensity

Currently, under O. Reg. 79/15, before an Environmental Compliance Approval application can be submitted, a proponent is required to hold two (2) in-person public meetings to notify and consult on the continuous use of specific alternative low-carbon fuels. The proposed changes would provide proponents with the option to hold public meetings virtually or in-person to meet consultation requirements prior to submission for the initial Environmental Compliance Approval.

Under the current framework, once an Environmental Compliance Approval has been issued, if a proponent would like to add new low carbon fuels (which have not been previously approved) or increase the maximum daily quantity of previously approved fuels, they are required to complete the public consultation requirements (e.g. two public meetings) prior to amending their approval. The proposed changes would remove the upfront consultation requirements to align with the current Environmental Compliance Approval amendment process for other sectors. The requirements for public consultation would be maintained through the Environmental Registry of Ontario for a minimum 30-day public commenting period.

As part of the application for a permit and the public consultation requirements, proponents are currently required to provide a CO₂ emission intensity report based on lab analysis from actual low carbon fuel samples to verify that the CO₂ emission intensity of the low carbon fuel is less than the CO₂ emission intensity of the fossil fuel that is currently used at the facility. The proposed changes would enable proponents with the option to rely on secondary or tertiary data sources (e.g. published literature) to estimate the CO₂ emission intensity of a fuel. This would make it easier for proponents to consult on a broader range of low carbon fuel (and the maximum daily usage), which can then be authorized under the initial Environmental Compliance Approval. The authorization of a broader range of alternative low carbon fuel (and the quantity) would help avoid future Environmental Compliance Approval amendments and enable proponents to respond quickly to the market supply of fuel sources.

Increase the limit of alternative low-carbon fuel for demonstration projects from 100 tonnes per day to 200 tonnes per day

Demonstration projects enable proponents to assess the performance of different types of low carbon fuels (and different feedstock mixes) on a smaller scale to determine feasibility of the fuels for continuous use. The ministry was made aware that the current 100 tonnes per day limit for demonstration projects is too restrictive, as this does not allow for adequate testing of low carbon fuel sources.

We are proposing to increase the limit of demonstration projects to 200 tonnes per day, which would enable facilities to assess the performance of different types and blends of low-carbon fuels on a broader scale and determine whether the fuels are feasible for continuous use. Although we are proposing to increase the limit for demonstration projects, the regulatory requirements to support these projects have not changed. For example, as part of the Environmental Compliance Approval application process, proponents would have to demonstrate compliance with the ministry’s air emissions standards and that the low carbon fuels could be managed safely (i.e., storage, handling).

Also, proponents may use the results of the demonstration project, if in compliance with regulatory requirements, to apply for an Environmental Compliance Approval for continuous use.

Flexibility for NO_x and SO₂ emissions reporting for non-demonstration projects

Quarterly reports for NO_x and SO₂ emissions are currently a requirement for non-demonstration projects under O. Reg. 79/15. This monitoring was originally put in place because of the NO_x and SO₂ emissions trading program (O. Reg. 194/05: Industry Emissions – Nitrogen Oxides and Sulphur Dioxide under the Environmental Protection Act).

The province has since revoked O. Reg. 194/05 (effective Feb 5, 2021) to end the outdated program because in its current form, it was no longer effective in reducing emissions from regulated sectors (ERO# 019-1233). Although the ministry is proposing to remove the prescriptive quarterly reporting requirements for NO_x and SO₂ emissions in O. Reg. 79/15, the ministry would still have director authority and discretion to impose conditions in the Environmental Compliance Approval to require monitoring and reporting on a site-specific basis.

Expand eligible fuel sources

Schedule 1 of the Regulation lists prohibited alternative low-carbon fuel sources. The proposed amendments would allow energy-intensive facilities to use dead animals or dead animal parts like animal bone meal, animal fat and hides as a fuel to replace fossil fuels. Currently, facilities in jurisdictions outside of Ontario are permitted to use dead animals as a source of alternative low carbon fuel (e.g., animal bone meal). The proposed changes would align with other jurisdictions.

Further, proponents would be required to follow existing provincial and federal rules that manage the disposal of dead animals, for example:

• O. Reg. 106/09: Disposal of Dead Farm Animals under the Nutrient Management Act, 2002, S.O. 2002, c. 4
• O. Reg. 105/09: Disposal of Deadstock under the Food Safety and Quality Act, 2001, S.O. 2001, c. 20

The amendments would not detract from Ontario’s waste reduction priority to reduce, reuse and recycle. For example, materials regulated under the Resource Recovery and Circular Economy Act, 2016 and materials accepted in the Blue Box Program are not considered eligible fuel sources under O. Reg. 79/15. The industry would be permitted to use non-recyclable, non-hazardous wastes such as painted wood and plastic packaging that cannot be recycled and biomass-derived fuels

Analysis of Regulatory Impact

The proposed changes would make it easier for manufacturers in the cement, lime, iron and steel industry to substitute the use of fossil fuels with low carbon fuels derived from materials that would otherwise be disposed in landfills. This would encourage the greater use of low carbon fuels, which would help lower greenhouse gas emissions for communities over time.

For proponents, an Environmental Compliance Approval preauthorizing the use of a broader range of fuels would help avoid future amendments to their approval and allow companies to respond quickly to the market supply of fuel sources, saving them time and costs.

We encourage interested parties to submit comments on the proposed regulation amendments. We will consider all comments submitted as a response to this posting prior to finalizing the regulation.