Ontario’s responsible and balanced approach to meeting the federal benchmark for the Emissions Performance Standards industrial emissions program for 2023-2030.

About Ontario's emissions performance standards (EPS) program

Ontario is the leader of Canada’s progress on emission reductions and is committed to meeting our 2030 reduction target.

Our Emissions Performance Standards (EPS) program is working to help us meet this target by regulating greenhouse gas (GHG) emissions from large industrial facilities. This program, which came into full effect January 1, 2022, sets the standards for lowering emissions (emissions limits) that those facilities are required to meet at less cost than the federal output-based pricing system (OBPS), protecting Ontario workers and job creators while also protecting the environment.

Our made-in-Ontario program encourages businesses to invest in innovation, infrastructure, technology, and workers, and will help us meet our 2030 target.

The EPS program is supported by Ontario’s GHG emissions reporting program, which provides verified emissions, production, and emissions limit data for all registrants in the EPS program. These are needed to determine a facility’s compliance obligation under the EPS program.

Updated federal benchmark

Under the federal Greenhouse Gas Pollution Pricing Act (GGPPA), the federal government assesses provincial and territorial carbon pricing programs against a benchmark. On August 5, 2021, the Government of Canada published its Update to the Pan-Canadian Approach to Carbon Pollution Pricing 2023-2030 which sets out new, more stringent benchmark requirements that provincial and territorial programs will need to meet.

Ontario’s principles for meeting the updated federal benchmark for the EPS program for the 2023-2030 period

We intend to design the next phase of the EPS program to meet the updated federal benchmark. This will ensure that the EPS program continues to apply in Ontario for the 2023-2030 period.

As we develop the future policy, we are considering the following guiding principles:

• providing continuity and predictability for Ontario businesses
• incenting GHG emissions reductions, which will help us meet Ontario’s target to reduce GHG emissions by 30% below 2005 levels by 2030
• minimizing the risk for carbon leakage (the risk of production leaving the province for other jurisdictions with less stringent climate policies), taking into account competitiveness impacts to Ontario industry
• ensuring the program continues to be fair, cost-effective and flexible to the needs and circumstances of our province
• minimizing regulatory burden

To prepare for a future proposal that meets the updated federal benchmark, we plan to begin collecting data over the spring/summer of 2022 to support development of potential new performance standards for the 2023-2030 period for:

• facilities transitioning from energy-based standards to output-based standards
• select industries (e.g., steel sector) to give consideration to emerging new production processes

Meeting our emissions reduction target

The 2023-2030 EPS program is one of several important initiatives that will help us meet our 2030 emissions reduction target of reducing GHG emissions 30% below 2005 levels by 2030.

Modelling information provided in the supporting materials section helps illustrate our trajectory toward achieving this target. It demonstrates how the policy initiatives that are either established or currently in development, including the 2023-2030 EPS program, put Ontario on track to meet this target.

It is important to note that our modelling presents a point-in-time view. It will continue to evolve and be updated as policy development progresses.

Questions for discussion

You are invited to ask questions or provide feedback via email to the contact listed below. Set out below are a few questions the ministry is considering.

Questions

1. How can the future EPS program design elements optimize GHG emissions reductions while minimizing carbon leakage (e.g., decline rates for stringency factors)?


2. How should different types of emissions be treated to minimize competitiveness impacts and allow time for new cost-effective technologies to be developed over the medium and long-term?