We updated the notice on August 30, 2022 to upload the French version of the document in the related files section.
This consultation was open from:
August 26, 2022
to October 10, 2022
We are proposing changes to the Emissions Performance Standards program for 2023-2030 to meet the benchmark set by the federal government. The EPS program will continue to be a fair, cost-effective program that reduces emissions and is flexible to the unique needs and circumstances of industry in Ontario, while supporting green economic growth.
Emissions performance standards program
Ontario’s Emissions Performance Standards (EPS) program regulates greenhouse gas (GHG) emissions from large industrial facilities by setting emissions limits that are the basis for the compliance obligations of those facilities. The program was developed as an alternative to the federal output-based pricing system (OBPS) and helps Ontario achieve GHG emissions reductions. The EPS program came into full effect on January 1, 2022.
The EPS program is supported by Ontario’s GHG emissions reporting program, which provides the required 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. The federal benchmark for 2023-2030 that was released in August 2021 includes new criteria and tests that provincial and territorial carbon pricing programs must meet.
Proposed changes to the EPS program and GHG emissions reporting program
As Ontario’s EPS program currently only applies to the year 2022, regulatory amendments are required for it to continue.
On April 8, 2022, we posted a bulletin that outlined our guiding principles for meeting the updated federal benchmark for 2023-2030.
We are now proposing regulatory amendments that will change the EPS program and GHG emissions reporting program that will allow us to meet the updated federal benchmark for 2023-2030.
The amendments would apply to the following regulations and incorporated documents:
- Greenhouse Gas Emissions Performance Standards regulation (O. Reg. 241/19 or the EPS regulation) and the incorporated GHG Emissions Performance Standards and Methodology for the Determination of the Total Annual Emissions Limit (the Methodology)
- Greenhouse Gas Emissions: Quantification, Reporting and Verification regulation (O. Reg. 390/18 or the Reporting Regulation) and the incorporated Guideline for Quantification, Reporting and Verification of Greenhouse Gas Emissions (the Guideline)
The Proposed Regulatory Amendments for the EPS Program 2023-2030 attached in the Supporting Materials of this notice provides detailed information about the regulatory amendments we are proposing.
We are specifically seeking feedback on the following program components:
- carbon price
- program scope
- registration and cessation of coverage
- emissions performance standards
- electricity generation and cogeneration
- stringency factors
- other administrative and technical changes
- carbon leakage and related competitiveness assessment
- public reporting
The intent for the EPS program is to provide a fair, cost-effective program that is flexible to the needs and circumstances of our industries and reduce emissions while allowing for economic growth.
We are currently planning how proceeds from the EPS program (compliance payments) will be used to support industrial GHG emissions reductions. Any decisions about the use of proceeds will have to consider the updated federal benchmark and the spending provisions for the proceeds in the Environmental Protection Act.
We will consider feedback on this proposal as we finalize the amendments to the EPS and Reporting Regulations, and the EPS Methodology and Guideline, targeting fall 2022.
Regulatory impact analysis
Our modelling suggests that the direct compliance costs that would result from the proposed regulatory amendments to the EPS program are expected to be lower than the costs under the proposed federal OBPS. The present value of the cumulative cost savings to regulated industry are estimated to be approximately $1.1 billion for 2023-2030 period.
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