To help mitigate climate change – one of the most urgent issues of our time – Ontario is proposing to implement a greenhouse gas cap and trade program. A cap and trade program effectively reduces the amount of greenhouse gas pollution going into our atmosphere by setting a limit on emissions, rewarding innovative companies, providing certainty for industries, and creating more opportunities for investment.
On November 16, 2015 the Ministry of the Environment and Climate Change posted a policy paper to the Environmental Registry (012-5666) for 30 days to gather comments on the design options under consideration for Ontario’s greenhouse gas cap and trade program. In addition, since May 2015, Ontario has met with more than 700 stakeholders on cap and trade, including industries, associations, environmental organizations, and labour groups. The Government will continue to involve and engage individuals, businesses, communities, municipalities, non-governmental organizations and First Nation and Métis communities in the ultimate goal of fostering a high-productivity low-carbon economy and society in Ontario.
The ministry is now posting:
- A regulatory proposal for a cap and trade regulation, which includes an appendix presenting detailed technical information for the distribution of allowances to eligible capped emitters for the first compliance period, details related to early reduction credits, and an overview of complementary amendments for the reporting regulation and incorporated guideline to support implementation of the cap and trade program. Following the 45 day consultation period, comments received will be considered and the content of this document, including the grey shaded boxes in the draft regulation, will be revised accordingly and integrated into the final cap and trade regulation.
- A revised Guideline for Greenhouse Gas Emissions Reporting.
Cap and Trade Regulatory Proposal
The cap and trade regulatory proposal outlines the policy for a number of program elements, including:
- Proposed caps
- Capped and uncapped (market) participants
- Compliance periods
- Registration rules
- Auction and sale rules
- Strategic reserve of allowances
- Market rules such as holding limits and purchase limits
- Compliance requirements
- Credit for early action
Proposed Complementary Amendments to the Greenhouse Gas Emissions Reporting Regulation:
To support the proposed cap and trade program, the Ministry is now proposing to revoke the Greenhouse Gas Emissions Reporting Regulation (O.Reg. 452/09) and replace it with a new greenhouse gas reporting regulation and incorporated Guideline under the Climate Change Mitigation and Low-carbon Economy Act, if passed. Proposed changes will include:
- Requirements to report production and other process related information;
- Provisions to allow facilities with emissions between 10,000 and 25,000 tonne to opt-in;
- Clarifications on measurement requirements and reporting of biomass types; and
- Refinements to the Regulation and Guideline to facilitate implementation of the Cap and Trade Regulation.