The Ministry is now posting for a 30 day public review and comment period a proposal for the offset protocol covering the capture and destruction of methane gas from landfill facilities. The protocol, once finalized, will apply to landfill facilities located anywhere in Canada. Projects must meet the requirements of the proposed offsets regulation and the applicable protocol to be able to be issued offset credits. Protocols covering additional project types will be posted for public review and comment in the coming months.
Ontario is leading the fight against climate change through the Climate Change Action Plan. The plan lays out the specific actions Ontario will take in the next five years to meet its 2020 greenhouse gas reduction targets and establishes the framework necessary to meet its long-term targets.
As referenced in the Climate Change Action Plan, Ontario will create tools to allow Ontario's agriculture, forestry, lands, and resource recovery sectors to supply carbon offsets to the cap and trade market, providing made-in-Ontario compliance options for emitters.
Ontario has implemented a greenhouse gas cap and trade program. A cap and trade program effectively reduces the amount of greenhouse gas pollution going into the atmosphere and creates opportunities for investment by setting a limit on emissions and rewarding innovative companies that can reduce emissions.
Offset credits, a component of the cap and trade program, will increase the compliance options for capped facilities while extending the environmental benefits of greenhouse gas mitigation beyond the capped sectors.
On November 16, 2016 the Ministry of the Environment and Climate Change posted the Compliance Offset Credits Regulatory Proposal to the Environmental Registry for 45 days to gather comments on the design options under consideration for Ontario’s greenhouse gas offsets program. In addition, since May 2015, Ontario has met with over 700 stakeholders on cap and trade, including industries, associations, Indigenous organizations and communities, environmental organizations, and labour groups. Offsets have been an integral part of those discussions. A regulation creating an offsets program for inclusion in the cap and trade program is now being developed to allow for high quality offset credits with integrity and transparency within Ontario’s cap and trade program.
Protocols are a central component of an offset program. They set out the rules for offset initiatives that will ensure that the GHG reductions, removals and avoidances are real, verifiable, quantified, permanent, enforceable and additional to regulatory requirements and standard practice. It is proposed that once a protocol is approved it will form part of the offsets regulation that will be finalized later in 2017. As noted in the 2016 regulatory proposal on offsets, offset initiatives will not be able to be registered or receive credits unless and until a protocol is approved. Together with the offsets regulation, the protocols will set out requirements for a class/classes of initiatives, including process and administrative requirements for the registration of an offset initiative and the creation and issuance of related offset credits.
Compliance Offset Credits Regulatory Proposal
The Compliance Offset Credits Regulatory Proposal posted in November 2016 outlined the policy for a number of program elements, including:
- Offsets Initiative Registry
- Start Dates
- Crediting Periods
- Reporting Requirements
- Verification Requirements
- Offset Credit Creation Criteria
- Buffer Account
- Offset Credit Issuance
- Project Reversals
Landfill Gas (LFG) Offset Protocol Proposal
The LFG Protocol will set out the requirements for quantifying and registering a GHG reduction initiative for which an offset credit may be issued, including:
- Eligibility Rules (some of which may be incorporated into the regulation that is being developed)
- GHG Assessment Boundary
- Calculation of Emission Reductions
- Data Management and Project Monitoring
- Reporting (some of which may be incorporated into the regulation that is being developed)
- Verification Guidance
- Parameters for Quantification
- Substitution Methods for Missing Data
- Baseline Monitoring and Calculation of Initiative Emissions
Offset sponsors, as well as other interested parties, will need to consult both the protocol and the final offsets regulation, to understand all the requirements associated with undertaking offset initiatives.