3.c. Mandatory emissions reductions, 2.a.i. Investment and Trust Funds 1.a.ii, Offset-based emissions trading system
CITATION:
Climate Change And Emissions Management Act Alberta Specified Gas Reporting Regulation
STATUS:
Enacted
TIME FRAME Start:
In effect since July 1, 2007
TIME FRAME End:
DESCRIPTION:
Alberta requires facilities that emit more than 100,000 tonnes of greenhouse gases a year to report their emissions annually and reduce their emissions intensity by 12 per cent as of July 1, 2007. Such facilities Account for about 70 per cent of Alberta's industrial greenhouse gas emissions. Facilities have four choices to be in compliance: Make improvements to their operations to reduce emissions; purchase Alberta-based offset credits; pay C$15/tonne for each tonne over the target to the Climate Change and Emissions Management Fund; or purchase or use Emission Performance Credits. In 2008, companies made improvements to their operations that resulted in 1.89 Mt of emission reductions. A policy decision has as yet been not been made on how CCS will be treated as an improvement.
Emissions Performance Credits (EPCs) are generated by making facility improvements beyond the targets of the regulations. A company may purchase Emissions Performance Credits (EPCs) from large emitters that reduced their emissions intensity beyond the 12% target. EPCs are generated by facilities that have gone beyond the 12% mandatory intensity reduction. EPCs can be banked for future use or sold to other facilities that need to meet the reduction target. In 2008, 1.89 Mt of emission performance credits were generated, with 0.6 Mt submitted for compliance purposes.
Large industrial emitters may alternatively purchase offset credits from unregulated projects that have voluntarily reduced their emissions in Alberta. Credits must be created using protocols approved by the Alberta government. The protocols outline how to quantify and verify emission reductions for different types of projects (e.g. no or reduced tillage, biomass and biofuels). All credits used to meet the reduction targets must be verified by an independent third party. In 2008, 2.75 Mt worth of offset credits were submitted were verified by a third party.
The Climate Change and Emissions Management Fund will invest in projects and technology to reduce greenhouse gas emissions in Alberta. The fund will operate as not-for-profit entity separate from the Alberta government and will begin to accept applications for funding later in fiscal 2009-10. To date, the fund currently holds C$122.4 million.
EXPERIENCE:
More than 6.5 million tonnes of greenhouse gases have been reduced to date. The annual cost of compliance is estimated to be C$177 million.
