Action on Industrial Greenhouse Gas Emissions

Industry accounts for about half of Canada's greenhouse gas emissions that cause climate change. The Government is mandating the reduction of industrial greenhouse gas emissions through the introduction of a robust regulatory regime.

The Regulatory Framework for Air Emissions sets a 2010 implementation date for mandatory reduction targets from major industrial sectors.  These intensity targets will be stringent and tightened on an annual basis. This will place Canada on the path to achieving sustained absolute reductions in industrial greenhouse gas emissions.With this Regulatory Framework, Canada will have one of the most stringent set of regulated industrial targets for greenhouse gases and air pollution in the world.

Existing facilities

In 2010, facilities existing in 2006 will be required to reduce to meet challenging greenhouse gas emissions targets. They will be ambitious enough to lead to absolute reductions in greenhouse gas emissions as early as 2010.

Fixed process emissions will be exempted from these targets. These are emissions that are tied to production and for which there is currently no alternative technology that will reduce them.  The only way to reduce these emissions would be to reduce production.    

New facilities

New facilities using cleaner fuels and technologies will have a three year grace period. Because it always takes a few years to get a new plant running efficiently, this grace period will allow new facilities to reach full production and to establish their initial emissions levels.

How industry can comply

Several options will allow companies to choose the most cost-effective way to meet their reduction targets and can encourage innovation and the adoption of cleaner technologies. These options include:

• In-house reductions: such as energy efficiency measures, improved energy management systems, or investments in carbon capture and storage or other emission-reducing technologies.
  
  
• Contributions to a technology fund: Technological advancement and innovation are critical to achieving deep, long-term reductions in greenhouse gas emissions.  Companies will be able to meet part of their regulatory obligations by contributing to a technology fund that will be used to develop and deploy technologies to reduce greenhouse gas emissions now and in the future across industry and regions.
  
  
• Emissions trading: Companies whose emissions are below their target will receive credits that could either be “banked” for future use, or sold to other companies who had not met their target.  Emissions trading will initially be done domestically but future linkages with emissions trading systems in the U.S., and possibly Mexico, will be explored.
  
  
• Offsets:As part of the domestic emissions trading mechanism, companies could acquire offset credits by purchasing emissions reductions from activities that are not regulated (2007-09-05m is a way to engage other sectors of the Canadian economy to make greenhouse gas reductions.
  
  
• Access to Kyoto’s Clean Development Mechanism:This will generate real reductions globally through emissions reductions from projects in developing countries.

Credits for early action

The Government recognizes that some companies are taking action by making good environmental choices and believes their leadership should be rewarded. As such, companies that took verified action to reduce greenhouse gas emissions between 1992 and 2006 will be eligible to receive a one-time credit that could be applied towards their regulatory obligations or traded. Credits for early action will represent a maximum of 15 megatonnes of carbon dioxide across industry.

Enforcement

The Canadian Environmental Protection Act, 1999 has a number of compliance and penalty provisions and failure by regulated companies to meet any of the requirements set out by the Act or its regulations will be an offence. 

This balanced approach will ensure we protect the environment, clean up the air we breathe and make real progress to reduce greenhouse gas emissions while Canada’s economy can continue to grow and prosper.  

These industrial targets, combined with the other actions announced to date to tackle climate change,will put us on the path to our mid-term objective of an absolute reduction ofCanada ’s greenhouse gases of 150 megatonnes by 2020.