Tighter Rules for Emissions Credits

Summary#

These are proposed changes called the Regulations Amending the Output-Based Pricing System Regulations published on November 9, 2024. They would tighten rules about how greenhouse-gas credits and compliance units are counted and used. This is a proposal, not final; people can make comments within 60 days of publication.

What it does#

• Clarifies when a credit or unit is considered taken out of circulation by saying it is the date it is retired or the date a province or program authority designates it for use as a compliance unit.
• Changes rules to make sure that for a greenhouse-gas reduction or removal of one CO2e tonne, no more than one credit or unit is issued.
• Adds a rule that a credit or unit issued under a provincial program cannot be used by more than one person.
• Requires that a unit or credit be designated by the province or program authority that issued it before it can be used for remittance to the federal government.
• Says the changes would come into force the day the new regulations are registered.

Who's affected#

• Facilities and companies subject to the Output-Based Pricing System Regulations (industrial emitters who use or trade credits and compliance units).
• Provinces and the program authorities that issue credits and designate units for compliance.
• Buyers, sellers, and intermediaries who trade or rely on those credits for federal compliance.
• The Department of the Environment and its Industrial Greenhouse Gas Emissions Management Division, which manage the federal side of the program.

If it is unclear how a specific facility or program will be affected, the source does not provide extra detail.

Why it matters#

• It aims to stop double-counting and double-use of emissions credits. That makes the system more accurate and prevents the same emissions reduction from being claimed more than once.
• It clarifies when credits move from being tradable to being used for compliance. That can affect how companies manage and trade their credits.
• For regulated businesses, the change could affect compliance planning and the value or usability of certain credits. The regulatory text does not estimate costs or benefits.