GHG reporting regulation – GHG Accounting

Amendments to Ontario’s GHG Reporting Regulation now in Force

In December 2015, the Ontario Ministry of the Environment and Climate Change filed amendments to the Greenhouse Gas Emissions Reporting Regulation (O.Reg. 452/09) that came into force on January 1, 2016. An amended Guideline for Greenhouse Gas Emissions Reporting was published as well. The amendments include:

lowering the reporting threshold to 10,000 tonnes carbon dioxide equivalent (CO2e) from the current threshold of 25,000 tonnes per year, while maintaining the requirement to have emissions greater than 25,000 tonnes per year third party verified;
dividing the emission sources into those that only need to report and those that require third party verification;
clarification on verification to allow for the use of qualified positive, in addition to positive and adverse verification statements;
adding petroleum product suppliers and natural gas distributors to the reporting regulation starting in 2016, to support the implementation of a cap and trade program; and
adding other sources to the reporting regulation including:
– equipment used for natural gas transmission, distribution and storage;
– electricity imports;
– electricity transmission and distribution;
– magnesium production; and
– mobile equipment at facilities (optional reporting only).

These amendments were made to support the implementation of Ontario’s cap and trade program, the design for which is expected to be finalized in spring 2016. As previously announced by the Ontario government, it will also be releasing a detailed five-year action plan in 2016 which will include specific commitments for the province to meet its 2020 emission reduction targets and establish the framework necessary for Ontario to meet its 2030 and 2050 emission reduction targets.

Ontario Releases Regulatory Proposal to Amend GHG Reporting Regulation

In support of the development and future implementation of its cap-and-trade system, Ontario’s Ministry of the Environment and Climate Change (MOECC) is proposing amendments to the Greenhouse Gas Emissions Reporting Regulation (O. Reg. 452/09) (the GHG Reporting Regulation). Under the current GHG Reporting Regulation, regulated facilities emitting 25,000 tonnes or more of carbon dioxide equivalent (CO2e) per year are required to report and verify their emissions. Once implemented, the proposed amendments will significantly increase the amount of emissions reported and the number of facilities reporting under the GHG Reporting Regulation.
The proposed amendments include the following:
• lowering the reporting threshold to 10,000 tonnes CO2e from the current threshold of 25,000 tonnes per year, while maintaining the requirement to have emissions greater than 25,000 tonnes per year third party verified;
• dividing the emission sources into those that are reporting only and those that require third party verification;
• adding petroleum product suppliers and natural gas distributors to the GHG Reporting Regulation starting in 2016; and
• adding other sources to the reporting regulation including:
– equipment used for natural gas transmission, distribution and storage,
– electricity imports,
– electricity transmission and distribution,
– magnesium production, and
– mobile equipment at facilities.
Similar to California, there will be no emissions thresholds for electricity importers, the purpose of which is to prevent them from sub-dividing into smaller entities to avoid compliance obligations.
The reporting threshold for liquid petroleum fuel distributors and suppliers will be set at 200 litres of fuel to ensure consistency with Québec requirements. The verification threshold will remain at 25,000 tonnes of CO2e, but any liquid fuel distributor and suppliers that exceed the 200 litre threshold will be required to verify their emissions reports. All electricity importers will be required to verify their emissions reports.
The amended GHG Reporting Regulation will also categorize certain emission sources as being subject to reporting requirements only, meaning that these emission will need to be reported, but would not be subject to verification or potential compliance requirements under the cap-and-trade program. These proposed categories include:
• fugitive geothermal units and hydrofluorocarbons (HFC) emissions from cooling units at electricity generators;
• coal storage emissions;
• biomass combustion emissions; and
• on-site emissions from mobile equipment.
The proposed amendments have been posted for a 45 day public review and the comment period will end on October 29, 2015. Comments may be submitted to the MOECC’s designated contact person or online.

BC Restructures GHG Emissions Regulatory Framework in Light of LNG Projects

On October 20, 2014, Environment Minister Mary Polak announced the first part of a restructuring of BC’s GHG emissions regulatory framework with the release of Bill 2, also known as the Greenhouse Gas Industrial Reporting and Control Act. This piece of legislation will replace the Greenhouse Gas Reduction (Cap and Trade) Act that came into force on May 29, 2008. The restructuring will continue with the release of the relevant Regulations under the new Act once it is given Royal Assent and comes into force. These regulations will include a new GHG Reporting Regulation and a new Emission Offset Regulation. It is expected that the reporting thresholds in the new GHG Reporting Regulation and the resulting obligations thereunder will remain the same. Tim Lesiuk, Executive Director and Chief Negotiator at Climate Action Secretariat, emphasized in a technical briefing the importance and responsibility of companies assuming to be below the lowest reporting threshold of 10,000 t CO2e annually (called non-reporting entities), to also monitor and document their GHG emissions in order to mitigate the risk of regulatory non-compliance and provide proof of their status as a non-reporting entity in case of an inspection.
A new Emission Offset Regulation is expected to offer an independent offset certification process from the BC Government’s Carbon Neutral purchase program. This will be achieved through a new certification and registry system. The BC Government’s existing Carbon Neutral purchase program conducted by the Climate Investment Branch will continue, but they will source their offsets from the new certification and registry system. Existing offset purchase contracts are expected to be grandfathered into the new system.
The functional new aspect in Bill 2 is the introduction of a new carbon intensity performance requirement. This carbon intensity performance target, called Regulated Operations’ Emission Limits in the Act is an additional requirement beyond the reporting obligation that only applies to industries that are listed in the Schedule of Regulated Operations and Emission Limits in the Act.
The only two listed industries so far are coal-based electricity generation operation with a limit of 0 tonnes carbon dioxide equivalent emissions and liquefied natural gas operations with a limit of 0.16 carbon dioxide equivalent tonnes for each tonne of liquefied natural gas produced. However, additional industries may be added and the BC Government has indicated that it will be announcing climate change measures in other sectors going forward.
The emission target carbon intensity performance quantification is limited to the facility level and therefore does not include any upstream or downstream emissions outside of the facility boundary. In order to meet their obligations, regulated entities with prescribed emission limits will have several compliance mechanisms available to them. In particular, they can:
• improve energy efficiency or increase the use of clean electricity through facility design;
• acquire emissions offsets by investing in BC-based emission reduction projects at market prices; or
• contribute to a technology fund at a rate of $25 per tonne of CO2e.

Besides setting up a new technology fund, Bill 2 also requires the establishment of a registry for the purposes of the Act. This registry will be the only place where offset units and earned credits, resulting from performance below the emissions limit, are tracked. This is also the only place where transactions under the Act can be executed for compliance purposes.
If you have any questions about Bill 2 and the proposed changes to the BC emission offset regime or their potential impacts on your operations or offset project, please contact GHG Accounting Services.

Ontario Ministry of Environment seeks input on Greenhouse Gas Discussion Paper

On January 21, 2013, the Ontario Ministry of the Environment (MOE) released a discussion paper entitled Greenhouse Gas Emissions Reductions in Ontario. The purpose of the paper (available online): is to support discussions and gather feedback on the development of a greenhouse gas (GHG) emissions reduction program. In addition, these discussions will elicit information to support Ontario’s intention to obtain equivalency with the developing federal greenhouse gas regulations in certain sectors (including natural gas‐fired electricity generation), meaning that Ontario industries will not be subject to duplicate requirements.

In 2007, Ontario introduced its Climate Change Action Plan which includes the following GHG emissions reduction targets:

6% below 1990 levels by 2014,
15% below 1990 levels by 2020, and
80% below 1990 levels by 2050.

Ontario estimates that current initiatives to reduce greenhouse gas emissions will deliver 60% of the reductions needed to reach the 2020 reduction target. While a GHG emissions reduction program alone will not close the gap, it will play an important role in moving Ontario towards its goal of being 15% below 1990 emissions levels by 2020.

The program elements presented for discussion in the paper have been developed based on a set of key principles aimed at balancing Ontario’s economic and environmental interests. These principles include:

Achieving absolute reductions in greenhouse gas emissions in a cost‐effective way that considers competitiveness and supports achieving equivalency with the federal government.
Simplicity, consistency, transparency and administrative efficiency.
Striving to treat sectors and facilities equitably.
Taking into account early action by industry leaders.
Using accurate and verified emissions data to support policy development.
Promoting development and deployment of clean technologies.
Considering broad alignment with other emissions reduction programs of similar rigour that provides opportunity for linking in the future.
Considering integration with other provincial environmental policies.

The paper indicates that Ontario’s program would initially limit GHG emissions from fossil fuel-fired electricity generators and large GHG emitters in certain industries, including petroleum refining, chemicals, steel, cement and pulp and paper. The paper also indicates that the program would limit emissions from facilities in these sectors (other than the electricity generation sector) to the level of their current total emissions, with the limit declining thereafter by 5% over five years. Although it does not explicitly advocate a cap-and-trade system, the paper does suggest that the MOE will consider the use of emissions trading mechanisms to establish a carbon price and provide businesses with options on how to achieve reductions at the lowest cost.

In addition, the paper proposes that Ontario’s program would be in place one year prior to federal regulation of greenhouse gases from industry. A one year window will provide time for the province to negotiate and finalize an equivalency agreement with the federal government to ensure there is a single regulator for greenhouse gas emissions in the province.

Ontario acknowledges that other North American jurisdictions are also taking action to address emissions of GHGs. It notes that Quebec, British Columbia, Alberta, Saskatchewan and Nova Scotia all have or are developing regulations to reduce greenhouse gases. It also notes that in the USA, the Regional Greenhouse Gas Initiative limits emissions from electricity generation in north-eastern states, while California has introduced a broad greenhouse gas emissions trading regime with an intention of linking to Quebec’s program.

The MOE will accept submissions on the discussion paper until April 21, 2013. For further information, please refer to the Environmental Registry: Here

Revisions to BC Reporting Regulation now in force for 2011 Reporting Year

Recent amendments made to BC’s greenhouse gas Reporting Regulation have come into effect for 2011 calendar year emission reports (to be reported by March 31, 2012)

The amendments made in order 849 dated 17th of December 2010 to BC’s greenhouse gas Reporting Regulation have come into effect for 2011 calendar year emission reports (to be reported by March 31, 2012). These amendments include:

Establishment of a third class of reporting operation – electricity import operation – for the purpose of including imported electricity under the regulation.
Establishment of a reporting-only class of emissions for the purpose of including aboveground coal mine fugitive emissions, along with mobile equipment and carbon dioxide from Schedule C biomass sources.
Miscellaneous improvements including: (i) addition of further requirements to ensure that changes between methods on the part of reporting operations will result in improved emissions estimates; (ii) clarification on handling of terminals/storage tanks; (iii) addition of red liquor to Schedule C; and (iv) an update of quantification method references to incorporate new and revised quantification methods developed by the Western Climate Initiative.
Various changes to data to be reported, including: (i) addition of Income Tax Act business numbers, DUNS and Bradstreet numbers to reports; and (ii) addition of process flow diagrams to reports starting in 2012.
Clarifications have been made to site visit requirements for linear facility operations and changes have been made to the required contents of verification statements.

Additional updates to the Reporting Regulation may be introduced by the government based on the proposed Emissions Trading Regulation and Offsets Regulation, which are expected to be finalized in 2011. These changes could include further reporting-only sources, additions to the Schedule C list of biomass, and additional verification and compliance requirements.

WCI issues Second Harmonization Package for GHG Reporting Requirements for Canadian Jurisdictions for Consultation

The Western Climate Initiative (WCI) issued for stakeholder review a second harmonization package for reporting requirements for Canadian jurisdictions.

On October 29, 2010, the Western Climate Initiative (WCI) issued for stakeholder review a second harmonization package for reporting requirements for Canadian jurisdictions that builds upon the previously released Harmonization of Essential Requirements for Mandatory Reporting in Canadian Jurisdictions with the WCI Essential Requirements for Mandatory Reporting and the EPA Greenhouse Gas Reporting Program (which contains the WCI’s proposal for harmonizing the existing WCI Essential Requirements for Mandatory Reporting for use in Canadian jurisdictions). Comments on the second harmonization package are due by November 24, 2010.

The second harmonization package contains the WCI’s proposal for new quantification methods for five remaining sources: magnesium production, electronics manufacturing, underground coal mining, petroleum and natural gas systems, and natural gas transmission and distribution. The proposed WCI essential requirements are consistent with those of the U.S. Environmental Protection Agency, but are appropriate for use in the Canadian jurisdictions. It is expected that WCI jurisdictions in Canada will implement the harmonized essential requirements through their reporting regulations.

The second harmonization package is available online link.

Canadian Federal Government Issues Notice for Reporting of 2010 GHG Emissions

On August 14, 2010, the federal government published a notice in the Canada Gazette requiring all persons who operate a facility emitting 50,000 tonnes of carbon dioxide equivalent or more per year to report their 2010 emissions to Environment Canada no later than June 1, 2011.

On August 14, 2010, the federal government published a notice (the Notice) in the Canada Gazette requiring all persons who operate a facility emitting 50,000 tonnes of carbon dioxide equivalent or more per year to report their 2010 emissions to Environment Canada no later than June 1, 2011. This information will be collected through Environment Canada’s Single Window Reporting System, which was launched in early 2010.

Pursuant to section 46(8) of the Canadian Environmental Protection Act, 1999 (CEPA 1999), persons subject to the Notice are required to keep copies of this information, together with any calculations, measurements and other data on which the information is based, at the facility to which the calculations, measurements and other data relate, or at the facility’s parent company, located in Canada, for a period of three years from the date the information is required to be submitted.

The Minister of the Environment intends to publish greenhouse gas emission totals by gas by facility. Pursuant to section 51 of CEPA 1999, any person subject to the Notice who provides information in response to the Notice may submit, with their information, a written request that it be treated as confidential based on the reasons set out in section 52 of CEPA 1999. The person requesting confidential treatment of the information is required to indicate which of the reasons in section 52 of CEPA 1999 applies to their request. However the Minister may disclose, in accordance with subsection 53(3) of CEPA 1999, information submitted in response to the Notice. Any person who fails to comply with CEPA 1999 may be subject to a maximum fine of $1,000,000 and/or three years’ imprisonment.

Ontario Issues GHG Reporting Regulation

On December 1, Ontario issued O. Reg. 452/09 (the “Regulation”) under the Ontario Environmental Protection Act, which requires large emitters to report their greenhouse gas (GHG) emissions to the Ministry of Environment (MOE). The purpose of the regulation is to provide MOE with better data about the province’s emissions levels, while supporting the implementation of a cap-and-trade program in Ontario that will eventually link to other North American trading systems. The Regulation, which applies to 26 types of facilities, requires the following:

reporting of specified GHG data by all facilities that emit 25,000 tonnes of carbon dioxide equivalent (CO2e) or more per year;

annual reporting of GHG emissions, starting with 2010 emissions;

mandatory use of identified standard quantification methods to quantify emissions starting with 2011 emissions;

flexibility to use the best alternative quantification methods for 2010 emissions;

annual third-party verification of emissions, beginning with 2011 emissions;

emission reports to be submitted on June 1 starting with 2010 emissions in 2011; and

verification to be completed by September 1 starting with 2011 emissions in 2012.

The delay of third party verification until the 2011 reporting year is intended to allow the required professional services capacity to grow in order to meet demand in the province. The flexibility to use best alternative verification methods in 2010 is also intended to smooth the transition to standardized reporting requirements in 2011.

The Regulation was based significantly on the approach set out by the Western Climate Initiative and the September 22, 2009 EPA ruling on GHG reporting. With respect to biomass, the Regulation allows regulated emitters to deduct up to 15,000 tonnes of carbon dioxide generated from a facility through the combustion of biomass based on the theory that the combustion of biomass, which draws CO2 from the atmosphere as it grows, is carbon neutral. In contrast, BC’s new reporting regulation provides that all carbon dioxide from wood biomass, or the wood biomass component of mixed fuels, is not to be included in the calculation of GHG inventories.

The MOE has also issued a technical Guideline for Greenhouse Gas Emissions Reporting, which details standard quantification methods and best alternative quantification methods.

A copy of the Regulation is available in the Links on this site.

B.C.’s GHG Reporting Regulation has come into force on January 1, 2010

The Reporting Regulation (the Regulation) is a new regulation under the Greenhouse Gas Reduction (Cap and Trade) Act that has come into force on January 1, 2010. The Regulation requires facilities in British Columbia that emit over 10,000 tonnes of greenhouse gases (GHGs) annually to report their emissions.

The Regulation has been designed to allow for a single reporting window with Environment Canada, which aims to create administrative simplicity for industry stakeholders. The Regulation sets out requirements for facilities with GHG emissions from a number of activities within B.C. to report GHG emissions to the Ministry of Environment (MOE).

One of the key objectives of the Regulation is to facilitate an accurate and transparent reporting mechanism, which will support properly functioning cap-and-trade system. As such, the Regulation specifies among other criteria:

· GHGs subject to reporting;

· level of emissions requiring reporting;

· facilities required to report;

· quantification methods to be used in reporting;

· requirements and procedures for annual reporting;

· verification mechanisms; and

· compliance obligations.

Below is an overview of the reporting specifics:

· all six main GHGs included;

· 10,000 tonne carbon dioxide equivalent (CO2e) reporting threshold;

· 25,000 tonne CO2e verification threshold;

· upstream oil and gas; (ii) natural gas transmission and distribution; (iii) electricity transmission and distribution; and, (iv) oil pipeline transportation emissions are aggregated into “linear facilities” to determine whether the 10,000 tonne reporting and 25,000 verification thresholds are exceeded;

· carbon dioxide from wood biomass, or the wood biomass component of mixed fuels, is not included in the determination of thresholds;

· first requirements (data collection and management) for reporting operations start on January 1, 2010;

· not applicable to public sector organizations, except for BC Hydro and BC Transmission Corporation electricity generation or electricity transmission;

· not applicable to emissions of landfill gas as defined under the Landfill Gas Management Regulation;

· registration to occur by April 1, 2010;

· annual emissions reports, beginning with the 2010 calendar year, required by March 31 of the following year;

· facilities with emissions greater than 20,000 tonnes of CO2e in any year between 2006 and 2009 must report these emissions along with the 2010 emissions report submitted in 2011;

· a facility may calculate emissions using alternative methodologies for the lower of 3% of the facilities total emissions, or 20,000 tonnes;

· for the 2010 calendar year, a facility may measure a specific parameter using alternative methods inconsistent with those prescribed in the regulation (approval is required for this after March 31, 2010);

· MOE may publish emissions data from major source categories;

· a facility may request that certain data remain confidential; and

· Western Climate Initiative quantification methods are required to be used (where these do not exist, required methods are specified by the MOE).

Below is an overview of verification specifics:

· verification to a reasonable level of assurance;

· 5% materiality threshold applies;

· verification statements to be submitted by September 1 of the following year for 2010 and 2011 reports (thereafter the verification deadline is the same as the reporting deadline, April 1);

· verification to be completed by an independent third party verification body, accredited by the Standards Council of Canada or the American National Standards Institute in accordance with ISO 14065;

· for verifications completed before Dec. 31, 2012, verifiers can be accredited by the California Air Resources Board; and

· conflict of interest requirements for verifiers apply.

Activities covered include:

· General Stationary Combustion

· Mobile Equipment Fuel Combustion (except for linear facilities; generally on-site, off-road equipment)

· Aluminium or Alumina Production

· Ammonia Production

· Carbon Dioxide Transportation (linear facility)

· Cement Production

· Coal Mining from Underground Mines

· Coal Storage at Facilities that Combust Coal

· Copper or Nickel Smelting or Refining

· Electricity Generation

· Electricity Transmission (linear facility)

· Electronics Manufacturing

· Ferroalloy Production

· Glass Manufacturing

· Hydrogen Production

· Industrial Wastewater Processing

· Lead Production

· Lime Manufacturing

· Magnesium Production

· Natural Gas Transmission, Natural Gas Distribution or Natural Gas Storage (linear facility)

· Nitric Acid Manufacturing

· Oil and Gas Extraction and Processing Activities (linear facility)

· Oil Transmission (linear facility)

· Petrochemical Production

· Petroleum Refining

· Phosphoric Acid Production

· Pulp and Paper Production

· Refinery Fuel Gas Combustion

· Zinc Production

GHG Reporting

With the implementation of new reporting legislation and pending regulations in several jurisdictions, it is important to determine and understand your reporting obligations. This will enable you to comply with regulatory requirements and any specified reporting standards. The starting point is accounting for your actual greenhouse gas emissions, i.e. determining their source and the amount from each source, and calculating your total emissions based on accepted protocols.

Through the use of recognized international greenhouse gas accounting standards and our diverse team expertise, GHG Accounting Services can help you clarify your reporting obligations and work with you to fulfill these reporting obligations in an efficient and cost effective manner.

In addition to tracking, calculating, and reporting greenhouse gas emission using the requisite factors and protocols, GHG Accounting Services’ comprehensive approach will also allow you to effectively translate data into emission reduction plans and tangible energy savings, leading to overall improved business performance and cost reductions.