Ontario awaits guidelines for offset credits

Friday, May 20, 2016

Designated greenhouse gas (GHG) emitters in Ontario are combing through the finalized rules for the pending cap-and-trade system, including various formulas for calculating the allotment of free emission allowances. However, guidelines for offset credits — defining eligible carbon reduction activities and how they will be recognized in the market — are yet to be released.

Entities emitting 25,000 tonnes or more of carbon dioxide equivalent (CO2e) annually will be mandatory market participants. As confirmed in the final version of the regulation, which was posted May 19 on the province’s environmental registry, the Ontario government will launch cap-and-trade for 2017 with a ceiling of approximately 142.3 million tonnes of CO2e then inch it down to about 124.7 million tonnes, representing a 12.4 per cent drop, over the next four years.

“Ontario is doing its part to reduce harmful greenhouse gas pollution by putting in place a cap-and-trade program to limit emissions and invest in the kind of innovative solutions that will give our kids and grandkids the sustainable and prosperous legacy they deserve,” Glen Murray, the Minister of the Environment and Climate Change, says.

Although much of the impact for Ontario’s real estate industry will be linked to potential flow-through electricity and natural gas costs, some other key building components will be affected. Notably, cement, steel and glass production are all listed in the regulation as specified GHG activities. Destruction of the refrigerant, HFC 23, which has a global warming potential 11,700 greater than carbon dioxide, is also designated.

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