Alberta Announces Tighter GHG Emission Rules and Global Warming Policy Review Panel
In her own initial policy announcement since taking office five days ago, Alberta’s Atmosphere and Parks Minister Shannon Phillips announced today that Alberta’s primary GHG regulation is going to be restored and updated. The Required Gas Emitters Regulation (SGER), enacted in 2007 as North America’s first legislation to place a cost on carbon, was set to run out on June 30, 2015.
The Minister stated emission intensity reduction needs within the SGER is going to be elevated inside a phased-in manner from 12 % to fifteen percent in 2016, and also to 20 % in 2017. A rise in the cost of Technology Fund credits, which large emitters (>100,000 tonnes each year) can buy to attain their compliance targets and generally referred to as “carbon levy”, may also be phased-in. The cost will rise from CA$15 to CA$20 per credit in 2016 and escalate to CA$30 per credit by 2017. Large emitters may get one credit for every tonne of GHG emission reductions needed to satisfy their intensity reduction target.
Minister Phillips mentioned the current rules were a “significant step” when they were young but they are now “obsolete,” doing little either to address the global warming issue or earn Alberta greater market access because of its energy products, when you are seen to become seriously interested in addressing global warming. The prior Progressive Conservative government was while reviewing the SGER but had indicated it had been reluctant to help make the rules tighter in the present low gas and oil cost atmosphere. Minister Phillips stated that her Government is going to be updating the SGER in a manner that demonstrates that Alberta is “beginning to obtain seriously interested in this problem.Inches She stated “we have to do better”, having a policy that’s achievable, effective and strikes the best balance between atmosphere and social factors, while being conscious of the matter that Alberta is definitely an energy producing province that depends on the power niche for a lot of its employment and success. The update towards the SGER is recognized as an interim measure leading to some more comprehensive global warming plan which will feature responsible energy development and ecological sustainability, addressing emissions all sectors, not only the oil industry.
To help develop that plan, within the second a part of her announcement, Minister Phillips advised the Government is going to be convening a specialist review panel brought by Dr. Andrew Leach, Affiliate Professor and Academic Director of one’s Programs in the College of Alberta School of economic. The panel has been requested to see with industry, municipalities, business leaders, aboriginal groups, global warming experts and citizens, and supply suggestions about the introduction of an extensive intend to address global warming in Alberta. The panel is anticipated to produce attorney at law guide this summer time, aiming the problems and goals Alberta will pursue, together with a shift to some greener economy, more efficient energy use, a more powerful status on the national and worldwide scale, and faster innovation and technology. This tactic is going to be reflected inside a preliminary proposal that Alberta can showcase just before COP 21 in Paris in December 2015.
The Minister also announced the advice caused by the panel is going to be considered alongside advice from the separate panel to become struck to examine Alberta’s existing regime managing the payment of royalties towards the Province for that extraction hydrocarbon sources.
John Vaasjo, President and Chief executive officer of Capital Power, certainly one of Alberta’s largest electricity utilities, participated in news reports conference and mentioned the utility props up new SGER policy and extra action to lessen Alberta’s GHG emissions. Capital Power is really a leader in new power generation and utilizes a mix of coal-fire, gas and wind energy generation facilities to create electricity. Capital Power has supported the us government in creating a fixed retirement agenda for coal plants and it has introduced new causes of renewable energy to promote, including its lately opened up 150 megawatt Halkirk wind farm, the biggest single wind project in Alberta at that time it had been completed.
Erectile dysfunction Whittingham, executive director from the Pembina Institute, certainly one of Canada’s leading clean energy think tanks, also took part in the press conference and mentioned the new program and commitment from the Alberta Government is “a part of the best direction”, noting that today’s announcement is the initial step toward creating a far more credible climate strategy in Alberta while using tools in position now. Whittingham noted the Government’s dedication to set a greater cost and emission reduction target on the set schedule is encouraging, however that much more encouraging was its dedication to take further action following broad based consultation.
It seems from today’s announcement, that as crucial as the alterations towards the SGER are, there’s more switch to are available in Alberta to broaden the approach it’s dealing with reducing GHG emissions.
Carbon cost increase
We’ve Got The Technology Fund credit cost effectively sets a cost ceiling for GHG emission credits and offsets in Alberta. Alberta’s program enables for using emission offsets (Offsets) and emission performance credits (EPCs) to satisfy compliance targets. Offsets originate from GHG emission reductions occurring at non-controlled facilities. Projects for example landfill methane gas capture, carbon capture and sequestration, energy-efficiency and alternative energy projects generate Offsets, as long as they satisfy the regulatory and protocol needs. EPCs may also be generated by controlled emitters who exceed their emission intensity reduction targets. A controlled facility may use its EPCs later on years or sell these to other emitters that require these to meet their targets. EPCs and Offsets typically sell for a cheap price towards the Technology Fund credit cost, since there’s a hazard of reversal connected together.
Minister Phillips mentioned the existing carbon cost per tonne, when all emissions from large emitters are taken into consideration, was effectively under CA$2 per tonne. The present CA$15 per credit cost ceiling has in the past been considered lacking to incentivize prevalent emission reduction projects and initiatives. Growing the cost to CA$30 per tonne may enhance the financial aspects of these initiatives and projects enough where they’ll be attractive for emitters and project developers to apply. It could also be a more powerful incentive for controlled facilities to lower their emissions at site to be able to manage their costs. Dentons will evaluate the impacts in greater detail in subsequent bulletins.
Emission intensity target increase
Previously, Alberta continues to be belittled that it is intensity-based system doesn’t do enough to really reduce overall emissions, since emitters could improve their aggregate emissions as lengthy his or her emissions per unit of production are decreasing to satisfy the intensity requirement. Even though the Government didn’t announce a big change towards the intensity-based approach, the rise in the reduction requirement from 12 % to twenty percent must have a fabric impact on reducing GHG emissions over a business as always scenario. Minister Phillips believed that it’ll reduce total Alberta GHG emissions by 13 MT by 2017. It will likewise possess a significant effect on the contributions towards the Global Warming and Emissions Management Fund and the level of Offset projects being carried out in Alberta. Along with one hundred percent rise in the carbon cost, the extra 66 percent of emission reductions being needed for compliance will raise the interest in a previously short way to obtain offsets. The CA$30 per tonne carbon cost should get more purchase of Offset projects and emission reduction technologies to satisfy this demand.
Cost to industry
As a result of an issue in the news conference, the Minister was requested or no determinations have been made regarding the cost to industry from the changes towards the SGER. She mentioned that, when the alterations are fully phased-in, they’re likely to cost “between 30-45 cents per barrel of bitumen and CA$3.60 per megawatt hour of electricity generation.”
Linkage along with other jurisdictions
Minister Phillips didn’t say if the updated SGER allows for emissions buying and selling along with other jurisdictions, but established that this is area of the review the expert panel could be thinking about within the coming several weeks. If linking along with other provinces or worldwide jurisdictions was permitted later on, this might further boost the interest in Offset projects in Alberta.
Dentons Global Warming Group is going to be following developments in Alberta’s new global warming plan and can keep our clients and readers updated as further developments are announced.