Today, the Ontario Ministry of Environment, Conservation and Parks (MECP) posted proposed amendments to the Ontario Emissions Performance Standards (EPS) regulations for comment. The proposed amendments are to support the transition from the federal Output-Based Pricing System (OBPS) to the EPS, which will be in effect January 1, 2022. The posting also includes proposed changes to the administration and enforcement of the program intended to clarify certain compliance and reporting requirements.
The deadline for comments and feedback to the proposed changes are due July 11, 2021.
The proposed changes will be made to the two regulations that support the EPS:
These changes are in addition to proposed changes that were posted for comment in December 2020, which are still under consideration.
By way of background, in September 2020 the federal government accepted Ontario’s EPS program as an alternative to the federal OBPS. Ontario’s EPS program will regulate GHG emissions from large industrial facilities by setting the standards for lowering emissions (emissions limits) that those facilities are required to meet.
*Of particular note to a number of interested stakeholders is the proposed alignment of the performance standard for electricity generation with the federal OBPS standard, by adjusting the Ontario performance standard for all fossil fuel fired electricity generation from 420 to 370 CO2e/GWh, and aligning the Ontario performance standard for compliance year 2022 with what is in effect for 2019 to 2021 under the federal OBPS.
Below is a summary of all of the proposed amendments:
1. Supporting a partial year coverage of emissions: Proposed amendments to support the partial year coverage of emissions under the EPS program.This includes adding calculations that facilities will have to use to determine the following prorated amounts:
These amounts, as set out in the verification statement, will be used to determine the facility’s compliance obligation (equal to the amount that emissions are higher than the facility’s emissions limit), or the number of emissions performance units (EPUs) to be distributed into the facility’s account (equal to the amount that emissions are lower than the facility’s emissions limit)
2. Treatment of new facilities: Align EPS program with the federal policy by allowing new eligible facilities to register during the first year the facility starts producing a product.
New facilities (excluding those where primary industrial activity is generating electricity using fossil fuel) would begin to have a compliance obligation under the EPS program once the facility has completed three years of production.To be eligible for registration, new facilities must:
3. Other administrative, technical and clarifying amendments: Additional amendments to support compliance, enforcement and administration of the program and supporting industry’s transition from the federal OBPS to Ontario’s EPS program.These include:
In addition to the opportunity to submit feedback via the ERO posting, MECP intends to hold a virtual stakeholder consultation session in the short term to provide greater detail around these proposed amendments, and gather feedback around future initiatives to support emission reductions in Ontario.