Alberta Carbon Levy and Carbon Competitiveness Incentive Regulation (CCIR)

Alberta Carbon Levy

Carbon Levy •  a carbon levy is charged on all transportation and heating fuels

that emit greenhouse gases when burned •  applies to fuel used, flared and vented; however, the carbon

levy rate is calculated assuming all gas is combusted, thus the global warming potential of methane released in venting is not incorporated in the carbon levy rate.

The majority of natural gas produced and used for oil and natural gas production is exempt until 2023, in order to allow industry to focus resources on methane reduction projects and activities Exemptions: •  fuel consumed in an eligible production process by small conventional oil and

gas producers (until Jan 1, 2023)

•  the use of heating fuels on sites subject to the CCIR

Alberta Carbon Levy

Carbon Competitiveness Incentive Regulation (CCIR) •  Replaced the Specified Gas Emitters Regulation (SGER) on Jan 1, 2018.

Granted equivalency by federal government. •  Applies to facilities that emitted 100,000 tonnes or more of greenhouse gases

(GHGs) in 2003, or a subsequent year •  A facility with less than 100,000 tonnes of GHGs may be eligible to opt-in to

the CCIR if it competes against a facility regulated under the CCIR or has more than 50,000 tonnes of annual emissions, high emissions-intensity and trade-exposure.

•  Opt-in date is June 1 of reporting year

•  Oil and gas facilities are not eligible to opt-in under pathway 1 (not

included in Table 1) •  Oil and gas facilities can opt-in under pathway 1, however only if

they emit >50,000 tonnes of CO2e annually

Carbon Competitiveness Incentive Regulation

Carbon Competitiveness Incentive Regulation

Built on product-based benchmarks •  Emission-intensity standard for a type of product

•  Based on production-weighted average emissions intensity and

sector specific benchmark stringency

•  Example: Where a sector demonstrates the risk of carbon leakage, benchmark stringency may be lessened to 90 percent or 100 percent of production-weighted average until the economic risk is mitigated

The CCIR compliance obligations will phase-in at 50 per cent, 75 per cent and 100 per cent of compliance obligations in 2018 through to 2020, respectively. This is a transition allowance based on historical emissions. The phase-in will also apply to credits generated under the CCIR. Allocations of free emissions will decrease at one per cent annually beginning in 2020 (no tightening rate for 2018 or 2019).

Carbon Competitiveness Incentive Regulation

Carbon Competitiveness Incentive Regulation

A facility that emits less than its annual limit will receive surplus credits for the difference between its limit and its reported emissions, where each surplus credit represents one tonne of CO2e. Surplus credits may be banked for future use toward compliance obligations (reductions in EI) or traded to another participant in the OBPS that needs to satisfy compliance obligation. An expiry period is being introduced to help ensure credits are moving through the system: •  Credits from 2014 and earlier expire in 2020 •  Credits from 2015 expire in 2021 •  Credits from 2016 expire in 2021 •  New credits from 2017 and forward have an eight-year expiry

Carbon Competitiveness Incentive Regulation

The CCIR retains flexibility for compliance, including on-site reductions and generation of emissions performance credits, use of credits or offsets, and payment to the Climate Change and Emissions Management Fund. The credit limit usage will be broken down as follows:

Credit Limit 2018 2019 2020 2021 2022

Limit on Credit Usage

New and Old 40% 40% 40% 40% 60%

New 10% 15% 20% 20%

Facilities must follow quantification and reporting standards. Those facilities emitting more than 1,000,000 tonnes of CO2e per year will be required to submit reports and compliance quarterly, as well as submit annual forecasting reports, All other facilities will continue to report annually.

Carbon Competitiveness Incentive Regulation

transparentandefficientwaytoreduceGHGemissions

Resources

Alberta Carbon Levy and Rebates Alberta Carbon Competitiveness Incentive Alberta Carbon Competitiveness Incentive Regulation (CCIR) CCIR – Overview CCIR – Fact Sheet Quantification Methodologies for the Carbon Competitiveness Incentive Regulation and the Specified Gas Reporting Regulation

transparentandefficientwaytoreduceGHG

emissions

Resources

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