March 22, 2004

Large-facility emitters become first participants in new mandatory GHG reporting system

Facilities emitting 100 kilotonnes (kt) or more per year of greenhouse gases (GHGs), calculated as carbon dioxide equivalent (CO2e), will be the first group subject to mandatory GHG emission reporting requirements, under a reporting system to be phased in over the next several years. Environment Canada published details of the reporting requirements for this first phase, covering the 2004 calendar year, in the March 13, 2004 edition of the Canada Gazette Part I.

"Accurate, credible, up-to-date information on GHG emissions is essential to making the right policy decisions for our economy and for our environment," federal Environment Minister David Anderson noted.

The first phase focuses on approximately 250,300 facilities across Canada in all industrial sectors. Included are major industrial facilities that produce electricity, heat or steam using fossil fuels - certain power generation facilities, for example, as well as integrated steel mills, facilities involved in smelting and refining metals, petroleum refineries, and chemical producers.

GHGs subject to mandatory reporting are those specified in the Kyoto Protocol: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs). The 100 kt CO2e threshold represents the sum total mass of the individual GHGs and their global warming potential. In addition to basic facility information, reporting facilities must provide direct emissions data for CO2 CH4 and N2O from four specific sources: stationary fuel combustion, industrial process, fugitive and other. CO2 emissions from biomass combustion are to be reported separately, however. Direct emissions of HFCs and PFCs will be reported by species. Facilities must also indicate the type of estimation method used to determine the quantities reported, e.g. mass balance, emission factors, or engineering estimates. Initial reports of GHG emissions for 2004 will be due June 1, 2005.

Many of those affected by the new requirements already report their GHG emissions through mandatory or voluntary initiatives in a number of provinces. Ontario already requires mandatory GHG reporting and Alberta is expected to introduce a mandatory system soon.

The first phase lays the foundation for the development of a harmonized, national, mandatory reporting system for domestic GHG emissions. It is ultimately intended to:

*support the federal Large Final Emitters system;

*meet provincial and territorial legislative and other reporting requirements for GHG emissions and related information;

*increase the level of detail of the National GHG Inventory; and

*provide information to Canadians on GHG emissions.

"A comprehensive system to track and publish GHG emissions is a basic part of any long-term strategy to address climate change," said Matthew Bramley, director of climate change with the Pembina Institute for Appropriate Development. "This is a good start, and we look forward to working with all stakeholders as the reporting system is expanded and refined in the future."

Barry Lacombe, president of the Canadian Steel Producers Association, called the harmonized reporting system "welcome news," observing that "cost-effective improvements in energy efficiency and greenhouse gas reductions go hand in hand. This reporting will help chart sustainable development progress and make an important contribution to key sustainable development information for governments and industry," he added.

The reporting initiative is based on a co-operative effort by the federal, provincial and territorial governments, as well as broad consultations held during 2003 with industry and other stakeholders. In keeping with the desire expressed by stakeholders, the federal, provincial and territorial governments will continue working together to develop a harmonized, "single-window", domestic mandatory reporting system and to implement it in orderly phases.

This will help ensure that a fully developed and tested system, which meets the reporting needs of all jurisdictions and the public and minimizes burdens on both Canadian industry and governments, will be in place by the start of the first Kyoto Protocol commitment period between 2008 and 2012. Changes and refinements to the reporting requirements (i.e., for 2005 and later) will be preceded by further consultations with stakeholders.

A federal, provincial and territorial steering committee, reporting to a board of deputy ministers, will co-ordinate the development of the reporting system. The steering committee will receive advice from a stakeholder advisory committee to ensure timely and meaningful involvement of stakeholders in the design and development of the reporting system.

During the consultations, stakeholders were particularly interested in the choice of reporting vehicle, the organization which will be responsible for collecting the information and allowing access to it by authorized users. The government's decision to have emission reports submitted to Statistics Canada acknowledges this agency as a highly-reliable and cost-effective mechanism for reporting, with a long track record of good working relations with industry, federal, provincial and territorial governments and non-governmental organizations.

The choice of Statistics Canada leverages the considerable expertise, capacity and reputation of Canada's national statistical agency to minimize response burden while providing superior standards of data quality and security. It has a well-developed collection infrastructure and is already engaged in collecting fuel use and business production data. As a result, it will be able to integrate GHG reporting with reporting on fuel use and production. This will help fulfill the government's goal of single-window reporting that minimizes duplication and reporting burdens for both industry and governments.

Statistics Canada has the authority in its legislation to collect this information for statistical purposes pursuant to the Statistics Act and on behalf of another organization, where that organization has the authority to collect the information and to compel response. The data will be available in a timely fashion to authorized users such as federal departments and provincial/territorial authorities, whether directly from Statistics Canada where permissible by law, or through Environment Canada under authority of the Minister of the Environment, as provided through CEPA.

The authority used for mandatory reporting of GHG emissions is the Canadian Environmental Protection Act, 1999 (CEPA 1999), the only legislative instrument currently available that enables a mandatory GHG emission reporting system to be initiated in 2004.

Mandatory reporting of GHG emissions is an integral part of the federal government's commitment to incorporate key environmental indicators, such as emissions reductions, in its decision-making. It also supports Canada's international obligations under the United Nations Framework Convention on Climate Change (UNFCCC).

More information on the reporting vehicle selection process is available on-line at www.nrcan-rncan.gc.ca/lfeg-ggef/English/reportingvehicle/. More information on the Large Final Emitter System is available at www.nrcan-rncan.gc.ca/lfeg-ggef.

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