July 2, 2007

Alberta regulation requires major industrial facilities to reduce GHG emissions intensity by 12%

As of July 1, the Specified Gas Emitters regulation under Alberta's Climate Change and Emissions Management Amendment Act requires facilities emitting more than 100,000 tonnes of greenhouse gases per year to reduce their emissions intensity by 12%. This makes Alberta the first jurisdiction in North America to impose greenhouse gas (GHG) reductions on large industrial facilities. The province was also the first in Canada to require large industries to report their GHG emissions, under the Specified Gas Reporting regulation (EcoWeek March 12, 2007).

The regulation gives companies three ways to meet their reduction requirements. They can make operating improvements, such as installing a more efficient boiler).

They can buy Alberta-based credits, i.e from facilities within the province whose emissions are below the 100,000-tonne threshold but are voluntarily reducing their emissions. This includes projects in the forestry, agriculture and transportation sector. Alberta has released draft protocols that outline how to quantify and verify emission reductions for different types of projects.

The third option allows emitters to pay $15 for every tonne over their reduction target into Alberta's Climate Change and Emissions Management Fund. Monies from this fund will be directed to strategic projects or transformative technology aimed at reducing GHG emissions in the province. The Alberta government will determine a process for how the fund is allocated to projects that qualify.

These options give all affected sectors the flexibility to meet these reductions. They promote made-in-Alberta solutions to climate change that bolster the provincial economy and encourage investment in technology that will support larger reductions in the future. They also encourage all Albertans to reduce emissions, says Alberta Environment.

"With the tremendous growth in Alberta, we felt it was important to get industry moving on this now," said Enviroment Minister Rob Renner.

Alberta released its first climate change strategy in 2002 and Alberta Environment will be bringing out a new plan this fall. This updated plan will take into account feedback from consultations with a panel of international experts as well as the province's own residents and stakeholders. It will address issues such as technology investment, energy efficiency and conservation.

The regulations apply to about 100 large facilities which emit more than 100,000 tonnes of GHGs per year. Those facilities account for about 70% of Alberta's industrial GHG emissions. The annual cost of compliance is estimated to be $177 million, or less than one-tenth of one per cent of Alberta's nominal GDP ($242 billion in 2006).

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