O. Reg. 729/21: GREENHOUSE GAS EMISSIONS PERFORMANCE STANDARDS

filed October 22, 2021 under Environmental Protection Act, R.S.O. 1990, c. E.19

ontario regulation 729/21

made under the

Environmental Protection Act

Made: October 21, 2021
Filed: October 22, 2021
Published on e-Laws: October 22, 2021
Printed in The Ontario Gazette: November 6, 2021

Amending O. Reg. 241/19

(GREENHOUSE GAS EMISSIONS PERFORMANCE STANDARDS)

1. (1) Subsection 1 (1) of Ontario Regulation 241/19 is amended by adding the following definition:

“compliance period” means a calendar year; (“période de conformité”)

(2) The definition of “compliance obligation shortfall” in subsection 1 (1) of the Regulation is amended by striking out “subsection 13 (3)” at the end and substituting “subsection 13 (2)”.

(3) The definition of “covered facility” in subsection 1 (1) of the Regulation is amended by striking out “a facility” and substituting “an EPS facility”.

(4) The definition of “facility” in subsection 1 (1) of the Regulation is revoked and the following substituted:

“facility” or “EPS facility” means an EPS facility within the meaning of section 1.1; (“installation”, “installation assujettie aux NRE”)

(5) The definition of “first compliance period” in subsection 1 (1) of the Regulation is revoked and the following substituted;

“first compliance period” means the first compliance period determined in accordance with section 9; (“première période de conformité”)

(6) Subsection 1 (1) of the Regulation is amended by adding the following definition:

“natural gas transmission” means the movement of natural gas in a natural gas pipeline system upstream of gate station inlet valves where pressure reduction or measuring occurs for the delivery of natural gas to consumers; (“transport de gaz naturel”)

(7) Subsection 1 (2) of the Regulation is revoked.

2. The Regulation is amended by adding the following section:

EPS facility

1.1 (1) Subject to subsections (2), (3) and (4), for the purposes of the definition of “EPS facility” in subsection 1 (1), any of the following constitutes an EPS facility:

1. The following, if they are operated in an integrated manner to carry out an industrial activity and have at least one common owner or operator:

i. Sites at which the industrial activity is carried out and the buildings, equipment and other structures and stationary items located on those sites.

ii. Any other sites used in conjunction with the industrial activity, including a quarry, tailings pond, wastewater lagoon or pond and landfill.

2. The portion of a natural gas pipeline system within Ontario that is used in natural gas transmission, including associated installations and equipment owned by the same owner or operator and operated in an integrated manner.

(2) Any part of a public road or of a railway track that is bordered on both sides by a facility and used to carry out the facility’s industrial activities is considered to be part of the facility.

(3) For greater certainty, buildings that are used for legal, administrative or management purposes and that are not located where an industrial activity is carried out do not form part of a facility.

(4) For the purposes of this Regulation, separate sites are operated in an integrated manner if any of the following occurs between them:

1. Transfer of intermediate products, final products, by-products, by-product fuels or other material for processing, packaging or shipping.

2. Transfer of energy, including steam, cooling media or electricity, generated at one of them and used at another, other than the transfer of common fuels directly from one to another.

3. The heading to Part II of the Regulation is amended by striking out “facility” and substituting “EPS facility”.

4. Section 2 of the Regulation is revoked and the following substituted:

EPS facilities for which registration is required

2. The owner or operator of an EPS facility shall register the facility with the Director in the first year in which all of the following criteria are met in respect of the facility:

1. As a result of greenhouse gas emissions related to the EPS facility in 2014 or any subsequent year, the owner or operator of the facility is or was required, or a previous owner or operator of the facility was required, to report under any of the following, including, for greater certainty, with respect to any site that forms part of the EPS facility and that was a facility under any previous definition of “facility”:

i. The Reporting Regulation.

ii. Ontario Regulation 452/09.

iii. Ontario Regulation 143/16.

2. The following amount in respect of the facility in a year, as set out in one of the reports mentioned in paragraph 1, was at least 50,000 tonnes of CO₂e:

i. In a report under the Reporting Regulation, the reporting amount within the meaning of that Regulation.

ii. In a report under Ontario Regulation 452/09, the result of the calculation under clause 7.3 (1) (c) of that Regulation as it read on July 31, 2018.

iii. In a report under Ontario Regulation 452/09, the amount required to be set out in a report under paragraph 9 of section 6 of that Regulation as it read on December 9, 2015.

iv. In a report under Ontario Regulation 143/16, the reporting amount within the meaning of that Regulation.

3. The primary activity engaged in at the facility is an industrial activity listed in paragraphs 1 to 38 of Schedule 2.

5. Section 3 of the Regulation is revoked and the following substituted:

Procedure for registering an EPS facility under s. 2

3. (1) For the purposes of registering an EPS facility under section 2, the owner or operator of the EPS facility shall take the following steps:

1. Give written notice to the Director of the intention to register the EPS facility.

2. Upon receiving a request from the Director, as described in subsection (2), comply with the request in writing.

3. Complete the registration form approved by the Director and give the completed form to the Director.

(2) Upon receipt of a notice under paragraph 1 of subsection (1) from an owner or operator, the Director shall, by written notice to the owner or operator, request that the owner or operator confirm that the information set out in Schedule 1 that is held by the Director in respect of the registration is accurate and may also request, as part of the notice, that the owner or operator provide any information set out in Schedule 1 that is not already held by the Director.

(3) If the Director is satisfied that the EPS facility meets the criteria set out in section 2 and that the steps set out in subsection (1) have been taken, the Director shall,

(a) establish a facility account, assigning a unique number to the facility account; and

(b) give the person who registered the EPS facility written confirmation that the EPS facility has been registered.

6. Section 4 of the Regulation is revoked and the following substituted:

EPS facilities for which registration is optional

4. (1) The owner or operator of an EPS facility that meets all of the following criteria may apply to register the facility with the Director:

1. As a result of greenhouse gas emissions related to the EPS facility in 2014 or any subsequent year, the owner or operator of the facility or a previous owner or operator has prepared a report under any of the following, including, for greater certainty, with respect to any site that forms part of the EPS facility and that was a facility under any previous definition of “facility”:

i. The Reporting Regulation.

ii. Ontario Regulation 452/09.

iii. Ontario Regulation 143/16.

2. The following amount in respect of the EPS facility in a year, as set out in one of the reports mentioned in paragraph 1, was at least 10,000 tonnes of CO₂e:

i. In a report under the Reporting Regulation, the reporting amount within the meaning of that Regulation.

ii. In a report under Ontario Regulation 452/09, the result of the calculation under clause 7.3 (1) (c) of that Regulation as it read on July 31, 2018.

iii. In a report under Ontario Regulation 452/09, the amount required to be set out in a report under paragraph 9 of section 6 of that Regulation as it read on December 9, 2015.

iv. In a report under Ontario Regulation 143/16, the reporting amount within the meaning of that Regulation.

3. An industrial activity is engaged in at the EPS facility.

(2) The owner or operator of the EPS facility where an industrial activity is engaged in may also apply to register under subsection (1) where the EPS facility is composed of multiple sites in respect of which a report or reports have been prepared under paragraph 1 of that subsection and the sum of the amounts in paragraph 2 of that subsection for the same reporting period for all of the sites is at least 10,000 tonnes of CO₂e.

New EPS facilities

4.1 (1) The owner or operator of an EPS facility may apply to the Director to register the facility if the all of the following criteria are met:

1. The owner or operator of the EPS facility has not engaged in an industrial activity at the facility prior to the date of first production.

2. The industrial activity that is to be engaged in at the EPS facility is not one that the owner or operator or a previous owner or operator engaged in at the facility.

3. The owner or operator has a report prepared and signed by a professional engineer that demonstrates that greenhouse gas emissions in respect of the EPS facility are likely to be at least 10,000 tonnes of CO₂e equivalent in one of the three years following the year in which the date of first production occurs.

(2) An application for registration under this section must,

(a) be made on or after the EPS facility’s date of first production and no later than three years after the year of the EPS facility’s date of first production; and

(b) include a copy of the report described in paragraph 3 of subsection (1) and the information required under Schedule 1, including the information described in paragraph 15 of that Schedule.

(3) The report described in paragraph 3 of subsection (1) must contain the following information:

1. The professional engineer’s following estimates of projected emissions:

i. The annual emissions of each greenhouse gas from all specified GHG activities within the meaning of the Reporting Regulation for the facility as set out in Schedule 2 to the Reporting Regulation, expressed in tonnes.

ii. The annual greenhouse gas emissions, excluding CO₂ from combustion of biomass, from all specified GHG activities set out in Schedule 2 to the Reporting Regulation for the facility, expressed in tonnes of CO₂e.

iii. The annual emissions of each greenhouse gas associated with each industrial activity engaged in at the facility, expressed in tonnes.

iv. The annual greenhouse gas emissions associated with each industrial activity engaged in at the facility, expressed in tonnes of CO₂e.

2. A list of all units, processes, activities and operations that were taken into account in quantifying or estimating greenhouse gas emissions.

3. The details of the calculations, assumptions, material usage, level of production, energy usage and processes that informed the emission estimates.

4. Such other information as the Director may specify in respect of the estimates.

(4) The estimates described in subsection (3) must be prepared in accordance with the following:

1. The estimates of greenhouse gas emissions must be made for each greenhouse gas set out in Schedule 1 to the Reporting Regulation, and the amount of CO₂e, where applicable, must be determined by applying the global warming potential for each gas set out in Column 6 of that Schedule.

2. The expected annual production values for each activity engaged in at the facility must be obtained from the owner or operator of the facility.

3. All emissions estimates and expected values must be based on calculations that are consistent with one or more of the following:

i. The document published by the Ministry and available from the Ministry, entitled “Guideline for Quantification, Reporting and Verification of Greenhouse Gas Emissions”, as amended from time to time.

ii. The document published by the Government of Canada and available from the Government of Canada, entitled “Canada’s Greenhouse Gas Quantification Requirements”, as amended from time to time.

iii. The document published by the Government of the United States Environmental Protection Agency and available from that agency, entitled “U.S. EPA 40 CFR Part 98, Mandatory Greenhouse Gas Reporting”, as amended from time to time.

4. The same method must be used to quantify the information for each estimate for each of the years.

5. All information must, if feasible, be provided using the International System of Units (SI units).

(5) In this section,

“date of first production” means the date the EPS facility begins producing the product from the industrial activity whose production is projected to contribute either the greatest revenue or greatest greenhouse gas emissions from the facility.

7. Section 5 of the Regulation is revoked and the following substituted:

Procedure for applying to register an EPS facility under s. 4 or 4.1

5. (1) For the purposes of applying to register an EPS facility under section 4 or 4.1, the owner or operator of the facility shall take the following steps:

1. Give written notice to the Director of the intention to apply to register the EPS facility.

2. Upon receiving a request from the Director, as described in subsection (2), comply with the request in writing.

3. Complete the application form approved by the Director and give the completed form to the Director.

(2) Upon receipt of a notice under paragraph 1 of subsection (1) from an owner or operator, the Director shall, by written notice to the owner or operator, request that the owner or operator confirm that the information set out in Schedule 1 that is held by the Director in respect of the application is accurate and may also request that the owner or operator provide any information set out in Schedule 1 that is not already held by the Director.

(3) If the Director is satisfied that the facility meets the criteria set out in section 4 or 4.1and that the steps set out in subsection (1) have been taken, the Director shall,

(a) establish a facility account, assigning a unique number to the facility account; and

(b) give the person who applied for the registration written confirmation that the EPS facility has been registered.

(4) If the Director proposes to refuse an application for registration, the Director shall give written notice to the applicant, setting out the following:

1. The reasons for the proposed refusal.

2. A statement that the applicant may, no later than five days following the day on which the notice was given, submit comments in writing to the Director in respect of the proposed refusal.

(5) After considering any comments received from the applicant within the time period specified in the notice under subsection (4), the Director shall,

(a) give the applicant written confirmation that the EPS facility has been registered; or

(b) give the applicant written notice of the Director’s refusal to register the EPS facility.

8. Section 8 of the Regulation is revoked and the following substituted:

Duty to update information

8. The owner or operator of an EPS facility that has been registered or for which an application for registration is pending shall inform the Director of any change to the information required under Schedule 1 within 30 days of the change.

9. Section 9 of the Regulation is revoked and the following substituted:

“First compliance period”

9. The “first compliance period” means,

(a) 2022, with respect to a covered facility that was registered or required to be registered on or before December 31, 2021;

(b) the year following the registration under this Regulation, where the effective date of the notice of registration of a person as a registered emitter is issued under subsection 64 (2) of the Greenhouse Gas Pollution Pricing Act (Canada) from the Minister of National Revenue and the effective date is a date in the year following registration under this Regulation;

(c) the third year after the end of the first year in which the facility produces a product from an industrial activity, in the case of a covered facility registered under section 4.1; or

(d) the year that the covered facility is registered or is required to be registered, in all other cases.

Compliance

9.1 The owner and operator of a covered facility shall comply with this Part starting in the first compliance period that applies to the facility and then in each subsequent compliance period.

10. (1) Subsection 11 (1) of the Regulation is revoked and the following substituted:

Compliance instruments

(1) Subject to subsection (2), for the purposes of this Part, a compliance instrument that has been transferred into a facility account is eligible for use to meet a compliance obligation in respect of a covered facility for a compliance period if,

(a) in the case of an excess emissions unit, the excess emissions unit was distributed in any subsequent year; and

(b) in the case of an emissions performance unit, the expiry date assigned to it by the Director is not earlier than the applicable date specified in subsection 13 (2) for the compliance period.

(2) Paragraph 1 of subsection 11 (2) of the Regulation is amended by striking out “13 (3)” and substituting “13 (2)”.

(3) Paragraph 2 of subsection 11 (3) of the Regulation is amended by striking out “13 (3)” and substituting “13 (2)”.

(4) Subsection 11 (6) of the Regulation is revoked and the following substituted:

(6) On or before December 1 in any year after the first compliance period, an owner or operator of a covered facility may request that excess emissions units be distributed into the facility account by December 15 in that year.

(5) Clause 11 (7) (b) of the Regulation is revoked and the following substituted:

(b) making the applicable payment in accordance with subsection (9) to the Minister of Finance, in a form and manner provided for by a notice of the Director.

(6) Subsection 11 (9) of the Regulation is revoked and the following substituted:

(9) The Director shall distribute excess emissions units in 2023, and the cost of an excess emissions unit shall be $50.

(10) For greater certainty, an instrument is not eligible to be used to meet a compliance obligation for a compliance period or to satisfy a shortfall if the request for transfer of the instrument is made after December 1 in a year.

11. (1) Subsection 13 (2) of the Regulation is amended by striking out “the applicable date specified in subsection (3)” and substituting “December 15 of the year following a compliance period”.

(2) Subsection 13 (3) of the Regulation is revoked.

(3) Subsection 13 (4) of the Regulation is amended by striking out “subsection (3)” in the portion before paragraph 1 and substituting “subsection (2)”.

12. Section 14 of the Regulation is amended by adding the following subsections:

(4) For the purposes of this section, the Director may aggregate the amounts that were reported by facilities within the meaning of the Reporting Regulation, Ontario Regulation 143/16 or Ontario Regulation 452/09 and that are currently sites that form part of the EPS facility, to obtain an amount for the purposes of any of the paragraphs of subsection (2) for a reporting period for all the sites that form part of the covered facility, and where the Director aggregates amounts, the Director shall give notice of the aggregation to the owner or operator of the covered facility.

(5) Where the owner or operator of a facility receives a registered emitter notice under the Greenhouse Gas Pollution Pricing Act (Canada) after the first day of the first compliance period for the facility, the value determined under subsection (2) shall be multiplied by the number of days from the effective date set out in the registered emitter’s notice to December 31 of the first compliance period and then divided by the number of days in the calendar year in order to establish the compliance obligation in respect of the first compliance period, with any necessary modifications where the Director has aggregated under subsection (4).

13. Section 15 of the Regulation is amended by adding the following subsections:

14. (1) Subsection 17 (2) of the Regulation is amended by striking out “subsection 13 (3)” and substituting “subsection 13 (2)”.

(2) Paragraph 1 of subsection 17 (3) of the Regulation is amended by striking out “Subject to subsection (5), before” at the beginning and substituting “Before”.

(3) Subsection 17 (5) of the Regulation is revoked.

(4) Paragraph 1 of subsection 17 (6) of the Regulation is amended by striking out “subsection 13 (3)” and substituting “subsection 13 (2)”.

15. (1) Clause 18 (1) (a) of the Regulation is amended by striking out “subsections 13 (1), (2), (3) and (4)” at the beginning and substituting “subsections 13 (1), (2) and (4)”.

(2) Subsection 18 (2) of the Regulation is revoked and the following substituted:

(2) If a previous owner or operator was required during any previous compliance period to satisfy a compliance obligation shortfall or meet an obligation under subsection 13 (4) that arose as a result of a failure to meet the compliance obligation in respect of the previous compliance period, the obligation under subsection 13 (4) applies to the new owner or operator.

16. (1) Subsection 19 (2) of the Regulation is amended by striking out “excess emissions units” and substituting “compliance instruments”.

(2) Subsection 19 (3) of the Regulation is revoked and the following substituted:

(3) If the owner or operator of a covered facility enters into an agreement with the owner or operator of another covered facility to transfer emissions performance units from the facility account for the first facility to the facility account for the second facility, an account representative in respect of the transferee’s facility may, by written notice to the Director, request that the Director transfer emissions performance units from the facility account of the transferor’s facility to the facility account of the transferee’s facility.

(3) Subsection 19 (5) of the Regulation is revoked and the following substituted:

(5) Subject to subsection (6), if the Director receives a notice under this section on or before December 1 in a year, the Director shall transfer the compliance instruments as specified in the notice on or before December 15 in the year.

(5.1) If the Director receives a notice under this section after December 1 in any year, the Director shall transfer the compliance instruments as specified in the notice after January 1 and no later than February 15 in the year following the year the request was received if the instruments have not expired by the time of transfer.

17. The Regulation is amended by adding the following sections:

Form and manner of information

21.1 Where, under this Regulation, a person is required to notify the Director or provide information to the Director, the person shall supply the notice or information in a form and manner acceptable to the Director.

Additional information requirements

21.2 The owner or operator of an EPS facility shall provide the Director with copies of the following promptly after receiving them, and in no case more than 30 days after receiving them:

1. A statement provided by Environment Canada in respect of the facility that indicates that the facility is subject to a provincial output-based performance standards system relating to a provincial pricing mechanism for greenhouse gas emissions.

2. The notice of registration under subsection 64 (2) of the Greenhouse Gas Pollution Pricing Act (Canada) from the Minister of National Revenue setting out the effective date of registration of the owner or operator as a registered emitter in respect of the facility.

18. (1) Paragraph 1 of Schedule 1 to the Regulation is revoked and the following substituted:

1. The name and contact information of the owner or operator of the facility and each of the sites that form part of the facility and whether the owner or operator is an individual or a corporation, partnership or sole proprietor.

(2) Schedule 1 to the Regulation is amended by adding the following paragraph:

2.1 Where the facility comprises multiple sites,

i. a description of each site that forms part of the EPS facility and on what basis the site forms part of the facility, with reference to section 1.1 of this Regulation, and

ii. the address of the sites that form part of the facility, where applicable, and such supporting geographical information on the site location as may be specified by the Director.

(3) Paragraphs 7, 8, 9 and 10 of Schedule 1 to the Regulation are revoked and the following substituted:

7. A document signed by a chief officer of the owner or operator or a resolution of the board of directors of the owner or operator that sets out the following:

i. An undertaking that the chief officer or board of directors will comply with this Regulation.

ii. A statement that,

A. all the information provided under this Regulation and its Schedules is accurate, complete and true, to the best of the chief officer’s or the board of directors’ knowledge,

B. the facility meets the definition of EPS facility and, where the facility comprises multiple sites, the sites that are included in the application are part of the EPS facility, and

C. the person registering the EPS facility is the owner or operator of the facility.

8. Any unique identifiers that have been provided to the owner or operator of the facility by the Ministry in respect of the facility and each of the sites that form part of the facility, in respect of which a report is or was required under Ontario Regulation 452/09, Ontario Regulation 143/16 or the Reporting Regulation.

8.1 The name of the owner and operator of the EPS facility and each of the sites that form part of the facility.

9. All primary NAICS codes and any secondary NAICS codes related to each facility and each site that forms part of the facility.

10. Identification of each industrial activity engaged in at the facility and each site that forms part of the facility.

(4) Schedule 1 to the Regulation is amended by adding the following paragraph:

15. The following additional information, where the application is in respect of an EPS facility described in section 4.1 of this Regulation:

i. A list of each product produced for each industrial activity engaged in at the facility.

ii. The annual amount of each product that is expected to be produced during the first year in which the facility produces a product and during each of the three subsequent years, as set out in the professional engineer’s report.

iii. The annual amount of carbon dioxide equivalent that is estimated to be emitted during the first year in which the facility produces a product and during each of the three subsequent calendar years, as set out in the professional engineer’s report.

iv. The professional engineer’s report prepared in accordance with section 4.1 of this Regulation.

v. A statement, signed by a chief officer or a resolution of the board of directors of the owner or operator of the facility, that the information provided to the professional engineer in the development of the estimates in the report is complete and accurate to the best of the chief officer’s or the board of directors’ knowledge.

19. (1) Paragraph 6 of Schedule 2 to the Regulation is revoked and the following substituted:

6. Natural gas transmission.

(2) Paragraph 39 of Schedule 2 to the Regulation is amended by adding the following subparagraphs:

xii. 212220 (Gold ore and silver ore mining).

xiii. 31142 (Fruit and vegetable canning, pickling and drying).

xiv. 311611 (Animal (except poultry) slaughtering).

xv. 32222 (Paper bag and coated and treated paper manufacturing).

xvi. 32614 (Polystyrene foam product manufacturing).

xvii. 32621 (Tire manufacturing).

xviii. 33211 (Forging and stamping).

xix. 33635 (Motor vehicle transmission and power train parts manufacturing).

Commencement

20. This Regulation comes into force on the day it is filed.

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O. Reg. 729/21: GREENHOUSE GAS EMISSIONS PERFORMANCE STANDARDS

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