O. Reg. 241/19: GREENHOUSE GAS EMISSIONS PERFORMANCE STANDARDS

Environmental Protection Act

ONTARIO REGULATION 241/19

GREENHOUSE GAS EMISSIONS PERFORMANCE STANDARDS

Historical version for the period October 22, 2021 to December 12, 2022.

Last amendment: 729/21.

Legislative History: 729/21.

This is the English version of a bilingual regulation.

CONTENTS

 

Part I
Interpretation

Interpretation

1. (1) In this Regulation,

“account representative” means, when used in respect of a facility, an individual who has been identified in respect of the facility in accordance with section 7; (“représentant de comptes”)

“compliance instrument” means an emissions performance unit or excess emissions unit; (“instrument de conformité”)

“compliance obligation” means an obligation described in subsection 13 (2); (“obligation en matière de conformité”)

“compliance obligation shortfall” means the portion of a compliance obligation that is not satisfied as of the applicable date specified in subsection 13 (2); (“déficit relatif à l’obligation en matière de conformité”)

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

“covered facility” means an EPS facility that is registered under this Regulation or in respect of which registration is required under this Regulation; (“installation assujettie”)

“Director” means the Director appointed under section 5 of the Act in respect of the section of this Regulation in which the reference appears; (“directeur”)

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

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

“industrial activity” means an activity set out in Schedule 2; (“activité industrielle”)

“Methodology” means the document entitled “GHG Emissions Performance Standards and Methodology for the Determination of the Total Annual Emissions Limit”, published by the Ministry and available on a website of the Government of Ontario, as amended from time to time; (“guide de méthodologie”)

“NAICS” means the North American Industry Classification System maintained for Canada by Statistics Canada, as amended or revised from time to time; (“SCIAN”)

“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”)

“Ontario Regulation 143/16” means Ontario Regulation 143/16 (Quantification, Reporting and Verification of Greenhouse Gas Emissions) made under the Climate Change Mitigation and Low-carbon Economy Act, 2016; (“Règlement de l’Ontario 143/16”)

“Ontario Regulation 452/09” means Ontario Regulation 452/09 (Greenhouse Gas Emissions Reporting) made under the Act; (“Règlement de l’Ontario 452/09”)

“Reporting Regulation” means Ontario Regulation 390/18 (Greenhouse Gas Emissions: Quantification, Reporting and Verification) made under the Act; (“règlement sur la déclaration”)

“total annual emissions limit” means the total annual emissions limit determined under section 12; (“limite des émissions annuelles totales”)

“verification amount” has the same meaning as in the Reporting Regulation, except where otherwise specified; (“quantité de vérification”)

“verification statement” means, when used in reference to a report, the verification statement submitted in respect of the report by an accredited verification body under the Reporting Regulation; (“déclaration de vérification”)

“verified” means verified by an accredited verification body under the Reporting Regulation; (“vérifié”)

“year” means a calendar year. (“année”) O. Reg. 241/19, s. 1 (1); O. Reg. 729/21, s. 1 (1-6).

(2) Revoked: O. Reg. 729/21, s. 1 (7).

(3) In this Regulation, unless otherwise specified, a reference to Ontario Regulation 452/09 or Ontario Regulation 143/16 is a reference to the regulation as it read at any time before it was revoked. O. Reg. 241/19, s. 1 (3).

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. O. Reg. 729/21, s. 2.

(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. O. Reg. 729/21, s. 2.

(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. O. Reg. 729/21, s. 2.

(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. O. Reg. 729/21, s. 2.

Part II
Registration of EPS facility

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. O. Reg. 729/21, s. 4.

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. O. Reg. 729/21, s. 5.

(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. O. Reg. 729/21, s. 5.

(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. O. Reg. 729/21, s. 5.

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. O. Reg. 729/21, s. 6.

(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. O. Reg. 729/21, s. 6.

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. O. Reg. 729/21, s. 6.

(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. O. Reg. 729/21, s. 6.

(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. O. Reg. 729/21, s. 6.

(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). O. Reg. 729/21, s. 6.

(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. O. Reg. 729/21, s. 6.

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. O. Reg. 729/21, s. 7.

(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. O. Reg. 729/21, s. 7.

(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. O. Reg. 729/21, s. 7.

(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. O. Reg. 729/21, s. 7.

(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. O. Reg. 729/21, s. 7.

Re-registration of facility

6. (1) If the person who received the most recent confirmation of registration or re-registration in respect of a covered facility ceases to be the owner or operator of the facility and an industrial activity continues to be engaged in at the facility, the new owner or operator of the covered facility shall continue the registration of the facility by re-registering it no later than 30 days after the person who received the most recent confirmation of registration or re-registration ceased to be the owner or operator of the facility.

(2) The person re-registering the facility shall submit to the Director a form approved by the Director and shall provide all information set out in Schedule 1.

(3) Upon receipt of the form and information required under subsection (2), if the Director is satisfied that an industrial activity continues to be engaged in at the facility, the Director shall,

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

(b)  give written confirmation of the re-registration to the person who submitted the form and information.

(4) Sections 7 and 8 apply, with necessary modifications, in respect of a re-registration.

Account representatives

7. (1) A person registering or applying to register a facility shall identify at least two and no more than five account representatives who are authorized by the person to act on their behalf in respect of the facility for the purposes of this Regulation.

(2) The person registering the facility or applying to register the facility shall not identify an individual as an account representative and an identified individual shall not act as an account representative unless the individual meets the following criteria:

1.  The individual has not been found guilty of an offence under the Act.

2.  The individual has not been found guilty of an offence under the Commodity Futures Act or the Securities Act.

(3) Subject to subsection (4), the person who registered or applied to register a covered facility may, at any time after the facility is registered, remove an identified account representative or identify a new account representative who meets the criteria set out in subsection (2), by giving notice to the Director of the change and providing any updates to information set out in Schedule 1 in respect of any new account representative.

(4) The person who registered or applied to register a covered facility shall ensure that at all times, a minimum of two and a maximum of five account representatives are identified in respect of the facility.

(5) The same account representative may be identified in respect of more than one facility.

(6) If a notice identifying a new account representative in respect of a facility is given to the Director under subsection (3), the new account representative shall not act as an account representative in respect of the facility until such time as the Director provides to the person who registered or applied to register the facility written confirmation that the notice has been received by the Director.

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. O. Reg. 729/21, s. 8.

Part III
COMPLIANCe

“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. O. Reg. 729/21, s. 9.

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. O. Reg. 729/21, s. 9.

Prohibition

10. No person shall sell, trade or otherwise deal with compliance instruments, other than a person who is authorized to do so under this Regulation and who is doing so in accordance with this Regulation.

Compliance instruments

11. (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. O. Reg. 729/21, s. 10 (1).

(2) In the case of a compliance obligation shortfall in respect of a compliance period, the following rules apply:

1.  An excess emissions unit distributed in the year of the applicable date specified in subsection 13 (2) for the compliance period is not eligible for use to satisfy the compliance obligation shortfall.

2. If the expiry date assigned by the Director to an emissions performance unit is earlier than December 15 in the year in which it would be used to satisfy the compliance obligation shortfall, it is not eligible for use to satisfy the compliance obligation shortfall in that year. O. Reg. 241/19, s. 11 (2); O. Reg. 729/21, s. 10 (2).

(3) In the case of an obligation under subsection 13 (4) that arises as a result of a failure to meet the compliance obligation in respect of a compliance period, the following rules apply:

1.  Subject to paragraphs 2 and 3, a compliance instrument that is eligible for use to meet the compliance obligation in respect of the compliance period is also eligible for use to meet the obligation under subsection 13 (4).

2.  An excess emissions unit distributed in the year of the applicable date specified in subsection 13 (2) for the compliance period is not eligible for use to meet the obligation under subsection 13 (4).

3.  If the expiry date assigned by the Director to an emissions performance unit is earlier than December 15 in the year in which it would be used to meet the obligation under subsection 13 (4), it is not eligible for use to meet the obligation under subsection 13 (4) in that year. O. Reg. 241/19, s. 11 (3); O. Reg. 729/21, s. 10 (3).

(4) The Director shall, in distributing an excess emissions unit, record the year in which it is distributed. O. Reg. 241/19, s. 11 (4).

(5) The Director shall, in distributing an emissions performance unit,

(a)  record the compliance period in respect of which it is distributed; and

(b)  assign it an expiry date, which shall be December 15 in the year that is five years after the compliance period in respect of which it is distributed. O. Reg. 241/19, s. 11 (5).

(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. O. Reg. 729/21, s. 10 (4).

(7) The owner or operator may make a request under subsection (6) by,

(a)  submitting the request to the Director in the form approved by the Director; and

(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. O. Reg. 241/19, s. 11 (7); O. Reg. 729/21, s. 10 (5).

(8) If the Director receives a request and payment in accordance with subsection (7) on or before December 1 in a year, the Director shall distribute excess emissions units into the facility account no later than December 15 in that year. O. Reg. 241/19, s. 11 (8).

(9) The Director shall distribute excess emissions units in 2023, and the cost of an excess emissions unit shall be $50. O. Reg. 729/21, s. 10 (6).

(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. O. Reg. 729/21, s. 10 (6).

Determination of total annual emissions limit

12. The owner or operator of a covered facility shall determine the total annual emissions limit in respect of the facility for each compliance period in accordance with the Methodology.

Compliance obligation

13. (1) A compliance obligation described in subsection (2) applies to the owner and operator of a covered facility in respect of a compliance period if, subject to sections 14 and 15, the verified verification amount, as set out in the verification statement for a report in respect of the covered facility for the compliance period is greater than the verified total annual emissions limit, as set out in that verification statement. O. Reg. 241/19, s. 13 (1).

(2) The owner or operator of the facility shall ensure that, as of December 15 of the year following a compliance period, the facility account includes a number of compliance instruments that are eligible for use to meet the compliance obligation in respect of the compliance period that is equal to or greater than the following: the amount by which the verified verification amount, as set out in the verification statement for the report in respect of the facility for the compliance period, is greater than the verified total annual emissions limit, as set out in the verification statement for the report in respect of the facility for the compliance period. O. Reg. 241/19, s. 13 (2); O. Reg. 729/21, s. 11 (1).

(3) Revoked: O. Reg. 729/21, s. 11 (2).

(4) If a compliance obligation in respect of a compliance period is not met by the applicable date specified in subsection (2), the owner or operator of the facility in respect of which the compliance obligation applies shall comply with the following rules no later than February 15 in the following year:

1.  Additional compliance instruments that are eligible for use under this subsection, as described in subsection 11 (3), must be in the facility account.

2.  The additional compliance instruments must be in an amount equal to three times the amount of the compliance obligation shortfall. O. Reg. 241/19, s. 13 (4); O. Reg. 729/21, s. 11 (3).

Application of s. 13, adverse or no verification amount conclusion

14. (1) This section applies in respect of a covered facility for a compliance period if the verification statement in respect of the most recently prepared report under the Reporting Regulation in respect of the facility includes an adverse verification amount conclusion or no verification amount conclusion. O. Reg. 241/19, s. 14 (1).

(2) For the purposes of applying section 13, the number that is equal to 120 per cent of the highest of the following shall be substituted for the verified verification amount in respect of the facility for the compliance period:

1.  Any verification amount set out in a report prepared under the Reporting Regulation in respect of the facility.

2.  Any verification amount set out in a report prepared under Ontario Regulation 143/16 in respect of the facility.

3.  Any result of a calculation under paragraph 4 of subsection 7.3 (2) of Ontario Regulation 452/09 as it read on July 31, 2018 for the purposes of a report prepared under that Regulation in respect of the facility.

4.  Any amount required to be set out in a report under paragraph 9 of section 6 of Ontario Regulation 452/09 as it read on December 9, 2015 in respect of the facility. O. Reg. 241/19, s. 14 (2).

(3) If the number substituted is a number that is not a whole number, the number shall be rounded up to the nearest whole number. O. Reg. 241/19, s. 14 (3).

(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. O. Reg. 729/21, s. 12.

(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). O. Reg. 729/21, s. 12.

Application of s. 13, adverse or no production parameter verification conclusion

15. (1) This section applies in respect of a covered facility for a compliance period if the verification statement in respect of the report most recently prepared under the Reporting Regulation in respect of the facility includes an adverse production parameter verification conclusion or no production parameter verification conclusion. O. Reg. 241/19, s. 15 (1).

(2) For the purposes of applying section 13, the number that is equal to 80 per cent of the lowest of the following shall be substituted for the verified total annual emissions limit in respect of the facility for the compliance period:

1.  Any verification amount set out in a report prepared under the Reporting Regulation in respect of the facility.

2.  Any verification amount set out in a report prepared under Ontario Regulation 143/16 in respect of the facility.

3.  Any result of the calculation under paragraph 4 of subsection 7.3 (2) of Ontario Regulation 452/09 as it read on July 31, 2018 for the purposes of a report prepared under that Regulation in respect of the facility.

4.  Any amount required to be set out in a report under paragraph 9 of section 6 of Ontario Regulation 452/09 as it read on December 9, 2015 in respect of the facility. O. Reg. 241/19, s. 15 (2).

(3) If the number substituted is a number that is not a whole number, the number shall be rounded down to the nearest whole number. O. Reg. 241/19, s. 15 (3).

(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. O. Reg. 729/21, s. 13.

(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). O. Reg. 729/21, s. 13.

Emissions performance units

16. (1) Subject to subsections (2) and (3), the Director shall, on or before November 15 in the year after a compliance period, distribute into the facility account for a covered facility the number of emissions performance units equivalent to the amount, if any, by which the verified total annual emissions limit in respect of the facility for the compliance period is more than the verified verification amount in respect of the facility for the compliance period.

(2) Subsection (1) applies only if the verification statement in respect of the report most recently prepared in respect of the facility for the purposes of the Reporting Regulation includes a positive or qualified positive verification amount conclusion and a positive or qualified positive total annual emissions limit verification conclusion.

(3) If the verified total annual emissions limit was calculated using the Historical Facility Emissions Limit Standard method under the Methodology and the number of emissions performance units that would be distributed under subsection (2) is greater than five per cent of the verified verification amount, then the number of emissions performance units to be distributed shall be reduced to the number that is five per cent of the verified verification amount.

(4) If the result after the reduction described in subsection (3) is a number that is not a whole number, the number shall be rounded down to the nearest whole number.

Removal, retirement of compliance instruments

17. (1) The Director shall ensure that compliance instruments in a facility account that are eligible for use to meet a compliance obligation in respect of a compliance period and required for that purpose are removed from the facility account. O. Reg. 241/19, s. 17 (1).

(2) The compliance instruments mentioned in subsection (1) shall be removed on or before December 31 in the year of the applicable date specified in subsection 13 (2) and retired. O. Reg. 241/19, s. 17 (2); O. Reg. 729/21, s. 14 (1).

(3) If a facility account includes both emissions performance units and excess emissions units, the Director shall remove the compliance instruments as follows:

1.  Before removing any emissions performance units, remove all excess emissions units that are eligible for use to meet the compliance obligation in respect of the compliance period and required for that purpose.

2.  When removing emissions performance units that are eligible for use to meet the compliance obligation in respect of the compliance period and required for that purpose, begin by removing those distributed in respect of the earliest compliance period and end with those distributed in respect of the most recent compliance period. O. Reg. 241/19, s. 17 (3); O. Reg. 729/21, s. 14 (2).

(4) The Director shall ensure that compliance instruments in a facility account that are no longer eligible for use under this Regulation are removed from the facility account and retired. O. Reg. 241/19, s. 17 (4).

(5) Revoked: O. Reg. 729/21, s. 14 (3).

(6) If there is a compliance obligation shortfall, the Director shall remove compliance instruments as follows, beginning in the year following the compliance period and ending when the compliance obligation shortfall and the obligation under subsection 13 (4) in respect of the compliance period have been satisfied:

1.  As compliance instruments are transferred into the facility account at any time after the applicable date specified in subsection 13 (2), the Director shall remove compliance instruments that are eligible for use to satisfy the compliance obligation shortfall and to meet the obligation under subsection 13 (4).

2.  Subject to subsection (7), the Director shall comply with subsection (3). O. Reg. 241/19, s. 17 (6); O. Reg. 729/21, s. 14 (4).

(7) For the purposes of applying subsection (3) when there is a compliance obligation shortfall, a reference to the compliance obligation in that subsection shall be read as a reference to the compliance obligation shortfall or the obligation under subsection 13 (4). O. Reg. 241/19, s. 17 (7).

Change in owner or operator

18. (1) If the owner or operator of a covered facility ceases to be the owner or operator of the facility during a compliance period and a new person becomes the owner or operator during the compliance period and an industrial activity continues to be engaged in at the facility,

(a)  subsections 13 (1), (2) and (4) cease to apply to the previous owner or operator in respect of the compliance period; and

(b)  Parts III and IV apply to the new owner or operator as if the new owner or operator had been the owner or operator of the facility during the entire compliance period. O. Reg. 241/19, s. 18 (1); O. Reg. 729/21, s. 15 (1).

(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. O. Reg. 729/21, s. 15 (2).

Authorized transfers between facility accounts

19. (1) If a covered facility is re-registered under section 6, an account representative in respect of the facility under the previous registration may, by giving a written notice to the Director, request that the Director transfer compliance instruments from the previous facility account to the new facility account. O. Reg. 241/19, s. 19 (1).

(2) If two covered facilities are owned by the same person, an account representative in respect of one of the facilities may, by giving a written notice to the Director, request that the Director transfer compliance instruments from the facility account for that facility to the facility account of the other facility. O. Reg. 241/19, s. 19 (2); O. Reg. 729/21, s. 16 (1).

(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. O. Reg. 729/21, s. 16 (2).

(4) For the purposes of subsections (1), (2) and (3), the notice shall include the following:

1.  The account number assigned by the Ministry to each facility account involved in the transfer.

2.  The total number of emissions performance units to be transferred and the total number of excess emissions units to be transferred.

3.  For each emissions performance unit to be transferred, the compliance period in respect of which it was distributed.

4.  For each excess emissions unit to be transferred, the year in which it was distributed.

5.  If the notice is under subsection (3), the price to be paid for each emissions performance unit under the agreement entered into between the transferor and the transferee.

6.  A statement signed by an account representative in respect of each facility involved in the transfer, attesting that the account representative authorizes the transfer and that the information included in the notice is accurate.

7.  The date on which the request is submitted. O. Reg. 241/19, s. 19 (4).

(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. O. Reg. 729/21, s. 16 (3).

(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. O. Reg. 729/21, s. 16 (3).

(6) The Director shall refuse to transfer compliance instruments if the Director is of the opinion that,

(a)  the transfer would result in failure to comply with this Regulation;

(b)  there are reasonable grounds to believe that an offence has been committed under the Act in relation to the request; or

(c)  the request contains errors, omissions or is otherwise incomplete. O. Reg. 241/19, s. 19 (6).

(7) If the Director refuses to transfer compliance instruments under subsection (6), the Director shall provide written reasons for the refusal to all of the account representatives who signed the statement mentioned in subsection (4). O. Reg. 241/19, s. 19 (7).

(8) The reasons provided under subsection (7) shall identify any errors or omissions in the request and shall include a description of any manner in which the request is incomplete. O. Reg. 241/19, s. 19 (8).

(9) If the Director asks an account representative or the owner or operator for information relating to the transfer of compliance instruments under this Regulation, the person to whom the request is made shall give the information to the Director by the date specified by the Director. O. Reg. 241/19, s. 19 (9).

Part IV
Miscellaneous

Retention of records

20. The owner and operator of a covered facility shall ensure that all records they created and all records created by the account representatives in respect of the facility relating to the following matters are kept in a paper or electronic format for a period of at least seven years after the records were created:

1.  Registration or re-registration under this Regulation.

2.  Transactions under this Regulation.

3.  Identification of account representatives in respect of the facility.

Giving or submitting records, form and manner

21. (1) In this Regulation, if a record is required to be given or submitted, other than a record required to be given or submitted by the Director, the record shall be submitted in a form provided by or approved by the Director and in a manner approved by the Director.

(2) The Director may require that a record that is given to the Director under this Regulation be given in an electronic format specified by the Director.

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. O. Reg. 729/21, s. 17.

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. O. Reg. 729/21, s. 17.

Notice by Director

22. For the purposes of this Regulation, the Director may give notice in an electronic format.

23. Omitted (provides for coming into force of provisions of this Regulation).

Schedule 1
Registration Information

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.  The primary address of the owner or operator and the mailing address of the owner or operator, if the mailing address is different from the primary address.

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.  The name and contact information of the individual who is the authorized representative of the owner or operator and the name and contact information of the individual who is the primary contact for the owner or operator, if the primary contact is different from the authorized representative.

4.  In the case of a corporation, the business number and the name under which the corporation operates.

5.  In the case of a partnership,

i.  the business number and the name under which the partnership operates, and

ii.  the name and contact information of each partner, or, in the case of a limited partnership, the name and contact information of each partner and general partner.

6.  In the case of a sole proprietorship, the business number, if applicable, and the name under which the sole proprietorship operates.

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.

11.  In respect of at least two individuals being identified as account representatives in respect of the facility, each individual’s name, job title, address, telephone number and email address.

12.  A statement signed by each individual identified as an account representative in respect of the facility, attesting that,

i.  the individual meets the criteria set out in subsection 7 (2),

ii.  the individual has been identified as a person authorized to act as an account representative in respect of the facility,

iii.  the individual undertakes to comply with this Regulation, and

iv.  the information included in the statement is true and accurate.

13.  A statement signed by a chief officer or a resolution of the board of directors of the owner or operator of the facility, confirming that each individual mentioned in paragraph 12 has been identified as an account representative in respect of the facility and is authorized to act as an account representative in respect of the facility on behalf of the owner or operator.

14.  Such other information in respect of the owner or operator of a facility as may be specified by the Minister of the Environment under section 171 of the Greenhouse Gas Pollution Pricing Act (Canada).

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.

O. Reg. 241/19, Sched. 1; O. Reg. 729/21, s. 18.

Schedule 2
Industrial activities

1.  Smelting or refining, from feedstock that comes primarily from ore, of at least one of the following metals: nickel, copper, zinc, lead, or cobalt.

2.  Extracting, processing and producing bitumen or crude oil.

3.  Upgrading of bitumen or heavy oil to produce synthetic crude oil.

4.  Petroleum refining through,

i.  the distillation of crude oil, or

ii.  cracking, rearranging or reforming unfinished petroleum derivatives.

5.  Processing of natural gas, including processing to produce natural gas liquids.

6.  Natural gas transmission.

7.  Producing hydrogen gas using steam hydrocarbon reforming or partial oxidation of hydrocarbons.

8.  Producing cement from clinker.

9.  Producing grain ethanol for use in an industrial or fuel application.

10.  Producing carbon black in any form, including pellets and powders, using thermal oxidation or thermal decomposition of hydrocarbon feedstock.

11.  Producing 2-methylpenta-methylenediamine (MPMD).

12.  Producing resins or fibres of Nylon 6 or Nylon 6,6.

13.  Producing petrochemicals, other than producing them as a byproduct, from feedstocks derived from petroleum or from petroleum and liquefied natural gas, including producing the following petrochemicals:

i.  Hydrogen gas, ethylene, propylene, butadiene and pyrolysis gas from steam cracking.

ii.  Aromatic cyclic hydrocarbons.

iii.  Higher olefins.

iv.  Hydrocarbon solvents.

v.  Styrene.

vi.  Polyethylene.

14.  Producing vaccines for human or animal use.

15.  Producing iron ore pellets from iron ore concentrate.

16.  Producing steel from feedstock that comes primarily from iron or scrap steel.

17.  Producing iron or steel from smelted iron ore or producing metallurgical coke.

18.  Producing lime from limestone using a kiln.

19.  Producing coal by mining coal deposits.

20.  Producing metal or diamonds from the mining or milling of ore or kimberlite.

21.  Calcining coal to produce char.

22.  Producing activated carbon from coal.

23.  Producing nitric acid by the catalytic oxidation of ammonia.

24.  Producing anhydrous ammonia or aqueous ammonia by the steam reforming of a hydrocarbon.

25.  Industrial processing of potatoes or oilseeds for human or animal consumption.

26.  Producing ethanol by distillation for use in the production of alcoholic beverages.

27.  Processing corn through wet milling.

28.  Producing citric acid.

29.  Producing refined sugar from raw cane sugar.

30.  Producing potash from the mining and refining of potash ore.

31.  Producing pulp from wood or other plant material or producing paper or any product derived directly from pulp or a pulping process.

32.  Producing brick or other products made from clay or shale using a kiln.

33.  Assembling four-wheeled self-propelled vehicles that are designed for use on a highway and that have a gross vehicle weight rating of less than 4,536 kg (10,000 pounds).

34.  Producing glass using a furnace.

35.  Producing gypsum products.

36.  Producing mineral wool insulation, other than glass wool.

37.  Producing metal tubes.

38.  Generating electricity using fossil fuels.

39.  Engaging in an activity described under any of the following NAICS codes:

i.  2123 (Non-metallic mineral mining and quarrying).

ii.  3112, 3118, 3119 (Miscellaneous food manufacturing).

iii.  3113 (Sugar and confectionery product manufacturing).

iv.  321 (Wood product manufacturing).

v.  324 (Petroleum and coal product manufacturing).

vi.  3251, 3252, 3259 (Other chemical manufacturing).

vii.  3254 (Pharmaceutical and medicine manufacturing).

viii.  3271, 3272, 3274, 3279 (Non-metallic mineral product manufacturing, except cement and concrete products).

ix.  331 (Primary metal manufacturing).

x.  33633 (Motor vehicle steering and suspension components (except spring) manufacturing).

xi.  33639 (Other motor vehicle parts manufacturing).

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).

O. Reg. 241/19, Sched. 2; O. Reg. 729/21, s. 19.