Emissions Performance Standards program

Overview

The Emissions Performance Standards Regulation (O. Reg. 241/19) under the Environmental Protection Act, regulates greenhouse gas emissions from large facilities in the following industries:

• manufacturing
• resource
• electricity generation

The program came into full effect on January 1, 2022, and is intended to:

• encourage the industrial sector to reduce greenhouse gas emissions
• minimize competitiveness impacts and carbon leakage – the risk of production leaving the province for other jurisdictions with less stringent climate policies

Emissions performance standards are used to determine an emissions limit that industrial facilities must meet each year. The standards become stricter every year, requiring emitters to either:

• reduce emissions
• pay for exceeding the limits

Learn more about our commitments to address climate change and reduce greenhouse gas emissions.

EPS program key dates

June 1

Facility greenhouse gas (GHG) reports due to the ministry.

September 1

GHG verification reports and statements due to the ministry.

November 15

Deadline for the ministry to distribute EPUs into eligible facility accounts.

December 1

Deadline for facilities to:

• request Excess Emissions Units (EEUs) from the ministry by submitting a Request for EEUs Form and making a payment to the Minister of Finance
• request to transfer compliance instruments between facility accounts by submitting a Compliance Instrument Transfer Request Form

December 15

Deadline for facilities with a compliance obligation to have sufficient compliance instruments in their facility account. Note: The compliance instruments must have been:

1. distributed as a result of submission of a Request for EEUs Form and payment by the December 1 deadline
2. transferred as a result of submission of a Compliance Instrument Transfer Request Form by the December 1 deadline
3. pre-existing in the facility account as a result of a transaction that took place prior to December 1

December 31

Deadline for the ministry to remove and retire compliance instruments from facility accounts.

Methodology to use when calculating your total annual emissions limit (TAEL)

Facilities that are registered or required to register in the EPS program must use the following table to determine which version of the methodology to follow when calculating their total annual emissions limit (TAEL) for a given year.

This amount is required to be reported in annual greenhouse gas emissions reports submitted by June 1 (for the previous year) and verified by September 1.

The TAEL is calculated by summing all the annual activity emissions limits (AAELs) determined in accordance with the applicable methods set out in the methodology.

Registration

EPS facilities that must register

You are required by law to register your EPS facility in the Emissions Performance Standards program if it meets the definition of “EPS facility” and the following criteria under section 2 of O. Reg. 241/19:

• the owner or operator of the EPS facility was required to report the facility’s greenhouse gas emissions for 2014 or for any subsequent year
• the facility reported emissions of at least 50,000 tonnes or more of CO₂ equivalent in one or more reporting year from 2014 onward
• the primary activity at the facility is an industrial activity listed in paragraphs 1 to 38 of Schedule 2 of O. Reg. 241/19

If you meet these criteria, you are required to register in the year that you meet the requirements.

EPS facilities that may opt-in

You may choose to apply to register your EPS facility in the EPS program under section 4 of O. Reg. 241/19 if it meets the definition of “EPS facility” and meets all of the  criteria outlined under one of the following three scenarios:

1. Reported a certain amount of emissions

The facility:

• reported emissions of at least 10,000 tonnes of CO₂ equivalent in one or more reporting year from 2014 onward
• is engaged in an industrial activity listed in Schedule 2 of O. Reg. 241/19

2. Substantially completed an eligible modification

The facility:

• is engaged in an industrial activity listed in Schedule 2 of O. Reg. 241/19
• is expected to emit at least 10,000 tonnes of CO₂ equivalent within three years following the substantial completion of an eligible modification

3. Brand new facility

The facility:

• was not engaged in an industrial activity listed in Schedule 2 of O. Reg. 241/19 before the date of first production
• is expected to emit at least 10,000 tonnes of CO₂ equivalent within three years following the year in which the date of first production occurs

Industrial activities

Under the federal benchmark, the only facilities that may be covered under the EPS program are facilities whose industrial activities are assessed as a medium or high risk for:

• carbon leakage
• competitiveness impacts

The industrial activities currently covered by the EPS program, set out in Schedule 2 of O. Reg. 241/19, were previously determined to be at either a medium or high risk of carbon leakage and competitiveness impacts from carbon pollution pricing, based on our assessment approach.

If your facility’s industrial activity is not included in Schedule 2 of O. Reg. 241/19, your facility cannot be registered in the EPS program.

Facilities eligible to have their industrial activity assessed for addition to Schedule 2 of O. Reg. 241/19

If your facility is engaged in an industrial activity that is not listed in Schedule 2 of O. Reg. 241/19, you may request that your facility’s industrial activity be added provided that the facility:

• meets the definition of “EPS facility”
• reported emissions of at least 10,000 tonnes of CO₂ equivalent in one or more reporting year from 2014 onward (or is expected to emit at least 10,000 tonnes of CO₂ equivalent within three years following the substantial completion of an eligible modification)
• engages in an industrial activity that may have either a medium or high risk of carbon leakage and competitiveness impacts from carbon pollution pricing, following assessment by the ministry

Request an assessment of your facility’s industrial activity

1. Email EPSApplications@ontario.ca to request an application template.
2. Complete the application and include:
   1. a statement that the application is complete, accurate and true to the best of the person’s knowledge
   2. additional details, if requested by the director
   3. a report prepared and signed by an independent third-party, where non-public information is being provided for the purpose of assessment
3. Submit the application and all documents to EPSApplications@ontario.ca with the subject line “GHGID XXXX –”

How we assess applications

Read the July 7, 2023 Environmental Registry of Ontario 019-7064 posting to learn how we will assess your facility’s industrial activity.

How to register your EPS facility

To register in Ontario’s Emissions Performance Standards program, as the owner or operator of an EPS facility, you must complete the following steps:

1. Submit a Notice of Intention (NOI) to register your facility
2. Complete and submit a registration package

Step 1: submit a Notice of Intention (NOI)

If you meet the required or optional registration criteria, you must submit a Notice of Intention to the Ministry of the Environment, Conservation and Parks.

To submit your Notice of Intention, please email EPSApplications@Ontario.ca with the following information:

• company legal name
• facility name and all Greenhouse Gas (GHG) ID(s) assigned to the facility, including those assigned to any sites that form part of the facility
• facility boundaries map in pdf format

Step 2: complete and submit a registration package

After you submit a Notice of Intention, a member of the Emissions Performance Standards registration team will provide you with a registration package and further instructions via email.

The registration package includes:

• an EPS Facility Registration form
• a Letter of Authorization template designating facility account and authorized representatives

You must complete, sign and send the registration package to EPSApplications@ontario.ca.

Step 3: registration in Emissions Performance Standards program

If your registration package is approved, you will receive a Director’s notice confirming your registration, accompanying EPS facility registration certificate and next steps.

Registered facilities can then apply to the federal government for exemption from the federal fuel charge on the fuel used at the EPS facility. Visit the Environment and Climate Change Canada (ECCC) website for more information on this process.

Starting January 1, 2022, only facilities that are registered in the EPS program are eligible for exemption from the federal fuel charge. Ontario facilities that were subject to the federal output-based pricing system (OPBS) prior to 2022 must comply with the OPBS regulation for the 2019 to 2021 period.

After registering your EPS facility

Once you are registered and have received your exemption from the federal fuel charge from the federal government (see Step 3 above), all registered facilities are required to: 

1. Provide copies of the following to the ministry within 30 days of receipt:
   • The statement provided by Environment and Climate Change Canada (ECCC) in respect to the facility.
   • The Endorsement notice as a registered emitter from the Canada Revenue Agency (CRA) setting out the effective date of fuel charge exemption. Email these documents to EPSApplications@ontario.ca with subject line: GHGID XXXX-ECCC statement & CRA notice.
2. Determine your facility’s first compliance period:
   • First compliance period is the year in which your facility receives a CRA Endorsement Notice (For example, notice effective date). It needs to be either the same year that you registered your facility or the year following your registration into the EPS program.
     • If your facility does not receive a CRA Endorsement Notice within this timeframe, your first compliance period will be the year that you registered your facility into the EPS program.
   • Exception: For facilities registered as “brand new facility,” the first compliance period is the third year following the year of first production.

Changes to registration information

You are required under section 8 of O. Reg. 241/19 to provide notification of any changes to your registration information no later than 30 days following the change.

For changes to an existing owner or operator facility’s registration information, including changes to account representatives, the authorized representative should use the:

• previous or blank EPS Facility Registration Form to indicate the changes required
• Letter of Authorization (LOA) template to confirm the new authorized and/or account representative(s) has the authority to act on behalf of the owner or operator

Once completed, the authorized representative must email a signed copy of the form and updated LOA to EPSApplications@ontario.ca.

You may contact EPSApplications@ontario.ca for a copy of the EPS Facility Registration Form, Letter of Authorization template and a tip sheet on how to submit changes to registration information.

Continuation of registration when there is a change in owner or operator

If there has been a change in ownership of a registered EPS facility, both the previous owner and the new owner have to comply with section 6 of O. Reg. 241/19 by taking the following actions within 30 days of the change in ownership:

• previous owner must notify the Director of the change in ownership by emailing EPSApplications@ontario.ca
• new owner must apply to continue the registration of the facility if:
  • they continue to engage in an in industrial activity listed under Schedule 2
  • the acquisition of the facility does not constitute a change to the composition of sites that form another registered EPS facility they own

If you are the new owner or operator of an EPS facility that must continue the registration of an EPS facility, email EPSApplications@ontario.ca to request a continuation of registration package.

A member of the Emissions Performance Standards registration team will provide you with the package, a tip sheet and further instructions via email.

The package includes:

• an EPS Change in Facility Ownership form
• a Letter of Authorization template

Once completed, the authorized representative must email a signed copy to EPSApplications@ontario.ca.

Cancellation of registration

Facilities requesting to cancel their registration in the EPS program must comply with Section 8 of O. Reg. 241/19.

You may request your facility’s registration in the EPS program be cancelled if one of the following circumstances applies:

• all industrial activities engaged in at the facility have permanently ceased
• you notified us that no industrial activities will be engaged in at the facility for at least one year
• the reporting amount in respect of the facility was less than 10,000 tonnes of CO₂e for three consecutive years
• each EPS parameter in respect of the facility was zero for five consecutive years

Note: A facility whose registration was cancelled because of a request described above will only be able to apply to register again if there is a change in ownership.

In addition, the Director will cancel an EPS facility registration if one of the following circumstances applies:

• the facility fails to meet registration requirements
• the verified TAEL is zero for two consecutive years and the facility was not temporarily shut down (refer to Section 4.1 of O. Reg. 390/18: Greenhouse Gas Emissions: Quantification, Reporting and Verification)
• the registration was not continued after a change in ownership
• the facility fails to meet its compliance obligations for multiple years

For more information on cancellation, email EPSApplications@ontario.ca.

Notifying the federal government

You must also notify the federal government when there is a change in EPS registration information pertaining to:  

• ownership
• boundaries, including changes in sites
• name
• cancellation of registration

Read the ECCC website for more information on notification.

Compliance 

An EPS facility with a compliance obligation can comply by:

• reducing GHG emissions
• obtaining compliance instruments, which include:
  • Excess emissions units (EEUs): generally non-tradeable units purchased from the Government of Ontario that must be used in the year in which they are purchased.
  • Emissions performance units (EPUs): tradeable units that are distributed to facilities whose emissions are below their limits. EPUs are bankable (For example, they can be used for compliance or traded) for up to five years from the year they are distributed.

Requests (with payment) for EEUs, and requests to transfer compliance instruments from one facility to another, must be made by December 1 to meet annual compliance obligations. Otherwise, a facility will incur an additional compliance obligation.

Payment for EEUs can be made by wire transfer or direct deposit.

An EPS facility that has a compliance obligation must have the number of compliance instruments in their facility account equal to their compliance obligation by December 15 in any given year.

Forms

Account or authorized representatives can email EPShelp@ontario.ca for copies of the following forms:

• Request for EEUs Form
• Compliance Instrument Transfer Request Form

These forms are tailored for each compliance year.

EPS Online

EPS Online lets facility account and authorized representatives view:

• current compliance obligations and distribution and transfer of EEUs and EPUs
• historical compliance information about their facility

Funding for emissions reductions projects

Ontario is reinvesting the compliance payments collected through the EPS regulation to reduce greenhouse gas emissions at eligible industrial facilities. This will also help these facilities stay competitive while supporting economic growth.

For more information about the Emissions Performance Program, including eligibility and program criteria visit our funding opportunities page.

If you have questions about this program, please contact EPPInfo@ontario.ca

For more information

If you have questions about Ontario’s Emissions Performance Standards program, contact the EPS Program Help Desk:

• Toll-free: 1-888-217-3326
• Email: EPShelp@ontario.ca