1: GHG REPORTING PROGRAM

Environment and Climate Change Canada’s (ECCC) Greenhouse Gas Reporting Program (GHGRP) describes the mandatory reporting of GHGs (CO2, CH4, N2O, SF6, HFCs, PFCs) above a certain threshold in Canada. Although it has been in effect since 2004, changes were made to the GHGRP in 2017 that lowered the reporting threshold from 50,000 tonnes of CO2e to 10,000 tonnes of CO2eq. PDAC worked with Avalon Advanced Materials to determine that large-scale exploration drilling programs (i.e. in the order of 200,000 meters/year or operations with 10 or more drills) could produce sufficient GHG emissions to trigger this monitoring and reporting requirement. If your facility* is required to report, you must do so by June 1st annually.

PDAC has developed a GHG Emissions Calculator to help you evaluate your site-level GHG emissions. The calculator is currently in the preliminary testing stage. If your organization would like to test the GHG Emissions Calculator please contact Rose Stacey at [email protected] for more information.

The flow chart below from ECCC, will also provide a better understanding of the GHGRP reporting process.

Figure 1 - Reporting Process Overview

For more information on GHGRP requirements, please see: https://www.canada.ca/en/environment-climate-change/services/climate-change/greenhouse-gas-emissions/facility-reporting.html

* ECCC defines “facility” as a contiguous facility, a pipeline transportation system or an offshore installation. A “contiguous facility” means all buildings, equipment, structures and stationary items that are located on a single site or on contiguous or adjacent sites; that are owned or operated by the same person and that function as a single integrated site; and include wastewater collection systems that discharge treated or untreated wastewater into surface waters.

2: FEDERAL CARBON PRICING “BACKSTOP”

At the end of 2016, the Government of Canada released its Pan-Canadian Framework on Clean Growth and Climate Change (the “Framework”) for mitigating the impacts of climate change and meeting Canada’s climate reduction targets (to reduce economy-wide GHG emissions by 30% below 2005 levels by 2030). A key component of the Framework was a commitment to put a price on carbon emissions across Canada by September 1, 2018 (now January 1, 2019). Provinces and territories that do not already have a carbon pricing mechanism in place, or one that meets the thresholds prescribed by the federal government, will be required to adopt the federal government’s carbon pricing “backstop” outlined in the Greenhouse Gas Pollution Pricing Act . The backstop contains two elements:

  1. A charge on fossil fuels, that is generally payable by fuel producers or distributors, with rates for each fuel that are equivalent to $10 per tonne of CO2e in 2018, rising by $10 per year to $50 per tonne CO2e in 2022, and
  2. An output-based pricing system (OBPS) for industrial facilities emitting over 50,000 tonnes of CO2eq per year.

Impact of a Carbon Price on Fuel Costs
The impact of a $10 per tonne of CO2eq emitted and $50 per tonne of CO2eq on the price of key petroleum products is shown below.  Whether the tax is paid at the pump or in a site-level carbon tax, given the hundreds of thousands of gallons of diesel that can be consumed at a drill site, the costs can add up.

Fuel

Cost/liter in 2018

Cost/liter in 2022

Gasoline

2.3 cents

11.63 cents

Diesel

2.7 cents

13.69 cents

Propane

1.5 cents

7.74 cents


For more information on the carbon pricing backstop, please visit: https://www.canada.ca/en/services/environment/weather/climatechange/technical-paper-federal-carbon-pricing-backstop.html

PDAC has developed a GHG Emissions Calculator to help you better understand your project-level carbon footprint. If your organization would like to test the GHG Emissions Calculator please contact Rose Stacey at [email protected] for more information.

For ways to reduce your GHG emissions, click here.

3: CLEAN FUEL STANDARD

On November 25, 2016, the Government of Canada announced it would consult with provinces and territories, Indigenous Peoples, industries, and NGOs to develop a Clean Fuel Standard. The standard serves to achieve 30 megatonnes of annual reductions in GHG emissions by 2030 and will apply to liquid, gaseous and solid fuels combusted for the creation of energy.

Following consultations in early 2017, the Government of Canada published the clean fuel standard regulatory framework. The framework underscores the partitioning of transportation, building, and industry sectors which will each have their own separate carbon intensity requirements and credit trading rules.

In July 2018, the Government of Canada announced it will be adjusting timelines for the development of the Clean Fuel Standard. The proposed regulations for liquid fuels, originally set to be published in fall 2018, will now be published in spring 2019 and will come into force in 2022. Regulations for gaseous and solid fuels have also been delayed until 2020, and will come into force in 2023.

For more information on the status of the Clean Fuel Standard please visit:

https://www.canada.ca/en/environment-climate-change/services/managing-pollution/energy-production/fuel-regulations/clean-fuel-standard/timelines-approach-next-steps.html