BC’s Greenhouse Gas Industrial Reporting and Control Act (the Act) came into force on January 1, 2016. The Act was originally passed by the BC legislature in November 2014 and enables performance standards to be established for industrial facilities or sectors. The Act currently sets a greenhouse (GHG) emissions benchmark for liquefied natural gas (LNG) facilities, along with an emissions benchmark for coal-based electricity generation operations. Performance standards for other industrial facilities and sectors will likely be added later on. The Act also streamlines several aspects of existing GHG legislation into a single legislative and regulatory system, including the GHG reporting framework established under the Greenhouse Gas Reduction (Cap and Trade) Act.
As reported in our earlier blog, the Act establishes a GHG emissions intensity benchmark of 0.16 carbon dioxide equivalent (CO2e) tonnes per tonne of LNG produced, which will cover all facility GHG emissions (including combustion, electricity generation, venting and fugitives) from the point when gas enters a facility to where it is loaded on to a ship or rail car to go to market. The Act defines a “facility” as including all buildings, structures, stationary items and equipment that are (i) located or used primarily on a single site, contiguous sites or adjacent sites, (ii) are controlled by the same person, and (iii) function as a single integrated site.
Three regulations necessary to implement the Act also came into effect on January 1, 2016:
- Greenhouse Gas Emission Reporting Regulation, which replaces the existing Reporting Regulation and adds compliance reporting requirements (including specific requirements for LNG operations).
- Greenhouse Gas Emission Control Regulation, which establishes the BC Carbon Registry to track compliance unit transactions and sets criteria for developing emission offsets issued by the BC government. The regulation also establishes a price of $25 for funded units issued under the Act that will be put towards a technology fund to support the development of clean technologies. Regulated operations (including LNG operations), will purchase offsets from the market or funded units from government to meet emission limits.
- Greenhouse Gas Emission Administrative Penalties and Appeals Regulation, which establishes the process for when, how much, and under what conditions administrative penalties may be levied for non-compliance with the Act or regulations. The regulation establishes a maximum monetary administrative penalty of $50,000 for failure to submit required reports or verification statements, or for failure to produce information or records for inspection. In addition, regulated entities may be required to retire compliance units in certain circumstances for non-compliance with the Act or regulations; the formulas for calculating such administrative penalties are set out in the regulation. Also, the regulation provides that certain decisions relating to methodologies, validation and verification bodies, acceptance of project plans, and the issuance of offset units may be appealed to the Environmental Appeal Board in accordance with the procedures set out in the Environmental Management Act.
Industrial operations located in British Columbia and emitting 10,000 tonnes or more of carbon dioxide equivalent emissions (CO2e) per year (excluding emissions from biomass listed in Schedule C of the regulation) have been required to report GHG emissions since 2010 (reporting operations emitting 25,000 tonnes or more of CO2e per year have also been subject to a third party verification requirement). Under the new GHG reporting framework, industrial operations will continue to report and where applicable, verify, GHG emissions as they have since 2010.