On November 19, 2013, B.C.’s Minister Responsible for Core Review, Bill Bennett, announced that the province’s carbon offset program will be folded into the Ministry of Environment’s Climate Action Secretariat (CAS) while the Pacific Carbon Trust (PCT) is wound down. Minister Bennett indicated that the closure of the PCT will result in savings of approximately $5.6 million annually, part of the core review being undertaken by the provincial government to find $50 million in cost savings to meet the promise of a balanced budget in 2014. The transition of the carbon offset program to CAS will also mean a reduction in staff from 18 to 5.

The PCT is a Crown corporation established in 2008 to support the growth of a carbon offset market in BC by supplying BC-based emission offsets to its clients.  The PCT is the sole provider of offsets to BC’s public sector, which is required to achieve carbon neutral operations under the Carbon Neutral Government Regulation.  The price set by the provincial government for purchasing carbon offsets from the PCT is $25 per tonne of carbon dioxide equivalent (CO2e).  The provincial government’s commitment to carbon neutrality covers the provincial public sector including government offices, post-secondary institutions, certain Crown corporations and hospitals; in addition, special arrangements for carbon offsets are in place for the K-12 education sector. To become carbon neutral, public sector organizations must reduce emissions as much as possible each year, measure the remainder and acquire the amount of offsets required to get to zero.  2012 marked the third year in a row that the provincial public sector has achieved carbon neutrality. For 2012, the provincial public sector created 845,211 tonnes of greenhouse gas (GHG) emissions. From this total, 92,913 tonnes did not require offsetting; based on a price of $25 per tonne of CO2e, the total investment for 2012 was $18,807,450 for 752,298 tonnes of GHG emissions.

The PCT announcement left many stakeholders with questions regarding the state of PCT’s procurement program for 2013, the fate of existing contracts with the PCT and offset projects currently under consideration, transition plans, and the anticipated supply and demand for offsets in 2014.

In a stakeholder information call held jointly by the PCT and CAS on November 22, 2013, representatives from the PCT and CAS reiterated the provincial government’s commitment to carbon neutrality in the public sector and achieving BC’s greenhouse gas emissions targets.  During the call, PCT and CAS representatives were able to provide the following guidance:

  • following the announcement, the PCT is resuming commercial operations to finish its 2013 procurement program;
  • the PCT will be wound down by March 2014. During the transition period, stakeholders should continue to deal with the same PCT staff they have been dealing with to date;
  • existing contracts and current projects will be assigned to the new procurement unit at CAS.  The PCT indicated that it will not be opening any existing contracts for renegotiation;
  • the PCT will continue to negotiate contracts for additional projects as it completes its 2013 portfolio and confirmed that it will be reaching out to proponents with existing term sheets and those who have already submitted proposals; and
  • it is anticipated that 2014 will be another carbon neutral year for BC’s public sector, however no specifics are available at this time. The focus is on delivering a carbon neutral 2013 and once the new team is in place at CAS, they will turn their attention to the 2014 procurement program.

CAS has indicated that its first objective is to maintain consistency and continuity of the carbon offset program as it transitions from PCT to CAS. It is anticipated that the new team will be in place in early 2014, at which point CAS will be able to provide stakeholders with greater certainty around not only procurement processes going forward, but also on the supply and demand for offsets in 2014 and beyond.