On Monday, the British Columbia government introduced Bill 2, the Greenhouse Gas Industrial Reporting and Control Act, in the legislature.

The Bill, expected to be in force by the end of November, is part of the Government's LNG strategy, together with a comprehensive LNG Tax regime expected to be introduced on October 21st.

Bill 2 limits emissions from LNG facilities to the equivalent of 0.16 Tonnes of CO2 per Tonne of LNG ("T/T") produced. This emissions intensity level is, according to the government, lower than any other LNG facility in the world. The government has noted that the leading global LNG facilities produce between 0.18 and 0.27 T/T. 

Owners may meet emissions targets by trading emissions credits (through a British Columbia registry) or by contributing to a clean-technology innovation fund at a rate of $25 per Tonne of CO2.

Most of the details, including the cost of any required contributions to the fund, are still to be determined by regulation. 

The government has also stated that it will provide incentives to help facilities achieve the benchmark. For facilities producing between 0.16 and 0.23 T/T, an "escalating incentive" based on the facility's compliance costs will be provided. Sources have placed the incentive at 100% of the compliance cost at 0.16 T/T, declining to 50% at 0.23 T/T. 

The LNG industry is reserving comment on Bill 2 for the time being, pending its review of the entire package of legislation being introduced this week. Critics of the plan have noted that greenhouse gas emissions are being regulated only at the downstream / facility point of emission and that upstream GHG emissions are not subject to the regulation

We will provide a more comprehensive review and update once all legislation has been introduced.

For further information:

Bill 2, GREENHOUSE GAS INDUSTRIAL REPORTING AND CONTROL ACT

News Release, B.C. to have world’s cleanest LNG facilities