• B.C. to Implement Cap and Trade Program

Greenhouse Gas Reduction (Cap and Trade) Act (CATA) received Royal Assent on May 29, 2008. As of September 15, 2008, it has not yet come into force. When the CATA comes into force, it will form part of the Western Climate Initiative (WCI) cap and trade regulatory systems that establish an overall "cap" or limit on emissions on the one hand, while the "trade" portion of the system allows regulated emitters to buy and sell emissions allowances or buy offset units on the other.

Under the CATA, the B.C. government will establish the cap for designated large emitters by issuing a limited number of tradable compliance units (emissions allowances) for given periods of time (compliance periods). Each designated emitter will then be required to obtain a number of compliance units equivalent to the amount of regulated greenhouse gas emissions it releases within the specified compliance period. These units must then be surrendered to the government as proof of compliance.

The CATA identifies three different kinds of compliance units: (1) B.C. Allowance Units (issued by the government according to the cap specified in a given compliance period); (2) B.C. Emissions Reduction Units (offset credits from approved emission reduction or removal projects in B.C.); and (3) Recognized Compliance Units from other cap and trade systems, such as those established by the WCI.

Administrative penalties will apply as an automatic consequence of non-compliance.

For more information, please see the original News Release: http://www2.news.gov.bc.ca/news_releases_2005-2009/2008ENV0035-000462.htm

  • B.C. Establishes Carbon Tax 

British Columbia has begun the phase in of a carbon tax, which will be offset by tax cuts in other areas to be revenue-neutral. The tax is broad-based, applying to virtually all fossil fuels. The tax will be phased in, starting at a rate based on $10 per tonne of associated carbon, or carbon-equivalent, rising by $5 per year for the next four years.

The Carbon Tax Act (CTA) received Royal Assent on May 29, 2008. Part of the CTA came into force by operation of the Consular Tax Exemption Regulation (B.C. Reg. 127/2008, effective July 1, 2008), while the majority of the provisions were implemented by the Carbon Tax Regulation, which was approved and ordered by the Lieutenant Governor on June 6, 2008 and came into effect on July 1, 2008. 

The CTA imposes taxes on fuel, based on its carbon content. As of July 1, 2008, carbon tax applies to fuels, such as gasoline, diesel, natural gas, heating fuel, propane and coal, and to peat and tires when used to produce energy or heat.

For more information, please see:

http://www.bcbudget.gov.bc.ca/2008/backgrounders/ backgrounder_carbon_tax.htm

  • B.C. Introduces Renewable and Low Carbon Fuel Requirements 

The Greenhouse Gas Reduction (Renewable and Low Carbon Fuel Requirements) Act (RLCFRA) received Royal Assent on May 1, 2008. As of the date of publication, this regulation has not yet come into force.

The RLCFRA creates a regulatory framework that enables the Province to set benchmarks for the amount of renewable fuel in B.C.'s transportation fuel blends, reduce the carbon intensity of transportation fuels and meet its commitment to adopt a low-carbon fuel standard similar to that of the state of California. RLCFRA sets requirements for renewable fuel content in gasoline, diesel as well as reduced carbon intensity level which fuel suppliers must comply with. Under the RLCFRA, administrative penalties will automatically apply in cases of non-compliance.

For more information, please see:

http://www2.news.gov.bc.ca/news_releases_2005-2009/2008EMPR0022-000453.htm

  • B.C. Regulates Waste Management and Electricity Generation Facilities While Opening Opportunities to the Bio-Energy Sector

The Greenhouse Gas Reduction (Emissions Standards) Statutes Act makes amendments to both the Environmental Management Act (EMA) and the Forest Act and Forest and Range Practices Act. The amendments are intended to reduce the greenhouse gas (GHG) emissions of specific industries and to promote recovery of energy from specified GHGs and the production of bioenergy derived from Crown timber.

Some industries which operate under the Environmental Management Act (EMA), such as waste management facilities and electricity generation facilities will be required to capture, reduce, or sequester GHGs, and in some cases offset all GHG emissions to become "net zero". Where possible, they may have the option of tapping into the energy-generation potential of specified GHG emissions. Failure to comply with the new legislation may result in fines of up to $1 million or imprisonment for a term of up to six months, or both, as well as administrative penalties to enforce the offset provisions pertaining to electricity generation facilities.

Amendments to the Forest Act and Forest and Range Practices Act include provisions which encourage the use of wood residue as a source of "bioenergy", allow access to unwanted timber left at the roadside or landing, and which amend scaling requirements to facilitate the measurement of wood chips and other materials. The amendments also encourage the harvesting of beetle-attacked timber. The Government will also have the authority to enter into a forest licence with the successful applicant of a BC Hydro call for power.

For more information see:

http://www2.news.gov.bc.ca/news_releases_2005-2009/2008ENV0041-000560.htm 

B.C. Introduces new Greenhouse Gas-Reducing Vehicle Emission Standards

The Greenhouse Gas Reduction (Vehicle Emissions Standards) Act (VESA) passed third reading on May 21, 2008, and will be brought into force by the Lieutenant Governor in Council. The purpose of the Act is to reduce greenhouse gas ("GHG") emissions by 30% from 2007 levels, resulting in a reduction of 600,000 tonnes of GHG emissions annually by 2016.

Under the VESA, automakers' vehicle fleets for a model year must not exceed the fleet average GHG emission standards set by the regulations. Manufacturers can lower their fleet average GHG emissions by selling more low emission vehicles, but can continue to sell high emission vehicles so long as the fleet average GHG emissions do not exceed the set standards. If the fleet average exceeds the standards, then manufacturers must apply credits to match the amount by which the fleet average GHG emissions exceed the applicable standards. The credit system will be established by future regulations, but is expected to award credits to manufacturers whose fleet average GHG emissions are below the emission standards in a prior year. The VESA also allows for regulations which may require some manufacturers to include Zero Emission Vehicles ("ZEVs") in its vehicle fleets in the future, or to apply credits to achieve equivalence to the ZEV requirements.

Auto manufacturers will be required to submit reports to the government in accordance with the regulations, such as providing the average GHG emissions of the vehicle fleet to show compliance with the VESA. Any trade secrets or protected information required by the VESA and regulations will not be disclosed by the government, but model year reports in relation to fleet emissions and compliance reports in relation to fleet emission standards may be made public. Failure to comply with the VESA or providing false or misleading information required by the VESA can lead to administrative penalties, fines, and imprisonment.

For more information see:

http://www2.news.gov.bc.ca/news_releases_2005-2009/2008ENV0049-000653.htm