Environment Canada has launched Phase I of its Credit for Early Action Program, a part of its proposed intensity-based cap-and-trade regime for large industrial emitters.1 The program is designed to offer a one-time allocation of credits to those eligible parties that invested in measures to reduce their greenhouse gas (GHG) emissions between 1992 and 2006. Eligible parties will be able to use credits earned through the program to meet their compliance obligations under the proposed federal regime.

Although the federal government will not issue Early Action Credits until 2009, parties wishing to apply for credits must submit a Notice of Interest to Environment Canada by July 28, 2008. In this Notice, parties must provide Environment Canada with administrative information about the facility where the reductions took place and a description of the actions for which the applicant is seeking credit. Environment Canada is also requiring applicants to submit more detailed information by September 5, 2008.

The federal government will issue Early Action Credits worth only the equivalent of 15 megatonnes of carbon dioxide, which will be allocated to eligible parties, pro rata, between 2010 and 2012.

To be eligible for Early Action Credits, parties must prove a historical GHG reduction initiative that meets the following criteria:

  • It must have reduced emissions of carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons or sulphur hexafluorides;
  • It must have resulted in initial reductions that occurred in 1992 or later, and the reductions must have continued at least until December 31, 2006;
  • With certain exceptions, it must have occurred at a single large industrial facility in one of the sectors designated in Environment Canada’s December 2007 “Notice with respect to reporting of information on air pollutants, greenhouse gases and other substances for the 2006 calendar year;”2
  • It must have occurred at a facility where 2006 emissions or capacity exceeded the minimum threshold specified in the following table (click here) for that facility’s sector (if the facility’s sector is not specified, the threshold is zero);
  • It must have resulted in reductions beyond those that would have resulted from the business conditions that existed when the reductions first occurred; and
  • It must have resulted in GHG reductions that have not already received a credit through a mandatory program or in a voluntary system, such as the Pilot Emission Removals, Reductions and Learnings and the Greenhouse Gas Emission Reduction Trading Pilot.

For further information, please see www.ec.gc.ca/cmap-cea/default.asp?lang=En&n=B148443A-0.