Management of Greenhouse Gas Act
The Management of Greenhouse Gas Act (the Act) received Royal Assent in June 2016. The Act targets large industrial emitters in the province with new emission reporting requirements. The Management of Greenhouse Gas Reporting Regulations set out the reporting requirements.
There are three tiers in the Act:
- Facilities that emit 15,000 tonnes of carbon dioxide (CO2) equivalent or more of greenhouse gases (GHG) in a year must report their emissions to the provincial government in accordance with the methodology laid out in the Management of Greenhouse Gas Reporting Regulations.
- Facilities that emit between 15,000 and 25,000 tonnes of CO2 equivalent of GHG in a year may apply to be designated as opted-in facilities.
- Facilities that emit more than 25,000 tonnes of CO2 equivalent of GHG are subject to annual GHG reduction targets.
There may be benefits to facilities that choose to opt in, which should be weighed against the costs of compliance with annual GHG emission reduction targets. An opted-in facility is eligible for GHG reduction credits under certain circumstances. Further, an opted-in facility may also be eligible for payments from the Greenhouse Gas Reduction Fund if it shows that (1) the money will be used to achieve a verifiable reduction in GHG emissions within a reasonable period of time, and (2) such reduction is in addition to any GHG reductions the industrial facility is required to make to achieve its annual GHG emission reduction target.
Amendments to the Act and the Revenue Administration Act were passed by the House of Assembly in December 2018. These amendments allowed for the introduction of a federally mandated price on carbon and finalized the performance standards system for large industrial facilities.
Made in-Newfoundland and Labrador carbon program
The provincial program was approved by the federal government on October 23, 2018. As of January 1, 2019, the provincial government began implementation of a “hybrid” carbon program, which has two key elements:
- A carbon tax applied to combusted fossil fuels across the economy, except where exemptions are provided, at the federally mandated price of $20/tonne of CO2 equivalent in 2020. The tax equates to 4.42 cents per litre of gasoline and 5.37 cents per litre of diesel; however, it will be offset by the respective elimination of the remaining 4-cent temporary gasoline tax and removal of the 5-cent additional diesel tax introduced in Budget 2016.
- A performance standard system for both onshore and offshore large industrial facilities and large-scale electricity generation that emit more than 25,000 tonnes of GHG emissions annually. Existing large industrial facilities and large-scale electricity generation will be required to reduce their GHG emissions by 6% in 2019, 8% in 2020, 10% in 2021, and 12% in 2022.
The provincial carbon program is projected to reduce cumulative GHG emissions by over 0.65 million tonnes between 2019-2030.
With the completion of the Muskrat Falls Hydroelectric Project and the upcoming closure of the Holyrood Generating Station, 98% of electricity consumed in Newfoundland and Labrador will be generated from renewable energy. The Muskrat Falls Hydroelectric Project will also allow the province to export clean energy to other jurisdictions.
The Way Forward on Climate Change in Newfoundland and Labrador
In 2019, the Government of Newfoundland and Labrador released its new climate change action plan, The Way Forward on Climate Change in Newfoundland and Labrador (the Plan), which sets out the province’s approach to climate change for the next five years.
Through the Plan, the province aims to reduce its GHG emissions by 30% below its 2005 level by 2030. Further, Newfoundland and Labrador has joined the other members of the Conference of New England Governors and Eastern Canadian Provinces in adopting a regional GHG reduction target for 2030. The target is to reduce regional GHG emissions by 35 to 45% below the 1990 regional GHG emissions level.