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Carbon and Greenhouse Gas Legislation in Alberta

March 2021

Carbon and greenhouse gas legislation infographic for Alberta 

Carbon pollution pricing

On June 4, 2019, Alberta repealed its provincial carbon levy, which had been in effect since January 1, 2017. As a result, Alberta’s provincial levy was replaced with the federal fuel charge under Part 1 of the Greenhouse Gas Pollution Pricing Act (GGPPA) on January 1, 2020. This individual fuel charge is imposed solely by the federal GGPPA, and not by provincial legislation.

Constitutional challenge

Following legal challenges launched by Alberta, Saskatchewan and Ontario, the Supreme Court of Canada (SCC) upheld the constitutionality of the GGPPA, with the 6-3 majority holding that federal Parliament had the jurisdiction to enact the GGPPA as a matter of “national concern.” The majority’s reasons discussed the importance of maintaining provincial autonomy and the division of powers in the Constitution, while favouring a flexible view that supports “cooperative federalism.”

The SCC’s decision overturned the Alberta Court of Appeal’s earlier ruling which held that the GGPPA is an unconstitutional intrusion into a province’s exclusive jurisdiction over its natural resources.

Technology Innovation and Emissions Reduction Regulation

The Technology Innovation and Emissions Reduction Regulation (TIER) applies to facilities in Alberta that emitted 100,000 tonnes or more of greenhouse gas (GHG) emissions annually in 2016 or a subsequent year. The TIER imposes an output-based (OPB) emissions benchmark on these facilities, specific to the facility itself or the industry in which it operates.

A TIER-regulated facility has four options for complying with the TIER’s requirements:

  • improving its facility operating efficiency
  • submitting emission performance credits
  • submitting emission offsets
  • paying for fund credits

Facilities subject to the TIER are exempt from the federal OPB pricing system established by Part 2 of the GGPPA. The regulated price for fund credits is currently set at $40 per tonne of GHG emissions for all compliance years in 2021 and beyond. As the GGPPA is anticipated to increase its pricing thresholds to $170 per tonne by 2030, the fund credit price under TIER would need to increase over time in order for facilities in the province to continue to be exempt from the federal OPB pricing system.

Facilities that emit less than 100,000 tonnes of GHG may be eligible to voluntarily opt-in to the TIER and become exempt from the federal OPB by aggregating their facilities if they

  • compete directly against a TIER-regulated facility, or
  • emit more than 10,000 tonnes of GHG emissions annually and belong to a sector with high emissions intensity and trade exposure

Capping oil sands emissions

Under the Oil Sands Emissions Limit Act, Alberta has set an annual 100 Mt GHG emissions limit on the oil sands, with provisions for cogeneration and new upgrading capacity.

Phasing out coal

In 2015, the previous provincial government announced that it would phase out GHG emissions from coal-fired electricity by 2030, and this commitment has remained intact under the current government.

Reducing methane emissions

Alberta has committed to reducing methane emissions from oil and gas operations by 45% by 2025. To do so, the province has, through the Methane Emission Reduction Regulation and Alberta Energy Regulator (AER) Directives

  • developed a joint initiative on methane reduction and verification for existing facilities, and backstopped the initiative with regulated standards that took effect in 2020
  • introduced emissions design standards for new Alberta facilities
  • improved measurement, monitoring and reporting of methane emissions, as well as leak detection and repair requirements
  • updated requirements for flaring, incinerating and venting of emissions in the upstream petroleum industry
  • provided market-based incentives for reducing emissions by introducing protocols by which facilities can generate emission offsets recognized under the TIER

The AER, along with Alberta Energy and Alberta Environment and Parks, leads the implementation of these methane standards for oil and gas operations.

Renewable Fuels Standard

The Renewable Fuels Standard, set out in the Renewable Fuels Standard Regulation, requires a minimum annual average of 5% renewable alcohol in gasoline and 2% renewable, bio-based diesel in diesel fuel sold in Alberta by fuel suppliers. Renewable fuels must demonstrate at least 25% fewer GHG emissions than the equivalent petroleum fuel under the Renewable Fuels Standard.

This regulation must be reviewed by January 1, 2022 and every five years thereafter.

Specified Gas Reporting Regulation

The Specified Gas Reporting Regulation (the Regulation) sets out the requirements for reporting on gas that has been released into the environment, and applies to facilities that emit 10,000 tonnes or more of specified gases. The Specified Gas Reporting Standard (the Standard) sets out which facilities are required to report specified gas emissions and how the information is collected. Facilities that are subject to reporting requirements under the Regulation must comply with the requirements set out in the Standard.

Facilities subject to the Regulation may ask that portions of their gas report be kept confidential for up to five years. They must ground their request on the basis that the information is commercial, financial or scientific; or that it is technical information that would reveal proprietary business, competitive or trade secret information about a specific facility, technology or corporate initiative.

The Regulation expires on December 31, 2022.

How does this policy compare with other regions in Canada?

View infographic