Canada launches Greenhouse Gas Offset Credit System to support a clean, green economy
June 8, 2022 – Gatineau, Quebec
Taking action to reduce carbon pollution is critical as Canada builds a strong and resilient economy and a cleaner future.
Today, the Government of Canada launched Canada’s Greenhouse Gas Offset Credit System, a key measure outlined in Canada’s 2030 Emissions Reduction Plan. The offset system will give municipalities, foresters, farmers, Indigenous communities, and others a market-based incentive to undertake innovative projects that reduce greenhouse gases (GHGs) by preventing emissions and removing GHGs from the atmosphere.
Under the new system, registered participants can carry out projects following a federal offset protocol, which sets out a consistent approach for measuring GHG emissions reductions or removals for specific types of projects. These projects can generate one tradeable offset credit for every tonne of emissions they reduce or remove from the atmosphere. Once a credit is earned, it can be sold to others to help them meet their compliance obligations or emissions reduction goals under the carbon pollution pricing system.
The Honourable Steven Guilbeault, Minister of Environment and Climate Change, today launched the first in a developing series of federal offset protocols. Under the new Landfill Methane Recovery and Destruction protocol, municipalities and other landfill operators will be able to generate offset credits for recovering landfill gas from their operations and destroying it or repurposing it into energy with technologies such as flares, boilers, turbines, and engines. Reducing greenhouse gases from waste (responsible for 7 percent of Canada’s greenhouse gases) is a key component to achieving Canada’s emissions reduction targets.
Four additional offset protocols are currently in development for activities such as advanced refrigeration, agriculture, and forest management. Environment and Climate Change Canada has also identified the next round of protocols for development, which will include a protocol for Direct Air Carbon Capture and Sequestration, technologies that directly remove carbon dioxide from the atmosphere and permanently store it underground.
Canada’s Greenhouse Gas Offset Credit System is aligned with the Pan-Canadian Greenhouse Gas Offsets Framework and incorporates expertise from across the country. Provinces including Alberta, British Columbia and Quebec have already demonstrated leadership in this area by launching provincial offset credit programs, and by sharing their experiences to help support the design of the federal system. The availability of offset credits is expected to help stimulate innovation and private sector investment in economic activities to reduce emissions, thus keeping Canada competitive in a decarbonizing economy.
For more information on Canada’s Greenhouse Gas Offset Credit System, eligible activities, and how to submit an application to register an offset project, please visit Canada.ca.
“Establishing a federal carbon offset market is a win-win for the economy and the environment. Starting with landfills, we’re putting in place a market-based mechanism to incentivize businesses and municipalities to invest in the technologies and innovations that cut pollution. Over the coming year, we will roll out more offset protocols for activities in other sectors, such as forestry and agriculture.”
– The Honourable Steven Guilbeault, Minister of Environment and Climate Change
“Agricultural producers are committed to the fight against climate change, and have made significant gains in reducing the GHG emissions intensity of the sector in recent years. We look forward to the development of specific details on how the agriculture sector can benefit under the federal offset credit system. These will allow our farmers to take advantage of new economic opportunities, while helping meet Canada’s emissions reduction goals.”
– The Honourable Marie-Claude Bibeau, Minister of Agriculture and Agri-Food
“The residents of British Columbia have long been champions in the fight against climate change and understand the critical need to reduce our emissions and protect our environment. Canada’s Greenhouse Gas Offset Credit System is an exciting opportunity for Canadian businesses and municipalities to do just that—take responsible climate action, while also earn revenue through our country’s carbon market.”
– Patrick Weiler, Member of Parliament, West Vancouver–Sunshine Coast–Sea to Sky Country
“FCM welcomes the federal government’s recent recognition that municipalities are critical to achieving Canada’s 2030 emission goals. With the right tools, local governments can play a crucial role in this effort, and the federal Greenhouse Gas Offset Credit System is one useful addition to the municipal toolbox. Today’s announcement represents important support for those municipalities, local businesses and industries looking to invest more in reducing emissions and building sustainable infrastructure in communities across the country.”
– Carole Saab, CEO, Federation of Canadian Municipalities
“Creating a system for offsetting greenhouse gas emissions is a strong step forward for helping Canadian landfill operators such as municipalities and project promoters in reducing their carbon footprint. Our team at WSP Golder has been working with the landfill gas management sector for more than 30 years, across Canada, and we welcome this opportunity to continue to help and guide these major players meet their ESG targets.”
– Olivier Joyal, Executive Vice-President, Execution and Strategy, Earth and Environment, WSP Global Inc.
The Government of Canada is taking steps to enable Indigenous Peoples to participate in Canada’s Greenhouse Gas Offset Credit System. A discussion paper on how best to facilitate Indigenous participation in the Offset System is open for comment until June 30, 2022.
Federal offset credits can be used by facilities regulated under the federal Output-Based Pricing System (OBPS) to compensate for emissions that exceed their limit. In this way, an offset credit is a substitute for direct emissions reduction, and helps reduce compliance costs and maintain business competitiveness.
To generate credits, offset projects must go beyond common practices and legal requirements, and must not already be incentivized by carbon pollution pricing. GHG reductions must also be verified by an accredited third party.
Federal offset credits can also be used by individuals or organizations for other purposes, including corporate net-zero commitments and GHG emissions reduction goals.
The Government of Canada will continue to work with provinces and territories that have their own offset systems, as well as other stakeholders, as it expands the array of project activities that are eligible under the system.
Methane—formed when organic material decomposes—is a greenhouse gas that contributes eighty-six times more to global warming over a twenty-year period than carbon dioxide.
The offset system has been designed to work with the current carbon pollution pricing system as a way to extend the price signal and incentivize companies to take actions that are above and beyond legal requirements or common practice, and that are not covered by the price on carbon pollution.
Office of the Minister of Environment and Climate Change
Environment and Climate Change Canada
819-938-3338 or 1-844-836-7799 (toll-free)
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