Consultations on Phase II of the Greenhouse Gas Reporting Program expansion: response document

Response to the comments received on the proposed Phase 1 changes to the Greenhouse Gas Reporting Program (GHGRP).

I. Introduction: the Greenhouse Gas Reporting Program expansion

Environment and Climate Change Canada’s (ECCC) Greenhouse Gas Reporting Program (GHGRP) collects data on greenhouse gas (GHG) emissions from facilities across the country, under the authority of section 46 of the Canadian Environmental Protection Act (CEPA). Introduced in 2004, the GHGRP has provided a way for the Government of Canada to continuously track GHG emissions from individual facilities to inform the public, the National GHG InventoryFootnote 1  and regulatory initiatives.

Prior to the expansion, the GHGRP has required reporting of emission data, by aggregated emission source categories (e.g. stationary fuel combustion, industrial processes) for facilities emitting 50 kilotonnes (kt) or more of carbon dioxide (CO2) equivalent annually. In 2017, ECCC began expanding the GHGRP through the implementation of Phase I of the expansion. Phase I expanded the existing reporting requirements by:

  • lowering the reporting threshold from 50 kilotonnes (kt) to 10 kt for all facilities
  • requiring more detailed emissions data and supporting information (e.g. fuel characteristics, quantities of fuels combusted, amounts of feedstocks consumed) and, prescribing emission quantification methods, for the following list of activities and sectors:

List I: Phase I sectors/activities subject to expanded reporting

  • CO2 from carbon capture, transport and/or storage (CCTS)
  • Cement production
  • Lime production
  • Aluminium production
  • Iron and steel production

Phase II of the GHGRP expansion will similarly require reporting of more detailed emissions data and supporting information, using prescribed quantification methods, for the following list of activities and sectors:

List II: Phase II sectors/activities subject to expanded reporting

  • Mining
  • Ethanol production
  • Electricity and heat generation
  • Ammonia production
  • Nitric acid production
  • Hydrogen production
  • Petroleum refineries
  • Pulp and paper production
  • Base metal production

The expansion is intended to achieve two goals:

  1. collect detailed facility data to better serve the National GHG Inventory
  2. “level the playing field” by enhancing consistency and comparability of facility reporting across jurisdictions

Purpose: The purpose of this document is to provide an overview of stakeholder consultations relating to ECCC’s proposal to continue the expansion of the GHGRP through Phase II, and to summarize the resulting adjustments that will be made to the 2018 GHGRP Reporting Requirements and Quantification Requirements (Methods).

Expansion goal 1: strengthening Canada’s National Greenhouse Gas Inventory

A primary objective of expanding the GHGRP is to enable the direct integration of facility-level emissions data into the Inventory.

Comprehensive tracking of Canada’s GHG emissions takes place through the National Greenhouse Gas Inventory (the Inventory). The Inventory allows Canada to monitor progress toward its reduction commitments and meet its reporting obligations under the United Nations Framework Convention on Climate Change (UNFCCC). Inventory data also contribute to the development, implementation and evaluation of Canada’s climate change policies and strategies. Hence, enhancing the capacity to quantify, track and report progress on the reduction of GHG emissions (e.g. better reflect changes in emissions over time due to implementation of new technologies or practices, mitigation measures) contributes to fulfilling Canada’s international obligations and domestic climate change policy objectives.

Currently, Canada’s inventory estimates are largely developed using aggregated national, provincial and territorial data from government agencies (e.g. Statistics Canada fuel use data), industry associations and voluntary surveys. While this produces a high quality inventory, further improvements are possible. The 2006 Intergovernmental Panel on Climate Change Guidelines for National Greenhouse Gas Inventories (2006 IPCC Guidelines)Footnote 2  encourage incorporation of facility-level GHG data in determination of national GHG emissions. 

While the GHGRP has played an important quality control/verification role to date, the use of facility level GHG data in the Inventory has been hampered by the insufficient level of detail reported (i.e. basic emissions information only). Until now, facilities have not reported supporting data used to calculate emissions (e.g. fuel type and quantity, fuel properties, production data, technology or process details) or methods used. The 50 kt threshold also limited the coverage of emissions in various sectors (e.g. oil and gas, pulp and paper, chemical manufacturing), impacting the ability to compare the facility reported data with other data sets (e.g. to resolve discrepancies). The drop in threshold from 50 kt to 10 kt implemented in 2017 was expected to improve overall coverage by approximately 6%.

The annual GHG inventory should be transparent, meaning that data sources, assumptions and methodologies should be clearly explained to facilitate understanding of the emission estimates by users of the reported information.Footnote 3  By requiring the reporting of supporting information, ECCC will be able to more directly use the facility data in the Inventory, allocate data to international agreed reporting categories, isolate causes of possible discrepancies between the facility reported data and the Inventory, as well as describe calculations as required by international guidelines. The prescribed methodologies for the expanded GHGRP quantification requirements help ensure accurate, consistent and transparent reporting across all jurisdictions, meeting UNFCCC requirements.

Expansion goal 2: level playing field for greenhouse gas reporting

The second goal of expanding the GHGRP is to improve consistency, transparency, and quality of reported GHG data, aligning the federal and provincial reporting regimes where feasible, with the ultimate objective of “leveling the playing field” across Canada.

Facility-level GHG reporting programs or regulations currently exist in several provincial jurisdictions in Canada. Initiated at different points since 2003, these programs have evolved separately with differences in thresholds, data and method requirements, auditing/verification requirements, and level of detail. Five provincial jurisdictions (British Columbia, Ontario, Quebec, Nova Scotia, and Newfoundland and Labrador) have modeled their reporting programs on the Western Climate Initiative (WCI); these programs thus share many similarities. Alberta and Saskatchewan have developed new or expanded reporting programs as well, with expressed interests in building alignment with the GHGRP where possible. The Government of Canada is also moving forward with its proposed Output Based Pricing System (OBPS), which will require transparent and consistent reporting of GHG emissions.

Aligning provincial and federal reporting requirements is an important step in minimizing burden for facilities and in developing better, consistent GHG estimates. Through the Canadian Council of Ministers of the Environment (CCME), Canada is engaged with provincial and territorial governments to enhance the alignment of federal, provincial and territorial GHG emissions inventories and reporting. The CCME recognizes the importance of ongoing collaboration and information sharing as several jurisdictions seek to adopt, modify or otherwise improve their existing data collection regimes.

Some of the challenges to aligning federal and provincial programs include diverse objectives, lack of access to data due to limitations posed by confidentiality requirements, partial coverage of certain sector emissions at the national level, and gaps due to inconsistencies in requirements or scope. Enhanced consistency and comparability of GHG data across initiatives and jurisdictions will play an important role in implementing the Pan-Canadian framework on climate change and clean growth.

II. Overview of the Phase II consultation process

On September 4th, 2018 ECCC circulated consultation documents to stakeholders for comment. This began a four-week consultation, ending on October 3, 2018. The consultation period was intended to solicit feedback on key elements of the proposed phase II of the GHGRP expansion. The consultation documents provided an overview of the proposed Phase II and related changes to reporting requirements, starting with 2018 data (to be reported in 2019). 

ECCC sought broad participation in this consultation; the program team held a series of three virtual information sessions in both official languages to present information about the expansion and to answer technical questions.Footnote 4  In addition, ECCC conducted separate discussions with stakeholder groups to provide clarifications as well as responded to many questions posed via the program’s general helpline and email service. Stakeholders were able to provide written comments and/or suggestions during the information sessions or by email, until the close of the consultation period on October 3rd, 2018.

ECCC received significant input from a range of stakeholders, both current and prospective industry reporters, as well as governments and other organizations (e.g. formal submissions from 14 individual companies, 12 industry associations, one provincial government). ECCC thanks all those who participated in this process and shared their views on the proposed Phase II of the GHGRP expansion.

III. Broad themes of input/key issues raised

Similar to feedback received during Phase I of the GHGRP expansion, comments from stakeholders related to Phase II fell into three categories:

  1. concern regarding the ability to adapt to changes in requirements
  2. questions and requests requiring clarifications or adjustments to technical elements
  3. concern regarding alignment between:
    1. GHGRP and the proposed Output Based Pricing System (OBPS)
    2. GHGRP and provincial data collection programs

1) Issue: adapting to changes in requirements

A number of the comments received spoke to the difficulty for facilities to adapt to new reporting requirements given that requirements were not known and have not yet been finalized. Reporters have expressed concern that new requirements will be in effect for the 2018 data year (to be reported in 2019) while sampling and measurement for specific parameters throughout 2018 in some cases will not meet requirements and cannot be obtained retroactively.

ECCC Response: The Department is aware and appreciates the technical challenges related to the timing of new requirements. It is not expected that all facilities will have, or be able to obtain, all of the information being requested for 2018. In many cases, however, GHGRP expanded requirements are the same or similar to requirements of several provincial reporting programs. Therefore, it is reasonable to assume that this data is available. The Department expects that facilities do their best to meet the requirements, and report the best data available to them. ECCC will review the reports due in June of 2019 (2018 data), taking into consideration the need for a transitionary period to fully meet expanded reporting requirements. Reporters are encouraged to include comments in their reports related to requirements that they were unable to meet. 

2) Issue: clarifications/adjustments to technical elements

ECCC shared a comprehensive and detailed proposal package that described specific reporting requirements and a consistent methodological framework to be implemented (by industry sectors in phases I and II). Stakeholders to the GHGRP spanning a wide range of sectors and jurisdictions considered the proposal carefully, and put forward a large volume of inputs, suggestions, recommendations, requests for clarification, edits and corrections on various elements of the requirements and methods. ECCC has reviewed all of these inputs and carefully considered proposals and suggestions. The experience of many facilities who already report to the GHGRP and/or provincial reporting programs was invaluable in this process.

ECCC Response: ECCC has made numerous changes to the reporting requirements and methods.

Some changes are minor clarifications where it was clear that the intention was commonly misunderstood. In other cases, adjustments were required to parameters, methodologies, definitions, etc., that address errors, increase flexibility where possible, or provide additional clarity on calculation methodologies, information to be reported, and what is required with respect to measurement and sampling. Other modifications simplify and clarify approaches for some requirements, in order to make reporting more straightforward and to address burden. Below are examples of changes that are being implemented.

  • Clarifying requirements around the need to measure, use, and report higher heating values (HHV) of fuels. HHVs will not have to be monitored and reported if not being used to calculate emissions. ECCC will clarify what it considers to be reasonable with respect to obtaining HHVs.
  • Added flexibility around measurement and sampling requirements to further align with provincial reporting. This may need to be adjusted over time as the Department reviews the adequacy of standards being used by facilities reporting to different provincial governments.
  • Certain reporting requirements for petroleum refineries have been revised to only require higher heating values and carbon content of crude oil, propane, butane and ethanol that are used for input into the refining process.
  • Modification of emissions calculations for nitric acid production to add flexibility, for example, in the case that abatement systems are integrated within the operation process and cannot be bypassed.
  • Removal of ammonia production waste recycle stream reporting. The Department will determine if this is necessary in future reporting with respect to the ability to more accurately allocate emissions between industrial process and fuel combustion.
  • Allowance for a de minimus (0.5%) related to carbon process inputs in base metal production to better align with provincial reporting.
  • Clarification of carbonate use reporting in the pulp and paper sector.
  • Removal of monthly reporting requirements for aluminium production.
  • A number of additional corrections and clarifications which have been identified as important through the consultation and review process.

Questions and answers to commonly raised issues will be produced prior to the 2018 reporting period, to provide increased clarity.

3) Issue: Greenhouse Gas Reporting Program alignment with other data collection programs

a. Greenhouse Gas Reporting Program and Output Based Pricing System

A number of submissions referenced the need for alignment between the GHGRP and OBPS reporting requirements. The concern is that misaligned GHGRP and OBPS requirements with respect to emission quantification and reporting would lead to added burden on facilities. Also, a desire was expressed to have one unique submission that would satisfy both programs.

ECCC Response: ECCC is committed to continuing internal collaboration in order to ensure reporting requirements and systems are streamlined as much as possible, while delivering on environmental performance and meeting domestic and international reporting objectives. Currently, the OBPS refers to either GHGRP 2017 or WCI methods for emissions quantification. It was not possible to reference the updated GHGRP 2018 methods as these have not yet been published. The first set of compliance reports under the OBPS will be due in June 2020, along with GHGRP reporting of 2019 data. The Department’s intention is to continue to align reporting to minimize burden for facilities where possible. The stepwise nature of the expansion of the GHGRP and the timing of final OBPS regulations (in Spring 2019) will allow for ongoing adjustments which may result in further alignment as stakeholders share their views and experiences, and data requirements are finalized. ECCC is also assessing options for an IT solution that would link reporting between the two programs to avoid duplication in reporting of data that is required by both initiatives.

b. Greenhouse Gas Reporting Program and provincial greenhouse gas data collection programs

Eight Canadian provinces (BC, AB, SK, ON, QC, NB, NS, NL) currently collect some GHG emissions data from their facilities, with varying degrees of coverage, detail and threshold. Common concerns raised by stakeholders were that differences in methodologies would lead to increased reporting burden on facilities and the potential for public confusion if different emissions totals were published by the federal government and the provinces.

ECCC Response: ECCC has taken care to align requirements wherever possible. ECCC acknowledges that some differences exist in emissions calculation methodologies between the GHGRP and provincial programs that would lead to differences in total emissions estimates. In order to achieve the objective of collecting data that is suited for integration with national inventory reporting and to meet international requirements, there are specific items that are required for GHGRP reporting and in some cases necessarily differ from some provincial programs (e.g., use of latest National Inventory emission factors). Where differences do exist, they are often minor. The Department notes as well that minor differences in methodologies exist between the various provincial programs, and therefore, it is impossible to align perfectly with every program while maintaining consistent reporting across all facilities. In order to address public confusion, ECCC will consider including appropriate explanations to accompany the facility data it publishes.

With respect to 2018 reporting, facilities subject to GHGRP expanded reporting (List 1 and List 2) and to provincial GHG reporting programs that are very similar to the GHGRP, may avail themselves of the alternative option to upload their provincial GHG reports (as was the case for Phase I). This would apply to facilities in British Columbia, Ontario, Quebec, Nova Scotia, and Newfoundland and Labrador. The upload of provincial reports will not be available for CCTS activities. Note that this remains a provisional measure, intended to reduce the burden on facilities while ECCC analyses the potential limitations and challenges with this approach.

Figure 1 illustrates the reporting options for various types of facilities in different jurisdictions under the above approach.

Figure 1: reporting options for facilities by sector and province

A flowchart showing which compliance options will be available to facilities in different sectors and provinces. Text version below.
Long description

Figure 1 is a flowchart showing compliance options that will be available to facilities in different sectors and provinces. It starts with a question, are you a facility with emissions above 10 kilotonnes (kt) or engaged in carbon capture, transport or storage (CCTS)? If the answer is No, then the facility is not required to report its emissions, but is encouraged to submit a voluntary report. If the answer is Yes, then it splits into three categories. If the facility is engaged in activities/sectors in List 1 or List 2 or engaged in CCTS, then it is subject to the existing reporting and expanded requirements for reporting additional information. Facilities have two options to prepare their report - Option 1 allows a facility to report their information using the expanded federal reporting screens. Option 2 allows a facility to provide their provincial report. The following facilities will have the option of providing their provincial report instead:

  • facilities in British Columbia, Ontario, Quebec, Nova Scotia and or Newfoundland and Labrador

All other facilities are subject to the existing federal reporting.

Note: Existing basic GHGRP reporting requirements require emissions by source category only.

The Department would like to reiterate why it is necessary to request the same or similar data that are already provided to provincial governments. The answer remains twofold:

  1. potential differences in methodologies and reported data: A primary objective of the expanded GHGRP is to integrate the data collected in Canada’s GHG inventory for submission to the UNFCCC; adhering to international guidelines could require updated methods and additional data requirements over and above what provinces currently collect
  2. access to data: ECCC does not currently have access to data that facilities are reporting to provincial governments (other than published aggregated totals). In the case of British Columbia and Ontario, ECCC provides data collection services through its Single Window system, however data collected on behalf of these provinces are transferred directly to the respective province and cannot be viewed or used by ECCC. Lack of access to detailed data considerably slows down the assessment of perceived and real methodology differences between federal and provincial regimes, and limits ECCC’s ability to develop nationally consistent reporting requirements

British Columbia, Ontario, Quebec, Nova Scotia, and Newfoundland and Labrador have developed reporting requirements generally in line with the Western Climate Initiative (WCI). These programs line up closely with what ECCC is proposing under the expanded GHGRP, with differences primarily related to 1) emission factors (some provincial factors are not the same as current Inventory values); and 2) in some cases, these provinces do not require calculation information to be reported, while ECCC requests this information in order for the data to be integrated into the Inventory.

Other clarifications on the Greenhouse Gas Reporting Program and expansion

The following section provides details on other program-related questions raised through consultations:

Confidentiality: ECCC has processes in place to handle data considered confidential by facility reporters; there will be no change to this process with the expansion. ECCC ensures adequate protection is in place for the security of the information, including adhering to established policies and guidelines and maintaining appropriate data systems for the treatment of sensitive information, information retention and record management, physical storage, IT storage and  transmission, as well as physical access.

Reporters may submit a written request (along with supporting information for justification) that part, or all, of the information submitted be treated as confidential, based on the reasons set out in Section 52 of CEPA. For requests related to information that ECCC intends to publish, a determination will be made based on an objective analysis of the rationale.

Publication of data: ECCC intends to continue to publish the emission data annually in an aggregated format (i.e. totals by gas by facility), to provide consistent information on GHG emissions from individual facilities for the public and other data users. Integration of facility data into the national inventory will be done in a way that maintains the confidentiality of the data. As such, there will be no change in the level of data published as a result of the expansion of the program.

Assistance for Reporters: The expansion of the GHGRP has resulted in a significant increase in the number of facilities reporting to the program, including some facilities that may be new to reporting their GHG emissions. The GHGRP has a number of resources available to assist reporters in quantifying and reporting their emissions, and it will update these resources to provide additional clarification to help facilities in reporting, where needed:

  • the program will update its “Technical Guidance on Reporting GHG Emissions” which helps potential reporters to determine if they are required to submit a report, the greenhouse gases and emission sources subject to reporting, and information on methods for calculating emissions, required reporting format, etc.
  • for assistance on how to use the Single Window reporting system, the program details step-by-step instructions and makes available a series of video tutorials on a range of “how to” topics (in English and French)
  • if the guidance materials do not cover an issue or for facility-specific questions, individualized assistance is available through the program’s helpdesk services

IV. Next steps

The expansion of the GHGRP is unfolding generally as previously outlined. ECCC is working to integrate the changes outlined above into the reporting requirements and mandatory methods. Once finalized, the 2018 requirements will be published in the Canada Gazette (CEPA section 46 notice). This is expected to occur in early January 2019. Quantification requirements (methods) will also be issued concurrent to reporting requirements. Stakeholders to the GHGRP can expect to receive an update from the program once the formal 2018 Notice has been published.

As in past years, the Single Window reporting system will open to reporters in March, 2019. ECCC will publish its updated technical guidance and other resources in advance of the reporting period, and tutorial and help desk assistance will be provided during the reporting period. The deadline for reporters to complete their reports to the GHGRP remains June 1st.

ECCC intends to continue the expansion of the GHGRP in a step-wise fashion, while continuing collaboration with other related facility data initiatives with the objective of a streamlined and efficient reporting process for industrial facilities in all sectors. Consultations on Phase III of the expansion are expected to take place in 2019.

Figure 2: phases of the Greenhouse Gas Reporting Program expansion

A timeline showing the period prior to the expansion and the three phases of the Greenhouse Gas Reporting Program expansion. Text version below.
Long description

Figure 2 is a timeline showing reporting requirements prior to the expansion and the three phases of the Greenhouse Gas Reporting Program (GHGRP) expansion.

Prior to the expansion, it required reporting of basic information, such as emissions data only, and had a 50 kilotonnes (kt) threshold.

Phase I (2017 data year):

  • a 10 kt threshold is now applicable to all facilities except those involved in carbon capture, transport or storage activities (CCTS).
  • cement, lime, iron and steel, and aluminium sectors (all listed in List 1) are subject to expanded requirements and mandatory methods.
  • CCTS facilities will be subject to new requirements, no threshold and mandatory methods.

In Phase II (2018 data year):

  • mining, hydrogen production, ethanol production, petroleum refineries, electricity and heat generation, pulp and paper production, ammonia production, base metal production, and nitric acid production (all listed in List 2) will be subject to expanded requirements and mandatory methods.

Phase III will affect additional sectors, which are yet to be determined.

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