Proposal for the Output-Based Pricing System Regulations: chapter 10

Rules for calculated output-based standards

The regulations will provide a formula to calculate an output-based standard for covered facilities undertaking industrial activities. This calculated output-based standard will be used in the calculation of the limit for GHG emissions described in the section above for some covered facilities. This formula may be used in cases where a sector has only one or a very few facilities and where publication of an OBS may pose confidentiality concerns. It may also be used to calculate an OBS for industrial activities that are not covered activities.

Where this formula applies, the OBS value will be calculated the first year the facility is a covered facility. This value will then be used in the calculation of the limit for GHG emissions in the first and subsequent years.

Calculated OBS

17. The OBS for an activity described in an Application to be Designated as a Voluntary OBPS Participant, and the OBS for an activity that has an OBS listed in column 6 of Schedule 1 as Calculated, are calculated as follows:

${\text{OBS}}_{\text{Activity,}i}=\frac{\sum _{\text{Y}={\text{RY}}_{1}}^{{\text{RY}}_{n}}\left({\text{Emissions}}_{\text{fac,Y}}-{\text{Emissions}}_{\text{elec,Y}}-{\text{Allocation}}_{\text{NetTherm,Y}}-\sum _{j}{\text{Emissions}}_{\text{Other Cov Act,Y,}j}-\sum _{k}{\text{Emissions}}_{\text{OtherEligAct,Y,}k}\right)}{\sum _{\text{Y}={\text{RY}}_{1}}^{{\text{RY}}_{n}}{\text{Production}}_{\text{Y,}i}}×{\text{Factor}}_{\text{red}}$

where

RY are the reference years RY1 to RYn and are

1. for a facility where there has been a submission of the Application to be Designated as a Voluntary OBPS Participant, n is the number of reference years reported under that application and RY1 to RYn are the reference years reported under that application,
2. for a new facility to whom section 18 applies, n is equal to 2 and RY1 and RY2 are the first two full calendar years of production,
3. for a facility that is subject to the OBPS in 2019 and to which subsections (a) and (b) do not apply, n is equal to 1 and RY1 is the year 2019, and
4. in all other cases, n is equal to 1 and the reference year RY1 is the first year the facility is subject to the OBPS.

Emissionsfac, Y is the emissions from the facility for each of the reference years. The facility emissions for each reference year must be quantified in accordance with subsection 6(1) of the Greenhouse Gas Emissions Information Production Order, or in the case of a facility carrying out an eligible activity, in accordance with the method used to quantify the GHG emissions from the facility in the Application to be Designated as a Voluntary OBPS Participant for the eligible activity;

Emissionselec, Y is the emissions from the generation of fossil fuel-fired electricity generated at the facility for each of the reference years. The emissions from the generation of fossil fuel electricity for each reference year must be quantified in accordance with subsection 6(4) of the Greenhouse Gas Emissions Information Production Order, or in the case of a facility carrying out an eligible activity, in accordance with the method used to quantify the emissions from the generation of fossil fuel-fired electricity generated at the facility in the Application to be Designated as a Voluntary OBPS Participant for the eligible activity;

AllocationNetThermal, Y, is the allocation for net thermal energy for each of the reference years and is

1. calculated in accordance with the formula, unless paragraph (b) applies:

AllocationNet Thermal, Y = AllocationRateTE × (SalesY – PurchasesY) × RHY

where

Allocation RateTE is equal to 0.062 t/GJ;

PurchasesY is, for a facility whose main activity is a covered or eligible activity the quantity of purchases of thermal energy, expressed in GJ, that is purchased from a covered facility in each reference year. The quantity of purchases of thermal energy for each reference year must be quantified in accordance with section 17.1 of the Greenhouse Gas Emissions Information Production Order, or in the case of a facility carrying out an eligible activity, in accordance with the method used to quantify the purchases of thermal energy in the Application to be Designated as a Voluntary OBPS Participant for the eligible activity;

SalesY is the sales of thermal energy from a covered facility to a facility whose main activity is a covered or eligible activity in each of the reference years. The quantity of sales of thermal energy for each reference year must be quantified pursuant to paragraph 9(3)(a) or 10(2)(a) of the Greenhouse Gas Emissions Information Production Order, or in the case of a facility carrying out an eligible activity, in accordance with the method used to quantify sales of thermal energy in the Application to be Designated as a Voluntary OBPS Participant for the eligible activity;

RHY is the ratio of heat from the combustion of fossil fuel for the reference year Y,

where

1. If SalesY is greater than PurchasesY,RHY is the ratio of heat from the combustion of fossil fuel for the facility for the reference year Y, quantified in accordance with subsection 9(4) or (5) or paragraph 10(2)(b) of the Greenhouse Gas Emissions Information Production Order, or in the case of a facility carrying out an eligible activity, in accordance with the method used to quantify the ratio of heat from the combustion of fossil fuel in the Application to be Designated as a Voluntary OBPS Participant for the eligible activity, or where none can be calculated, RH is equal to 1, and
2. If SalesY is less than PurchasesY, RHY is the ratio of heat from the combustion of fossil fuel for the year Y quantified in accordance with section 17.1 of the Greenhouse Gas Emissions Information Production Order, or in the case of a facility carrying out an eligible activity, in accordance with the method used to quantify the ratio of heat from the combustion of fossil fuel in the Application to be Designated as a Voluntary OBPS Participant for the eligible activity, or where none can be calculated, RH is equal to 1; or
2. if

$\frac{\sum _{\text{Y}={\text{RY}}_{i}}^{{\text{RY}}_{n}}{\text{Allocation}}_{\text{NetTherm,Y}}}{n}<0.015×\frac{\sum _{\text{Y}={\text{RY}}_{i}}^{{\text{RY}}_{n}}{\text{Emissions}}_{\text{fac,Y}}}{n}$ ,

AllocationNetTherm, Y = 0 for all Y;

EmissionsOtherCovAct, Y, j is the emissions for each reference year Y that is associated with each of the j covered industrial activities undertaken at the facility. It does not include the emissions associated with the covered industrial activity i that the OBS is being calculated for, or any fossil fuel fired electricity generated on-site. The emissions associated with each covered industrial activity j for each reference year must be quantified in accordance with subsection 6(3) of the Greenhouse Gas Emissions Information Production Order or in the case of a facility that also carries out an eligible activity, in accordance with the method used to quantify the GHG emissions associated with other covered activities in the Application to be Designated as a Voluntary OBPS Participant for the eligible activity;

EmissionsOtherEligAct, Y, k is the emissions for each reference year Y that is associated with each eligible activity k undertaken at the facility but not including the activity i the OBS is calculated for or any fossil fuel fired electricity generated onsite. Emissions for each eligible activity k and for each reference year Y must be quantified in accordance with the method used to quantify this information in the Application to be Designated as a Voluntary OBPS Participant for the eligible activity;

ProductionY, i is

1. where the activity i is a covered industrial activity, the production for the covered industrial activity i for each reference year Y quantified in accordance with section 9(1) of the Greenhouse Gas Emissions Information Production Order, and
2. in any other case, the production for the eligible activity i for each of the reference years Y must be quantified in accordance with the method used to quantify this information in the Application to be Designated as a Voluntary OBPS Participant for the eligible activity i for each reference year Y; and

Factorred is the factor pertaining to the required GHG emissions reduction and equals

1. 95% for a covered industrial activity listed in items 8 and 18 of Schedule 1;
2. 90% for a covered industrial activity listed in items 13, 16, 17, 23 and 24 of Schedule 1; and
3. 80% for all other activities not listed in paragraphs (a) or (b).