Proposal for the Output-Based Pricing System Regulations: chapter 8

To address the possibility that some or all of a facility’s GHG emissions are permanently stored (for example, underground in a suitable geological formation), the regulations will require that net GHG emissions be calculated. The net emissions will be the quantified GHG emissions for the facility less the amount of carbon dioxide that is permanently stored—and demonstrated to be so. The regulations will require that information related to the permanent storage project be submitted in the facility report and undergo verification by a third party.

Calculation of net GHG emissions

15. (1) For the purpose of section 16 and when continuous emission monitoring system are not used to measure emissions of carbon dioxide, the greenhouse gases emitted by a covered facility during the applicable compliance period is equal to the net GHG emissions of the covered facility, Emissions_{net fac}, as determined in accordance with subsection (2).

Formula for net GHG emissions

(2) The person responsible for a covered facility must determine the net greenhouse gases emitted by the covered facility during an applicable compliance period in accordance with the formula:

Emissions_fac – Permanently Stored Emissions_fac

where

Emissions_fac is the total quantity of greenhouse gases emitted by the covered facility, in tonnes of CO₂e , during the applicable compliance period as determined in accordance with subsection 14(2);

Permanently Stored Emissions_fac is the total quantity of carbon dioxide generated by the covered facility, expressed in tonnes of CO₂e, that have been captured and subsequently stored in a permanent storage project that meets the criteria in subsection (3), that are determined in accordance with subsection (4), and that are reported pursuant to subsection (5).

Criteria for storage deduction

(3) For the purpose of the formula set out in subsection (2), a quantity of carbon dioxide can only be included for Permanently Stored Emissions_fac if the quantity of carbon dioxide it represents has been stored by a permanent storage project that meets the following criteria:

1. the project is a geological storage project that injects carbon dioxide:
   1. in a deep saline aquifer for the sole purpose of storage of carbon dioxide; or,
   2. in a depleted oil reservoir for the purpose of enhanced oil recovery;
2. the project is not otherwise prohibited by federal or provincial laws;
3. the carbon dioxide stored for the purposes of the project are captured, transported and stored in accordance with the laws of:
   1. Canada or a province that regulate those activities; or,
   2. the United States or one of its states that regulate those activities.

Quantification of stored emissions

(4) The person responsible for a covered facility must quantify the carbon dioxide captured, transported, injected or permanently stored at long-term geological sites—other than carbon dioxide generated from the combustion or decomposition of biomass—using the quantification method described in section 1 of the guideline entitled Canada’s Greenhouse Gas Quantification Requirements, published by the Department of the Environment in 2017.

Information to be submitted

(5) The person responsible for the covered facility that includes a quantity of carbon dioxide for Permanently Stored Emissions_fac, expressed in tonnes of CO₂e, and that does not equal zero for the purposes of the formula in subsection (2), must provide the following information in the facility report:

1. the quantity of carbon dioxide stored, in tonnes of CO₂e, for Permanently Stored Emissions_fac;
2. the type of geological storage used;
3. the location of the storage site;
4. the name and address of the owner or the operator of the storage site, if different than the person responsible for the covered facility; and
5. documentation, including contracts and invoices, that demonstrates that the carbon dioxide was captured, transported and stored in accordance with the laws of Canada or a province that regulates those activities, or the laws of the United States or one of the states of its states that regulates those activities.

Continuous emission monitoring system

(6) At a facility having in place both a carbon-capture process and a continuous emission monitoring system that is used to measure all emissions of carbon dioxide from a source that are not permanently stored, subsection (2) does not apply but subsection (4) applies, as do the criteria for storing the captured carbon dioxide in paragraphs (3)(a) to (c), and the persons responsible for the facility must submit the information required in paragraphs (5)(a) to (e) in its facility report. If these requirements are not met, the person must add the amount of carbon dioxide captured at the facility to Emissions_{net fac}.