Recent Developments in emissions trading and climate change

August 5, 2009
  • Canada Sets Deadline for Emissions Reporting
  • VCS Streamlines Offset Approval for Canadian Projects
  • British Columbia's Carbon Trust Delivers First Offsets
Canada sets deadline for emissions reporting


Canadian industrial emitters of greenhouse gases (GHGs) have until June 1, 2010 to report their 2009 GHG emissions. Data collected will be used to create a domestic GHG inventory, harmonizing emissions reporting across Canadian jurisdictions. The reporting deadline, which was established by Environment Canada, applies to facilities that emit over 50,000 tonnes of CO2 equivalent per year, replacing the 100,000 tonne threshold that has been in effect since the introduction of the Greenhouse Gas Emissions Reporting Program in 2004.

The reporting deadline is an element of the federal government's efforts to develop regulations aimed at combating GHGs. Environment Minister Jim Prentice has indicated that regulations will be unveiled prior to December's climate change talks in Copenhagen. As reported in our June 2009 Energy Law Update, the government has published guidelines for a domestic offset program that will form part of Canada's proposed cap-and-trade system, but has yet to develop sector-specific regulations for regulated entities.

Reporting facilities must keep copies of the required information, along with calculations, measurements and other underlying data, in Canada for a three-year period from the required date of submission. Reporting requirements are detailed in the Canada Gazette Notice for 2009 Emissions.

VCS streamlines offset approval for Canadian projects

On July 23, 2009, the Voluntary Carbon Standard (VCS) Association announced that it will no longer require projects located in Canada to demonstrate that Voluntary Carbon Units (VCUs) issued to the project would cancel out a corresponding number of compliance units under the Kyoto Protocol, known as Assigned Amount Units (AAUs). This requirement eliminates the risk of double counting that occurs when a project in a particular country sells emission reductions and thus "frees up" AAUs that the government can then sell.

"The VCS Board concluded that this requirement is not applicable to Canada because there is no regulatory framework to implement the Kyoto Protocol, none is likely to emerge, and the country is unlikely to achieve its Kyoto Protocol reduction commitment," the VCS reported.

To date, Canadian projects have not been able to generate VCUs. The action is expected to enhance access to global carbon finance markets and provide incentives for the development of, and investment in, GHG reduction and removal projects in Canada.

The VCS is an internationally recognized standard for voluntary carbon offsets, providing a framework with additionality and baseline-setting requirements, as well as a registry system for buyers and sellers to track VCUs.

British Columbia's Carbon Trust delivers first offsets

The Pacific Carbon Trust has delivered its first 34,370 tonnes of emissions offsets to the provincial government through investments in new energy technologies.
The Trust, a Crown corporation established in 2008 as part of the province's Climate Action Plan, purchases carbon offsets on behalf of public-sector organizations and other clients, including businesses and individuals. Under the Plan, all public-sector organizations are required to achieve carbon neutrality by 2010.

Offsets purchased by the Trust must be generated through B.C.-based activities that demonstrate real GHG emission reductions or removals that would not have occurred without the revenue from the purchases, and reductions must be verified by an objective third party.

The Trust has a goal of acquiring over 700,000 tonnes of offsets annually by 2011. To date, it has agreed to acquire offsets from fifteen facilities, including greenhouses, a cement plant and a developer of hybrid heating systems.

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