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Canadian Greenhouse Gas Offset Credit System Regulations (SOR/2022-111)

Regulations are current to 2024-05-28

Process for Offset Credit Issuance (continued)

Project Registration (continued)

Marginal note:Aggregation of projects

  •  (1) A proponent may register an aggregation of projects, made up of a group of projects of a type for which a protocol has been included in the Compendium of Federal Offset Protocols and that have not previously been registered under these Regulations or a group of projects that are already registered as part of an aggregation under these Regulations, if the following conditions are met:

    • (a) the proponent is the proponent for each of the projects in the aggregation;

    • (b) all of the projects in the aggregation are situated in the same province;

    • (c) each project in the aggregation meets the conditions of registration set out in subsection 8(1);

    • (d) the same protocol, and version of that protocol, applies to each project in the aggregation;

    • (e) with respect to sequestration projects, if the protocol provides for a choice between the tonne-tonne, hybrid tonne-year or tonne-year quantification method, the same method is used for all projects in the aggregation;

    • (f) an application for registration of the aggregation was submitted in accordance with subsection (2); and

    • (g) the number of projects in the aggregation does not exceed the maximum number of projects for the given project type set out in the protocol.

  • Marginal note:Registration application

    (2) The application for registration of an aggregation of projects must be submitted to the Minister and include the information referred to in Schedule 2.

  • Marginal note:Declaration

    (3) The application for registration must be accompanied by a declaration, dated and signed by the proponent or their authorized official, stating that the information contained in the application is accurate and complete.

  • Marginal note:Addition of a project

    (4) A proponent may add a project, that has not previously been registered under these Regulations, to an aggregation of projects if the conditions set out in paragraphs (1)(a) to (e) and (g) are met and if they submit an application to the Minister, including the declaration referred to in subsection (3), containing the information referred to in subsection (2) for the project, with the information specified in paragraphs 4(c) and (d) of Schedule 2 updated to account for the addition of the new project.

  • Marginal note:Transfer of a project

    (5) A project in an aggregation may only be transferred to another aggregation if the date on which the project’s crediting period began is on or after the date on which the crediting period of the aggregation to which the project is being added began.

  • Marginal note:Withdrawal of a project

    (6) If a project is withdrawn from an aggregation of projects, the proponent must notify the Minister in writing and specify the date the project was withdrawn from the aggregation.

Marginal note:Application deadline

  •  (1) The application for registration must be submitted

    • (a) if the project start date is before the date the applicable protocol is included in the Compendium of Federal Offset Protocols, within 18 months after the date the protocol is included in the Compendium of Federal Offset Protocols and no more than 10 years after the project start date; and

    • (b) if the project start date is on or after the date on which the applicable protocol is included in the Compendium of Federal Offset Protocols, within 18 months after the project start date.

  • Marginal note:Exception — project registered in another system

    (2) Despite paragraph (1)(a), if the project is registered in a GHG offset credit system, other than a system administered by the federal or a provincial government, at the time the applicable protocol is included in the Compendium of Federal Offset Protocols, the application may be submitted more than 18 months after the protocol is included in the Compendium of Federal Offset Protocols but no later than 10 years after the project start date.

Marginal note:Registration by the Minister

 Subject to subsection 6(4), if a proponent meets the conditions set out in section 8 or 9, the Minister must register the project or the aggregation of projects, open the GHG Offset Credit System account in the tracking system, if applicable, and notify the proponent.

Marginal note:Change to boundaries

 The proponent may only modify the coordinates and geographic boundaries of the site where activities are undertaken as part of the project that were provided in the application for registration

  • (a) with respect to a project registered in accordance with section 8, until the end of the period covered by the initial report; and

  • (b) with respect to a project in an aggregation, registered in accordance with section 9, until the end of the first 12 months following the registration of the project as part of an aggregation.

GHG Offset Credit System Account

Marginal note:Maintaining account

  •  (1) A proponent must maintain their GHG Offset Credit System account until the later of

    • (a) at least 100 years after the end date of the last crediting period of all sequestration projects related to that account if the tonne-tonne quantification method was used for any of those projects; and

    • (b) at least eight years after the end date of the last crediting period of all projects related to that account if the tonne-tonne quantification method was not used for any of the projects.

  • Marginal note:Closing of account

    (2) The Minister may, under subsection 186(3) of the Act, close a GHG Offset Credit System account that has been inactive for more than seven years if the Minister notifies the holder of the account of the Minister’s intention to do so and the holder does not request that the account remain open within 60 days after the date the notice was received.

  • Marginal note:Revocation of credits

    (3) If the GHG Offset Credit System account contains offset credits, those credits are revoked prior to the account being closed under subsection (2).

Cancellation

Marginal note:Cancellation

  •  (1) The Minister may cancel the registration of a project if

    • (a) the proponent requests that the registration be cancelled;

    • (b) the proponent fails to comply with paragraph 20(7)(a), (b) or (c), as the case may be;

    • (c) the proponent’s GHG Offset Credit System account has been closed under subsection 13(2);

    • (d) the conditions of registration set out in paragraphs 8(1)(a) to (h), (j) or (l) are no longer met;

    • (e) in the case of a sequestration project, other than a sequestration project for which a tonne-year quantification method is used, the cause of the reversal was within the control of the proponent or there was a failure to implement the reversal risk management plan, as determined in accordance with subsection 40(1);

    • (f) in the case of a sequestration project, other than a sequestration project for which a tonne-year quantification method is used, a reversal diminishes, in accordance with the protocol, the inventory of sequestered CO2e to a level below the inventory in the baseline scenario; or

    • (g) the proponent fails to comply with subsection 181(2) or (3) of the Act.

  • Marginal note:Notice

    (2) The Minister must provide notice of the Minister’s intention to cancel the registration under subsection (1) to the proponent at least 30 days before cancelling that registration, to provide time for the proponent to provide representations.

  • Marginal note:Decision

    (3) The Minister must, after the period set out in subsection (2), confirm or revise his decision and notify the proponent.

Marginal note:Consequences for sequestration project

  •  (1) If the registration of a sequestration project using either the tonne-tonne or the hybrid tonne-year quantification method is cancelled, the Minister may

    • (a) for the purposes of section 180 of the Act, revoke any offset credits in the proponent’s GHG Offset Credit System account for the project and the number of offset credits deposited into the environmental integrity account in respect of the project; and

    • (b) where the number of offset credits revoked from the proponent’s GHG Offset Credit System account for the project under paragraph (a) is less than the number of offset credits issued to the proponent in respect of the project,

      • (i) for the purposes of subsection 181(1) of the Act, require the proponent to remit compliance units by giving them notice indicating the number of compliance units to be remitted and the deadline by which the remittance is to be made, and

      • (ii) if the proponent does not remit compliance units in accordance with subparagraph (i) or make a payment in lieu of remitting compliance units under subsection 181(3) of the Act, revoke, for the purposes of section 180 of the Act, offset credits in the environmental integrity account to make up the difference.

  • Marginal note:Manner of remittance

    (2) Subject to subsection (3), the compliance units remitted to the Minister for the purposes of subparagraph (1)(b)(i), in accordance with subsection 181(2) of the Act, must

    • (a) in the case of offset credits or units or credits recognized as compliance units under a regulation made under the Act, have been issued for GHG reductions that occurred within eight calendar years before the deadline indicated in the notice provided under that subparagraph; and

    • (b) in the case of surplus credits, have been issued within five calendar years before the deadline indicated in the notice provided under that subparagraph.

  • Marginal note:Surplus credits

    (3) If a proponent is required to remit compliance units, the proponent may remit surplus credits if those surplus credits were issued to a covered facility located in a province listed in Part 2 of Schedule 1 to the Act during the calendar year in which the Minister notified the proponent under subparagraph (1)(b)(i) of the number of compliance units to be remitted.

Renewal of Crediting Period

Marginal note:Manner of renewal

  •  (1) A proponent may request that the Minister renew the crediting period in respect of a project or an aggregation of projects by submitting an application to renew at least nine months but no more than 18 months before the end of the crediting period.

  • Marginal note:Information to submit

    (2) The application must include the information referred to in paragraphs 2(d), (f) to (k) and (n) to (s) of Schedule 1 or paragraphs 3(e) to (j) and (m) to (r) and 4(a) of Schedule 2, as the case may be, and any other change to the information referred to in those Schedules since the registration application or the last renewal request, including a description of any measures and monitoring activities implemented following changes to the reversal risk management plan.

  • Marginal note:Conditions of renewal

    (3) Subject to subsection 6(4), the Minister must renew the crediting period if the conditions of registration set out in section 8 or 9 are met at the time of the renewal. The Minister must notify the proponent of his decision, including his reasons for that decision, in that regard at least three months before the end of the crediting period.

  • Marginal note:Most recent version of protocol

    (4) The most recent version of the protocol applies to the renewal for the purposes of subsections (2) and (3).

  • Marginal note:Beginning of new crediting period

    (5) The new crediting period begins on the day after the day on which the most recent crediting period ended.

  • Marginal note:Limit on renewals

    (6) The crediting period can be renewed for

    • (a) in the case of a sequestration project related to forestry, a total of no more than 100 years including all renewals; and

    • (b) in the case of all other projects, no more than two times.

General Requirements

Marginal note:Information management system

 A proponent must implement a data and information management system to collect, manage and store data and information related to their project in a way that ensures the integrity, completeness, accuracy and validity of the data and information.

Marginal note:Measuring devices

 A proponent must ensure that any measuring device used to determine a quantity that is related to the preparation of a project report is

  • (a) installed, operated, maintained and calibrated in accordance with the manufacturer’s specifications or the applicable protocol; and

  • (b) maintained to be accurate within ± 5%.

Marginal note:Quantification

  •  (1) A proponent must quantify the GHGs emitted and the GHGs removed from the atmosphere for the sources, sinks and reservoirs that must be taken into account for the baseline scenario and the project scenario, in accordance with the applicable protocol. For the purposes of the quantification, the applicable global warming potentials set out in Schedule 3 to the Act and the applicable emission factors and reference values set out in the document Emission Factors and Reference Values, published in 2022 by the Department of the Environment, are to be used.

  • Marginal note:Exclusion

    (2) Despite subsection (1), GHGs emitted or removed from the atmosphere are not included in the quantification if the GHGs were from sources, sinks and reservoirs that were subject to provincial or federal pricing mechanisms or the emissions or removals from sources, sinks and reservoirs that were required by law or the result of a legal requirement unless, with respect to a source, the quantity of GHGs emitted increased due to the project.

Project Report

Marginal note:Content — sequestration project

  •  (1) Subject to subsection (3) and (5), a project report submitted by a proponent for a sequestration project must include, the information listed in Schedule 3 as well as the GHG reductions generated by the project — the quantity of tonnes of GHGs that the project prevented from being emitted or that it removed from the atmosphere — expressed in CO2e tonnes, for each calendar year covered by the report, determined by the following formula:

    (Ai − Bi) Ci

    where

    Ai
    is the aggregate of all of the GHGs emitted and the GHGs removed from the atmosphere from the sources, sinks and reservoirs included in the project scenario, quantified in accordance with the protocol, for the calendar year “i”, as set out in the report under paragraph 2(i) of Schedule 3,
    Bi
    is the aggregate of all of the GHGs emitted and the GHGs removed from the atmosphere from the sources, sinks and reservoirs included in the baseline scenario, quantified in accordance with the protocol, for the calendar year “i”, as set out in the report under paragraph 2(h) of Schedule 3,
    Ci
    is the value that corresponds to the leakage discount factor, as set out in the report under paragraph 2(g) of Schedule 3, if the protocol requires that the value be applied to the difference between the amount determined for A and the amount determined for B for calendar year “i”, and
    i
    is the ith calendar year, where “i” goes from 1 to n and where n is the number of calendar years covered by the report.
  • Marginal note:Content — Non-sequestration project

    (2) Subject to subsection (3), the project report submitted, for a project other than a sequestration project, by the proponent for the period covered by the report must include the information listed in Schedule 3 and the GHG reductions generated by the project, expressed in CO2e tonnes, for each calendar year covered by the report, determined by the following formula

    (Bi − Ai) Ci

    where

    Bi
    is the aggregate of all of the GHGs emitted and the GHGs removed from the atmosphere from the sources, sinks and reservoirs included in the protocol for the baseline scenario, quantified in accordance with the protocol, for calendar year “i”, as set out in the report pursuant paragraph 2(h) of Schedule 3,
    Ai
    is the aggregate of all of the GHG emitted and the GHGs removed from the atmosphere from the sources, sinks and reservoirs included in the protocol for the project scenario, quantified in accordance with the protocol, for calendar year “i”, as set out in the report pursuant paragraph 2(i) of Schedule 3,
    Ci
    is the value that corresponds to the leakage discount factor, as set out in the report pursuant to paragraph 2(g) of Schedule 3, if the protocol requires that the value be applied to the difference between variable A and variable B for calendar year “i”, and
    i
    is the ith calendar year, where “i” goes from 1 to n and where n is the number of calendar years covered by the report.
  • Marginal note:Aggregation of projects

    (3) With respect to an aggregation of projects, a project report submitted by a proponent must include, the information listed in Schedule 4 and the following information:

    • (a) subject to subsection (5), for an aggregation of sequestration projects, the GHG reductions generated by each project within the aggregation expressed in CO2e tonnes, for each calendar year covered by the report, determined by the following formula:

      (Ai − Bi) Ci

      where

      Ai
      is the aggregate of all of the GHGs emitted and the GHGs removed from the atmosphere from the sources, sinks and reservoirs included in the protocol for the project scenario, quantified in accordance with the protocol, for calendar year “i”, as set out in the report under paragraph 3(g) of Schedule 4,
      Bi
      is the aggregate of all of the GHGs emitted and the GHGs removed from the atmosphere from the sources, sinks and reservoirs included in the protocol for the baseline scenario, quantified in accordance with the protocol, for calendar year “i”, as set out in the report under paragraph 3(f) of Schedule 4,
      Ci
      is the value that corresponds to the leakage discount factor, as set out in the report under to paragraph 3(e) of Schedule 4, if the protocol requires that the value be applied to the difference between A and B for calendar year “i”, and
      i
      is the ith calendar year, where “i” goes from 1 to n and where n is the number of calendar years covered by the report; and
    • (b) for an aggregation of projects, other than an aggregation of sequestration projects, the GHG reductions generated by each project within the aggregation — the quantity of tonnes of GHG prevented from being emitted or removed from the atmosphere — expressed in CO2e tonnes, for each calendar year covered by the report, determined by the following formula

      (Bi − Ai) Ci

      where

      Bi
      is the aggregate of all of the GHGs emitted and the GHGs removed from the atmosphere from the sources, sinks and reservoirs included in the protocol for the baseline scenario, quantified in accordance with the protocol, for calendar year “i”, as set out in the report under paragraph 3(f) of Schedule 4,
      Ai
      is the aggregate of all of the GHGs emitted and the GHGs removed from the atmosphere from the sources, sinks and reservoirs included in the protocol for the project scenario, quantified in accordance with the protocol, for calendar year “i”, as set out in the report under paragraph 3(g) of Schedule 4,
      Ci
      is the value that corresponds to the leakage discount factor, as set out in the report under paragraph 3(e) of Schedule 4, if the protocol requires that the value be applied to the difference between variable A and B for calendar year “i”, and
      i
      is the ith calendar year, where “i” goes from 1 to n and where n is the number of calendar years covered by the report; and
    • (c) with respect to the aggregation of projects, the sum of the reductions specified in paragraph (a) or (b) for all of the projects in the aggregation by calendar year, as the case may be.

  • Marginal note:Emissions preceding registration

    (4) For the purposes of subsections (1) to (3), if a project’s start date is before the day it is registered under these Regulations, the GHGs emitted from any source included in the applicable protocol for the project scenario, during the period beginning on the project start date and ending on the day before the day the project is registered, must be included, in accordance with the protocol, in the quantity determined for A.

  • Marginal note:Net increase in emissions

    (5) If in the initial project report submitted by the proponent for a sequestration project or an aggregation of sequestration projects, the difference between the quantity determined for A and the quantity determined for B in subsection (1) or paragraph (3)(a) indicates a net increase in GHG emissions that is not caused by a reversal, that increase must be carried forward to the next period covered by a project report in order to be subtracted in accordance with subsection 29(2), from the total reported quantity of GHG reductions generated by the project for the first calendar year covered by the report, and, if the result of the subtraction indicates a net increase in GHG emissions, the same for the subsequent calendar years covered by the report.

  • Marginal note:Declaration

    (6) The project report must be accompanied by a declaration, dated and signed by the proponent or their authorized official, stating that the information contained in the report is accurate and complete.

  • Marginal note:Report submission

    (7) The project reports, accompanied by verification reports, that must be submitted by the proponent are the following:

    • (a) an initial report with respect to the 12 months following the start of the first crediting period, within 6 months after those 12 months;

    • (b) subsequent reports within 6 months following

      • (i) for sequestration projects, a maximum of 6 years after the end the period covered in the last project report, and

      • (ii) for all other projects, no later than 3 years after the day on which the period covered by the last project report ended; and

    • (c) a final report, within 6 months of the end of the last crediting period.

  • Marginal note:Extension of submission deadline

    (8) Despite paragraphs 7(f) and (7)(b), if a reversal occurs within 18 months of the deadline by which a project report must be submitted, the deadline is extended by 6 months after the date the reversal report is submitted.

  • Marginal note:Choice with respect to verification

    (9) Despite subsection (7) and paragraphs 7(e) and (f), a proponent of a project other than a sequestration project may choose not to have a project report, other than an initial project report, verified if they opt not to have offset credits issued to them for the reporting period covered by the report.

  • Marginal note:No discontinuity

    (10) There can be no discontinuity between the periods covered by the project reports submitted by the proponent.

  • Marginal note:Correction of errors or omissions

    (11) If a verifier identifies errors or omissions in a project report during their verification, the proponent must correct those errors or omissions, if possible, and identify those corrections in the project report.

 

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