Ontario finalizes cap and trade program, releases action plan

By Anna Simet | June 10, 2016

Three weeks after Ontario finalized its cap and trade program, which takes effect July 1, the provincial government released the full version of its new Climate Change Action Plan.

The cap and trade program, which the government says it has modeled similar to California and Quebec’s cap and trade programs, applies to facilities that generate more than 25,000 metric tons of greenhouse gas emissions each year, or “capped emitters.” Other specified types of capped emitters include natural gas distributors, fuel suppliers and electricity importers.

Though the regulatory proposal did not state any exemptions for use of biomass, a May 19 Ontario Environmental Registry entry states that a factor will be added to the allowance allocation formula that will lower the cap adjustment factor in proportion to a facility’s biomass use. It states that biomass will continue to be treated as carbon neutral, but the current quantification, verification and reporting regulation and guideline do not include the changes proposed on measurement requirements and reporting of biomass, and that the ministry will continue discussions with partner jurisdictions and stakeholders on this subject.

The program rules include a detailed definition of biomass, including organic matter that is available on a renewable basis; derived from a plant, animal or micro-organism or must be a product made of such organic matter; grown or harvested for the purpose of being used to generate electricity, heat or other useful energy; waste from harvesting or processing agricultural products or waste from processing forestry products, including spent pulping liquor, agricultural waste, greenhouse waste, pulp and paper biosolids, waste from food processing, sewage biosolids, hauled sewage, waste from food and beverage processing, wood waste, landfill gas, biodiesel, biofuel, or biogas, among others.

The cap and trade program is one component of Ontario’s newly released Climate Change Action Plan, a five-year program focused on reducing greenhouse gas pollution and transitioning to a low-carbon economy. It includes a broad spectrum of focus areas, including, but not limited to, establishing a green bank to help homeowners and businesses access and finance energy-efficient technologies; creating a cleaner transportation system by increasing availability of zero-emission vehicles on the road, deploying cleaner trucks and making transit more available; making new buildings increasingly energy efficient over time; making it easier for homeowners and businesses to install or retrofit clean-energy systems like solar, battery storage, advanced insulation and heat pumps; using cap and trade proceeds to make investments that reduce greenhouse gas pollution, such as the deployment of renewable natural gas, LINK, and in partnership with First Nations and Métis communities to address climate change, with actions guided by Traditional Ecological Knowledge, and helping to build capacity in these communities to participate in the economic opportunities that may arise from the actions. 

Biomass is specifically addressed in regard to collaboration with Indigenous communities, provided as an example of the kinds of projects the province will work with them to develop, projects that could be connected to the provincial grid.