An Energy, Environmental & Regulatory Law Update
Alberta has recently released its new scheme for emissions trading with the filing of the Emissions Trading Regulation under the Environmental Protection and Enhancement Act. This Regulation was developed in conjunction with the Clean Air Strategic Alliance (CASA) and input from multi-stakeholder groups over a number of years. It currently addresses the emissions of nitrogen oxides and sulphur dioxide but not carbon dioxide.
The Regulation establishes an Emissions Trading Registry and provides that a unit operator of a generating unit with a maximum continuous rating of 25 megawatts or more who holds a current approval must establish an emission trading account with the registry before January 1, 2007. The Regulation also establishes baseline emission rates for both nitrogen oxides and sulphur dioxides as the average emissions of these substances in kg/Mwh in the earliest three years of normal operation after January 1, 2000. For units with no significant shutdowns, the baseline rate would be the average emissions from January 1, 2000 to December 31, 2002. Unit operators with ratings of 25 megawatts or more must apply to the Director for a baseline emission rate no later then August 1, 2006. If a generating unit emits fewer kilograms of nitrogen oxides and sulphur dioxide in a year than its baseline emission rate, a unit operator becomes eligible for emission credits. These can be applied against compliance requirements within the following two years or can be transferred to other unit operators. Emission credits are also available for early decommissioning, decommissioning at end of design life, retrofitting and cogeneration units. The Minister does retain the discretion to cancel any emission credit if it is in the public interest and necessary to prevent releases of substances from causing significant adverse effects. Failure to comply with this new regulation carries a maximum fine of $50,000 for individuals and $500,000 for corporations. Alberta Environment will soon be releasing the final version of the companion guide to this regulation entitled "An A to Z Guide to Emissions Trading."
This update is a general review of the subject matter, and cannot be regarded as legal advice. Please contact Ron Kruhlak in Edmonton at rkruhlak@mross.com, Gavin Fitch in Calgary at gfitch@mross.com, or any member of our Energy, Environmental & Regulatory Practice Group for further information on this or any other energy, environmental or regulatory matter.
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