Yesterday, the Government of Canada provided further details on its regulatory framework on greenhouse gas emissions announced last April (see Flash: Canadian Federal Government Announces New Greenhouse Gas Reduction Targets).  In particular, draft regulations will no longer be released this spring but will be delayed until the fall of 2008. Such regulations will take effect on January 1, 2010.

The development of intensity-based targets will proceed as follows:

• Facility-specific targets (18 percent in 2010 from each site's 2006 emission intensity) will be applied in the iron ore pelletizing, potash, base metal smelting, chemicals, fertilizers, iron and steel, ileminite (titanium), oil sands, petroleum refining, natural gas pipelines and upstream oil and gas sectors
• Corporate-specific targets (18 percent in 2010 from the average 2006 emission intensity of the company's fleet of facilities) will be used in the electricity sector
• Sector-wide targets (18 percent in 2010 from the sector's average 2006 emission intensity) will apply to lime, pulp and paper, aluminum and alumina and cement sectors
• Cleaner fuel standards will be used to determine targets for new facilities in the potash, natural gas pipeline, upstream oil and gas, oil sands and electricity sectors
• Targets for new upgrader and in-situ facilities in the oil sands sector and coal-fired electricity-generating facilities will be developed based on carbon capture and storage technology

Facilities with emissions below the minimum thresholds will not be subject to greenhouse gas emission reduction requirements: chemical (50kt CO2e); nitrogen-based fertilizer (50kt CO2e); natural gas pipeline (50kt CO2e); upstream oil and gas (3 kt/facility and 10,000 barrels of oil equivalent/day/company); electricity (10 MW).

Companies seeking credit for early action taken between 1992 and 2006 have been asked to comment on the proposed allocation process by May 14, 2008 and make initial submissions regarding eligible reductions by June 27, 2008. 

Finally, with respect to the proposed offset system, guidelines for proponents of reduction projects will be issued in spring and summer, 2008.

The foregoing is a summary of a recent development in environmental law.  If you would like additional information about this or any other environmental law topic, please contact Sarah Powell, Alexandria Pike and Katie Goldberg Zwick in the Toronto office at (416) 863-0900 or Michel Pelletier and Marc-André Boutin in the Montréal office at (514) 841-6400.

Davies Ward Phillips & Vineberg LLP, with over 235 lawyers, practises nationally and internationally from offices in Toronto, Montréal, New York and an affiliate in Paris and is consistently at the heart of the largest and most complex commercial and financial matters on behalf of its North American and overseas clients.

The information and comments herein are for the general information of the reader and are not intended as advice or opinions to be relied upon in relation to any particular circumstance.  For particular applications of the law to specific situations, the reader should seek professional advice.
 
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March 11, 2008