GHG emission policies – Canadian companies

Posted on January 13, 2011 by


It is necessary to take an overview of what are the drivers that are likely to have an impact on Canadian companies’ policies with respect to greenhouse gas emissions in the near future.

Regulatory Drivers

USA: EPA imposed Mandatory Reporting of Greenhouse Gases Rule in the country. It mandates the facilities involved in certain types of activities report their annual GHG emissions irrespective to the volume.  Facilities along with their fuel suppliers required to report their emissions at the threshold of 25,000 tCO2/Yr.  It also includes concept of ‘Endangerment finding’. It has mandatory provision to protect U.S. citizens from these gases in the atmosphere.

On 2010, EPA issued its ‘Final GHG Tailoring Rule’, which sets thresholds for GHG emissions from stationary sources under the ‘Clean Air Act permitting programs’. In January 2011, threshold set by the regulations will be in practice. Projects with significant emissions more than75000 tons per year need to use best available control technology.

Canadian companies operating in the US must be aware of EPA regulations. Level of obligation increases time to time therefore it is necessary to learn knowhow of the legislations.

California: The State of California is the participant of Western Climate Initiative (WCI). WCI is the most important sub-national organisation and have greatest number of Canadian participants. California recently introduced cap and trade system to limit GHG emissions in that state. The Greenhouse Gas (GHG) Mandatory Reporting Regulation (Regulation), requires facilities in the California to report their annual GHG emissions in 2009 and ahead.

US Securities Law: The Securities and Exchange Commission (SEC) of United States issued guidance on what publicly traded companies must disclose to investors in terms of material climate risks. The guidance released on Jan 2010 and was not a new regulation but rather an interpretive guidance.

Information to be disclosed includes;

  • Impacts on business of climate change-related international accords and treaties;
  • Physical impacts of changing weather on assets and operations;
  • Opportunities for trading in new carbon markets;
  • Changes in demand for products or services resulting from climate change impacts.

Canadian companies publically trading in the U.S. must comply with these requirements.

 

CANADA

GHG Regulations status in the Canada: Stationary sources emitting more than 50000 tons per year of CO2 require reporting their GHG emission under the GHG Emission Reporting Program in Canada. Canadian federal government presently don’t have carbon policies for Canadian companies. Recently the Canadian government has shown its interest to regulate GHG emissions in a similar fashion as EPA.

Reporting their GHG emissions directly if not reducing them should be the agenda for companies. They must report their impact of the climate change regulations on their business.   Self awareness is necessary for the proper data discloser by the companies. The company must know what its own level of GHG emissions. By knowing their emission data, companies can identify the risks associate with the climate change and provide them solid background to take mitigation actions.

 

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