ARE YOU READY FOR CARBON COSTS IN 2017?
Carbon costs have arrived in Ontario. In January of 2017, the government of Ontario introduced a carbon cap and trade program designed to fight climate change by incentivizing the reduction of Greenhouse Gas (GHG) emissions.
WHAT SAVINGS OPPORTUNITIES DOES CAP AND TRADE PRESENT?
As of January 1, 2017, natural gas customers have been paying a carbon levy of approximately 3.3 cents/m3 to their gas utility as a result of the cap and trade program.
Facilities that emit more than 10,000 tonnes of CO2 per year (roughly 5 million cubic metres of natural gas) are eligible to “opt in” to the cap and trade market. Voluntary participation can significantly lower carbon costs. For example, a facility that uses about 10 million cubic metres of natural gas per year (emitting 20,000 tonnes annually) would avoid over $1M in carbon costs between 2018 and 2020 by opting in.
If your facility emits less than 10,000 tonnes of CO2 per year, you can still reduce carbon costs by improving efficiencies onsite.
REPORTING AND COMPLIANCE
To stay in compliance in 2017, companies will need to submit a GHG report in June, and apply for free allowances again in September. It’s best to take a long-term approach to creating a compliance strategy, taking into consideration the following factors:
- Program Rules
- Current Requirements
- Quarterly Auction Strategies
- Purchasing of Allowances
- Investigating the Potential to Purchase and Generate Offsets
- Projected Energy Use and Associated Emissions to 2020