British Columbia’s carbon credit system

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British Columbia’s carbon credit system

British Columbia’s carbon credit system

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August 22, 2022

Under the Climate Change Accountability Act, SBC 2007, c 42, the province of British Columbia (BC) set certain greenhouse gas (GHG) emissions reduction targets. One initiative for meeting these climate change goals is the carbon credit system governed by the Greenhouse Gas Industrial Reporting and Control Act, SBC 2014, c 29 (GGIRCA). It establishes GHG emissions reporting requirements, allows for the creation of emission standards applicable to industrial facilities, and allows for the adherence to emissions standards through earning or purchasing emissions offsets and/or credits or purchasing government-generated credits.¹

So long as GGIRCA meets or exceeds federal carbon pricing standards as outlined in the Canadian Greenhouse Gas Offset Credit System Regulations, SOR/2022-111 and the Greenhouse Gas Pollution Pricing Act, SC 2018, c 12, BC’s system will likely remain independent from the federally legislated Greenhouse Gas Offset Credit System.²

Three regulations have been created under GGIRCA:

Greenhouse Gas Emission Reporting Regulation, BC Reg 249/2015 (GGERR);³
Greenhouse Gas Emission Control Regulation, BC Reg 250/2015 (GGECR);⁴ and
Greenhouse Gas Emission Administrative Penalties And Appeals Regulation, BC Reg 248/2015 (GGEAPAR).⁵

The GGERR, GGECR, and GGEAPAR together govern the use and issuance of carbon credits in the province. Collectively, they are functionally equivalent to Alberta’s Technology Innovation and Emissions Reduction Regulation, AB Reg 133/2019 (TIER).⁶ Under the GGERR, facilities that emit over 10,000 tonnes or more of GHG per year, measured in Carbon Dioxide Equivalent (CO2e), fall within the scope of the regime and must report its emissions.

GGIRCA defines three types of emissions reduction credits. Offset Units (Offsets) are issued based on verified reductions of emissions from a facility or verified removal of emissions from the atmosphere by a project such as a carbon capture facility. Offset generating projects must meet certain requirements outlined in GGIRCA’s regulations. Earned Credits (Credits) are issued to regulated facilities if they fall under their emission limit for a given compliance period. Finally, Funded Units (Units) can be purchased directly from the government.

Each Offset, Credit, or Unit represents one (1) tonne of CO2e and together, are collectively referred to as Compliance Units (CU). CUs are tradeable certificates that can be purchased or sold on the market. The GGECR also establishes the BC Carbon Registry, which monitors CU transactions, and enables the issuance, transfer, and retirement of CUs.

Finally, the Government of BC issues GGIRCA Bulletins regularly, which provide further legal information, clarifications, and guidance regarding the carbon credit system and its associated regulations.⁷ Any industry stakeholder or interested party should regularly review the Bulletins for any which may affect their project regulated under the regime.

Key takeaway

The emissions reduction targets the province of British Columbia has legislated over the next several decades mean industry stakeholders will face many challenges in meeting their emissions targets. The province’s carbon credit system will be a key mechanism by which those challenges can be met; thus, stakeholders should stay up to date on any changes to it or fluctuations in the price of credits. For further advice and assistance in navigating this system, please contact Hazel Saffery.

Special thanks to summer law student Jack Yuan, who assisted in preparing this insight.