Output-Based Pricing System Regulations

Marginal note:Compliance unit

• 78 (1) A unit or credit is to be recognized as a compliance unit if it is issued

  • (a) by a province or territory or by a program authority on behalf of a province or territory; and

  • (b) under an offset protocol and offset program that is set out on the list published on the Department of the Environment’s website.

• Marginal note:Offset programs

  (2) In establishing the list of offset programs, the Minister must ensure that each one includes the following elements:

  • (a) rules regarding governance, oversight and enforcement;

  • (b) rules regarding registration and renewal of projects;

  • (c) rules regarding the establishment of periods within which units or credits may be issued;

  • (d) rules regarding who is entitled to the credit or unit for the GHG reductions or removals;

  • (e) measures to ensure that GHG reductions and removals are additional and permanent and that reversal risks have been mitigated;

  • (f) measures to ensure that, for a GHG reduction or removal of one CO₂e tonne, no more than one credit or unit is issued and the unit or credit is not used more than once;

  • (g) publicly available information on projects, protocols and units or credits; and

  • (h) a requirement that, prior to the issuance of a unit or credit, there be a verification by a third party in accordance with procedures that allow them to determine with a reasonable level of assurance that the associated project meets the requirements of the protocol and program.

• Marginal note:Offset protocols

  (3) In establishing the list of offset protocols recognized under a program referred to in subsection (2), the Minister must verify that each protocol ensures that

  • (a) the reduction or removal is with respect to a GHG;

  • (b) the reduction or removal is not subject to carbon pollution pricing;

  • (c) the GHG reduction or removal is quantified using scientifically-established methods that allow for

    • (i) the calculation of the quantity of GHG emissions or removals for each GHG source, sink and reservoir,

    • (ii) the quantification of reversals,

    • (ii.1) the assessment of leakage risks,

    • (iii) the calculation of the quantity of GHG reductions or removals that would not have occurred in comparison with the baseline scenario, and

    • (iv) the use of conservative quantification assumptions and approaches;

  • (c.1) the baseline scenario used reflects the most recent data available, any legal requirements and current practices with respect to the activity that is the subject of the protocol;

  • (d) best practices are used for

    • (i) data gathering and management,

    • (ii) record keeping,

    • (iii) the ongoing monitoring of offset projects, including permanence, and

    • (iv) quality assurance and quality control; and

  • (e) the GHG global warming potentials used in calculations are less than or equal to those set out in column 2 of Schedule 3 to the Act.

• Marginal note:Recognized unit or credit

  (4) A recognized unit or credit must, at the time of its remittance to the Minister,

  • (a) be valid;

  • (b) have been issued in respect of a project that uses a protocol referred to in subsection (3);

  • (c) have been issued in respect of a project located in Canada that began in 2017 or later; and

  • (d) have been verified by a verification body that

    • (i) is accredited as a verification body to the ISO Standard 14065 by the Standards Council of Canada, the American National Standards Institute or any other accreditation organization that is a member of the International Accreditation Forum, and

    • (ii) is not suspended by the accreditation organization that issued its accreditation.