—Canada's government has outlined its plan for a carbon offset trading system aimed at helping achieve the national goal of net-zero emissions by 2050.
Environment and Climate Change Canada will develop a framework for the exchange of greenhouse gas emissions credits between large polluters and organizations that reduce or remove their output, according to a notice published in the Canada Gazette, the government's official publication.The offset rules would be part of the 2018 Greenhouse Gas Pollution Pricing Act, which enabled a sweeping tax on emissions on everything from industrial pollution to home-heating fuel.
"The potential to generate federal offset credits could incentivize activities leading to reductions in GHG emissions or increases in GHG removals from the atmosphere by carbon sinks ... that are not required under existing regulations or covered by other measures related to carbon pollution pricing," the government said in its notice.
In addition to identifying projects that would be eligible for the credits, the government plans to develop the regulatory framework for the program and the trading system itself.
The government said it has identified four project types that would initially qualify for the credits, including the reduction or avoidance of the use of fluorinated refrigerants like hydrofluorocarbons and the reduction of methane emissions from landfills.
The forest and agriculture sectors would be able to modify management practices to generate credits.
The credits would be generated and issued in 1 mt units, implying a value of C$40/mt in 2021 at the federal emissions tax rate.
To qualify for the credits, emission-reduction project proponents would have to issue a statement of qualifying reductions verified by an accredited third party.
The government would also establish an "environmental integrity account" comprising a percentage of all credits issued that would act as a form of insurance if credits are disqualified.
In order to be part of the system projects must achieve "real, additional, quantified, verified, unique and permanent GHG reductions," according to the notification.
