Today, the Government of Canada launched Canada’s Greenhouse Gas Offset Credit System, a key measure outlined in Canada’s 2030 Emissions Reduction Plan. The offset system will give municipalities, foresters, farmers, Indigenous communities, and others a market-based incentive to undertake innovative projects that reduce greenhouse gases (GHGs) by preventing emissions and removing GHGs from the atmosphere.

Under the new system, registered participants can carry out projects following a federal offset protocol, which sets out a consistent approach for measuring GHG emissions reductions or removals for specific types of projects. These projects can generate one tradeable offset credit for every tonne of emissions they reduce or remove from the atmosphere. Once a credit is earned, it can be sold to others to help them meet their compliance obligations or emissions reduction goals under the carbon pollution pricing system.

Steven Guilbeault, Minister of Environment and Climate Change, announced the first in a developing series of federal offset protocols. Under the new Landfill Methane Recovery and Destruction protocol, municipalities and other landfill operators will be able to generate offset credits for recovering landfill gas from their operations and destroying it or repurposing it into energy with technologies such as flares, boilers, turbines, and engines. Reducing GHGs from waste (responsible for seven per cent of Canada’s GHGs) is a key component to achieving Canada’s emissions reduction targets.

“Establishing a federal carbon offset market is a win-win for the economy and the environment. Starting with landfills, we’re putting in place a market-based mechanism to incentivize businesses and municipalities to invest in the technologies and innovations that cut pollution,” said Guilbeault. “Over the coming year, we will roll out more offset protocols for activities in other sectors, such as forestry and agriculture.”

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The four additional offset protocols are currently in development for activities such as advanced refrigeration, agriculture, and forest management. Environment and Climate Change Canada has also identified the next round of protocols for development, which will include a protocol for Direct Air Carbon Capture and Sequestration, technologies that directly remove carbon dioxide from the atmosphere and permanently store it underground.

Canada’s Greenhouse Gas Offset Credit System is aligned with the Pan-Canadian Greenhouse Gas Offsets Framework and incorporates expertise from across the country. Provinces including Alberta, British Columbia and Quebec have already demonstrated leadership in this area by launching provincial offset credit programs, and by sharing their experiences to help support the design of the federal system. The availability of offset credits is expected to help stimulate innovation and private sector investment in economic activities to reduce emissions, thus keeping Canada competitive in a decarbonizing economy.

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Carole Saab, CEO of Federation of Canadian Municipalities. Credit: FCM.

“FCM welcomes the federal government’s recent recognition that municipalities are critical to achieving Canada’s 2030 emission goals. With the right tools, local governments can play a crucial role in this effort, and the federal Greenhouse Gas Offset Credit System is one useful addition to the municipal toolbox,” said Carole Saab, CEO of the Federation of Canadian Municipalities.

“Today’s announcement represents important support for those municipalities, local businesses and industries looking to invest more in reducing emissions and building sustainable infrastructure in communities across the country.”

Federal offset credits can be used by facilities regulated under the federal Output-Based Pricing System (OBPS) to compensate for emissions that exceed their limit. In this way, an offset credit is a substitute for direct emissions reduction, and helps reduce compliance costs and maintain business competitiveness. Federal offset credits can also be used by individuals or organizations for other purposes, including corporate net-zero commitments and GHG emissions reduction goals.

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Olivier Joyal, executive vice-president of execution and strategy for Earth and Environment at WSP Global Inc., a leading environmental consulting firm, issued the following statement:

“Creating a system for offsetting greenhouse gas emissions is a strong step forward for helping Canadian landfill operators such as municipalities and project promoters in reducing their carbon footprint. Our team at WSP Golder has been working with the landfill gas management sector for more than 30 years, across Canada, and we welcome this opportunity to continue to help and guide these major players meet their ESG targets.”

For further information on Canada’s Greenhouse Gas Offset Credit System, eligible activities, and how to submit an application to register an offset project, visit Canada.ca.

The Government of Canada is also taking steps to enable Indigenous Peoples to participate in Canada’s Greenhouse Gas Offset Credit System. A discussion paper on how best to facilitate Indigenous participation in the Offset System is open for comment until June 30, 2022.

Featured image credit: Nong Vang/Unsplash.

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