Manitoba is pushing ahead with its plan for a $25 per tonne price on carbon emissions from emitters of 50,000 tonnes or more of greenhouse gases (GHG) annually as outlined in its Made-in-Manitoba Climate and Green Plan. The plan was announced in October 2017 and led to peace between Manitoba and the federal government on issues of carbon pricing, at least through 2019.
In a July 30, 2018 “Discussion Paper: Draft Regulatory Framework for a Made-in-Manitoba Output-based Pricing System”, Manitoba has outlined options for the output-based pricing system for large emitters that is part of the plan. The comment period on the discussion paper closes September 30, 2018.
According to Climate Change Connection, a Manitoba-based ENGO, nine facilities in Manitoba emit 50,000 tonnes or more of GHG equivalent. However, three of them are landfills, which Manitoba is exempting.
For the six remaining large emitters, the following issues remain unsettled:
Benchmarking determines the threshold above which a facility’s emissions intensity (emissions per unit of production) will attract the carbon price. There are three options: facility-specific standards based on the facility’s historical GHG performance; sector-level standards, where an emissions-intensity benchmark is set at a designated percentage below the average intensity of similar facilities in the same sector (e.g., 80% of the industry average); best-in-class standards, where the benchmark is determined by the best-performing facility within a sector globally, nationally, regionally, or provincially.
Emissions-intensity benchmarks will decline over time in order to encourage continuous improvement. But how steep should that decline be? The discussion paper proposes tightening each emissions-intensity benchmark by two percent annually. That percentage decline would apply to all emissions included in the emissions-intensity benchmark except for industrial process emissions, as these emissions are usually more difficult to reduce.
These have not been determined as benchmarks will not be in place before June 2019.
Offsets will be a compliance option. Manitoba may establish an offsets registry for offsets generated in the province. Protocols will align with other Canadian jurisdictions, and Manitoba will prioritize offsets in the areas of agriculture, waste, and land use change and forestry. Offsets from jurisdictions other than Manitoba may be considered for compliance.
Facilities in emissions-intensive, trade-exposed sectors that emit between 10,000 tonnes and 50,000 tonnes of GHG equivalent annually may apply to opt into the program beginning January 1, 2020. Until then, those facilities will be required to pay the carbon tax on their fuel purchases.