Canada: Environment Ministry To Loosen Law For Waste-Based "Alternative Fuels" That Displace Coal

Last Updated: April 29 2014
Article by Dianne Saxe

Kudos to the Ontario Ministry of the Environment for finally coming to grips, at least a little, with the adverse environmental and environmental effects of labelling too many productive activities as "waste disposal". The ministry's proposed regulatory changes will remove the "waste disposal" label from energy-intensive and trade-exposed heavy industry (such as the cement, lime, iron and steel sectors) to switch from coal or coke to waste-based "alternative low carbon fuels". Alternative low-carbon fuels must not be recyclable, must replace coal or petroleum coke and must result in a reduction of greenhouse gas emissions. Regular air permits will still be required.

Regulatory Proposal: Reducing Coal Use in Energy Intensive Industries
EBR Registry Number: 012-1559
Comments due: June 1, 2014
The ministry is proposing regulatory changes to help Ontario's energy-intensive and and trade-exposed manufacturing industries (such as the cement, lime, iron and steel sectors) take advantage of opportunities to reduce the use of coal and petroleum coke. Now that coal has been phased out of electricity generation, these industries are the largest users of coal in the province and account for approximately 11% of industrial greenhouse gas emissions.

Alternative low-carbon fuels

One method used by these industries to reduce greenhouse gas emissions is by switching to alternative low-carbon fuels such as biomass (e.g., corn stover) or non-recyclable residual waste that would otherwise be disposed of as waste in landfills (e.g., certain non-hazardous residual waste that remains after recyclables are separated out).
Currently, the energy-intensive and trade-exposed industries that want to use these alternative low-carbon fuels are regulated under Ontario legislation as waste disposal sites, in addition to requirements they must meet to protect air and water quality – even though they are not in the waste management business. Ontario has an opportunity to reduce greenhouse gas emissions by helping large energy-intensive and trade-exposed industries take advantage of opportunities to use alternative low-carbon fuels for energy in their manufacturing processes and maintain their competitiveness with other jurisdictions where regulatory frameworks are in place for alternate fuels. To help achieve this, the Ministry of the Environment is proposing a new environmental approvals process for the use of alternative low-carbon fuels. The new process would better enable the use of alternative low-carbon fuels by these energy-intensive sectors and allow them to reduce GHGs. The new process would also set standards to ensure transparency and maintain environmental protection.

Under the proposed framework, alternative low-carbon fuels may include certain types of biomass and the residual wastes after recyclables have been separated. Alternative low-carbon fuels will not include any other material that can or may be recycled, and could only be used if they replaced coal or petroleum coke and resulted in a reduction of greenhouse gas emissions. Materials would also need to meet other criteria, such as minimum fuel values and maximum contaminant concentrations. Facilities wanting to include the use of alternative low-carbon fuels in their operations would still need to meet Ontario's stringent standards for air emissions and wastewater discharges; however, they would have more flexibility to assess different fuels at their operations before applying for approval to use them on a long-term basis.

Since facilities wanting to use alternative low-carbon fuels would no longer be classified as "waste disposal sites," Environmental Assessment Act (EAA) requirements would no longer apply and an Environmental Compliance Approval (ECA) for a waste disposal site would not need to be obtained, ECA requirements to protect air or water would still be required. The proposed regulation under the Environmental Protection Act (EPA) would set out requirements for facilities proposing to use alternative low-carbon fuels to reduce their GHG footprint. These new requirements would maintain the current level of environmental protection by requiring environmental impact studies, adherence to environmental standards and ensure continued transparency through public consultation requirements.

Regular air approvals still required

As noted, facilities would still need to obtain and comply with ECAs for air and wastewater, and transportation of the fuels would still require an ECA or a registration in the Environmental Activity and Sector Registry (EASR). Proponents would need to demonstrate that the new regulation's requirements had been met before an ECA application would be considered by the ministry. As with approvals for other projects not subject to the EAA, these ECAs would now also be subject to the public notification requirements and third-party appeal provisions of the Environmental Bill of Rights.

Definition of alternative low-carbon fuel

The proposed regulatory framework would define 'alternative fuel' to include non-recyclable, non-hazardous materials for use by energy-intensive and trade-exposed industries that result in lower greenhouse gas emissions and comply with other environmental standards.

The proposed framework would require alternative low-carbon fuels to be composed of or derived from materials such as:

  • non-recyclable and non-hazardous residual wastes;
  • non-recyclable industrial, commercial or institutional residues/waste such as unsaleable finished goods;
  • non-recyclable wastes generated by construction and demolition activities; and/or
  • biomass, such as agricultural by-products or residues.

To ensure environmental protection, the proposed framework would also require an alternative low-carbon fuel to reduce greenhouse gas emissions and meet other standards such as maximum concentrations of specified contaminants such as mercury.

The proposed framework would only allow alternative low-carbon fuel to be used at a facility to replace coal or petroleum coke for the purposes of manufacturing a physical product – as opposed to electricity generation or waste disposal.

New environmental approval process

Removal of requirement for 'waste disposal site' ECA

The use of alternative low-carbon fuels derived from non-recyclable materials by energy intensive industries such as cement, lime, and iron and steel to reduce GHG emissions does not constitute 'waste disposal.' Therefore, the province wants to clarify that these facilities using alternative low-carbon fuels to manufacture a physical product are not in the waste management business and need not be classified as waste disposal sites. This would align Ontario with processes in other jurisdictions.

The proposed framework would continue to require these facilities to obtain and comply with ECAs for air emissions, and, where applicable, wastewater, but they would not be subject to waste disposal site requirements. The ministry's existing stringent standards and guidelines would continue to apply, and the offsite storage and processing of these materials would continue to require an ECA. Requirements for community consultation would be included in the ECA as would the ability for third parties to appeal approvals to the Environmental Review Tribunal. Transportation of the fuels would still require an ECA or a registration in the EASR.

Demonstration Projects

The proposed framework would give industry greater flexibility in identifying and testing potential alternative low-carbon fuels.

The proposed framework would continue the current limit of using 100 tonnes of alternative low-carbon fuel per day for a demonstration project, but would clarify that this limit would apply only to these new candidate materials; the limitation would not apply to any low carbon alternative fuels that have already been approved for ongoing use. This change enables facilities to assess different types of fuel by undertaking several short-term demonstrations periodically throughout facility operations subject to meeting environmental standards.

The ministry would prescribe time limits on demonstration projects to ensure that facilities transition to ongoing use or end the demonstration period. The following time limits are being proposed:

  • 30 consecutive days operation for a demonstration project (which could involve a series of assessments using different alternative low-carbon fuels);
  • 90 days per year for operation of demonstration projects at the site; and
  • a maximum three year period during which demonstration projects may be undertaken, from the beginning of operation (combustion as fuel) of the first project.

The current practice of exempting demonstration projects from public consultation requirements of the Environmental Bill of Rights and third-party appeal provisions would be maintained. To maintain transparency, Information Notices on demonstration projects would continue to be posted to the Environmental Registry.

Ongoing Use

The proposed framework would maintain transparency and accountability by requiring facilities to publicly consult on the potential environmental impacts of any ongoing use of alternative low-carbon fuel prior to applying for ECAs. This new process would apply to facilities seeking approval for ongoing alternative low-carbon fuel use and would maintain the current level of environmental protection (for example, by requiring environmental impact studies).

The new requirements could include:

  • examination of potential environmental impacts and mitigation measures;
  • procedures to ensure the alternative low-carbon fuel is environmentally acceptable;
  • consultation with the public and other interested stakeholders;
  • documentation and assessment of comments received; and
  • preparation of a summary report to be submitted to the ministry with the application for an ECA.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Dianne Saxe
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