Environment Canada has launched Phase I of its Credit for
Early Action Program, a part of its proposed intensity-based
cap-and-trade regime for large industrial emitters.1
The program is designed to offer a one-time allocation of
credits to those eligible parties that invested in measures to
reduce their greenhouse gas (GHG) emissions between 1992 and
2006. Eligible parties will be able to use credits earned
through the program to meet their compliance obligations under
the proposed federal regime.
Although the federal government will not issue Early Action
Credits until 2009, parties wishing to apply for credits must
submit a Notice of Interest to Environment Canada by
July 28, 2008. In this Notice, parties must
provide Environment Canada with administrative information
about the facility where the reductions took place and a
description of the actions for which the applicant is seeking
credit. Environment Canada is also requiring applicants to
submit more detailed information by September 5, 2008.
The federal government will issue Early Action Credits worth
only the equivalent of 15 megatonnes of carbon dioxide, which
will be allocated to eligible parties, pro rata, between 2010
To be eligible for Early Action Credits, parties must prove
a historical GHG reduction initiative that meets the following
It must have reduced emissions of carbon dioxide,
methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons
or sulphur hexafluorides;
It must have resulted in initial reductions that occurred
in 1992 or later, and the reductions must have continued at
least until December 31, 2006;
With certain exceptions, it must have occurred at a
single large industrial facility in one of the sectors
designated in Environment Canada's December 2007
"Notice with respect to reporting of information on air
pollutants, greenhouse gases and other substances for the
2006 calendar year;"2
It must have occurred at a facility where 2006 emissions or
capacity exceeded the minimum threshold specified in the
following table for that facility's sector (if the
facility's sector is not specified, the threshold
50 kilotonnes of carbon dioxide equivalent
50 kilotonnes CO2e
Natural gas pipelines
50 kilotonnes CO2e
Upstream oil and gas
3 kilotonnes per facility and 10,000 barrels of
oil equivalent per day per company
It must have resulted in reductions beyond those that
would have resulted from the business conditions that existed
when the reductions first occurred; and
It must have resulted in GHG reductions that have not
already received a credit through a mandatory program or in a
voluntary system, such as the Pilot Emission Removals,
Reductions and Learnings and the Greenhouse Gas Emission
Reduction Trading Pilot.
2. Generally, these sectors are alumina and aluminum;
base metal smelting; cement; chemicals manufacturing;
electricity; certain iron, steel and ilmenite smelting; iron
ore pellets; lime; natural gas transmission and storage (but
not distribution); natural gas liquids; oil sands; petroleum
refining; potash; pulp and paper; and upstream oil and
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