Today, the federal government announced that it has accepted Alberta’s new Technology Innovation and Emissions Reduction ("TIER") Regulation as being compliant with the 2020 federal benchmark for carbon pricing systems. This means Alberta will be regulated by the provincial TIER program, rather than the federal program, for 2020. However, the TIER program will be subject to annual reviews to ensure it meets the rising federal benchmark ($40 per tonne in 2021 and $50 per tonne in 2022).
The federal program allows provinces and territories to develop their own carbon pricing systems. If these proposed systems meet the federal benchmark, as Alberta’s does, then the provincial system applies; otherwise, the federal program applies.
The provincial TIER program requires facilities which emitted more than 100,000 tonnes of CO2 from 2016 onward to reduce their emissions and meet yearly benchmarks. Electricity generators have a different requirement: if they emit more than 100,000 tonnes of CO2 per year, they must comply with the benchmark of 0.37 tonnes of CO2 per megawatt-hour. The TIER system allows facilities to offset their emissions and earn, or buy, performance credits. They can also pay into a provincial fund for credit against their emissions. For more information on Alberta’s TIER program and how it works, see our earlier blog post on the subject.
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