OBPS credits

OBPS in Different Provinces and Territories

The federal OBPS is part of Canada’s broader carbon pricing framework under the Greenhouse Gas Pollution Pricing Act. However, provinces can implement their own systems, as long as they meet or exceed the federal benchmark. If a province’s system is deemed equivalent or more stringent, the federal OBPS does not apply in that province.

The implementation of the OBPS varies across provinces and territories, reflecting regional preferences and policies.

Here’s a breakdown:

Federal OBPS

Applies in: Manitoba, Prince Edward Island, Yukon, and Nunavut.

Program Name: Federal Output-Based Pricing System (OBPS)

• Administration: Environment and Climate Change Canada (ECCC)
• Benchmarks: Industry-specific benchmarks based on national standards.
• Allowances/Credits: Facilities earn surplus credits for emissions below the benchmark and must submit compliance units for emissions above the benchmark.

Alberta

Program Name: Technology Innovation and Emissions Reduction (TIER) system

• Administration: Alberta Environment and Parks
• Benchmarks: Industry-specific benchmarks, typically set at the top quartile of performance within the sector.
• Allowances/Credits: Facilities earn Emission Performance Credits (EPCs) for emissions below the benchmark and must submit TIER Fund Credits or EPCs for emissions above the benchmark.

British Columbia

Program Name: British Columbia Output-Based Pricing System (BC OBPS)

• Administration: British Columbia Ministry of Environment and Climate Change Strategy
• Benchmarks: Industry-specific benchmarks are established to align with both provincial climate targets and federal standards.
• Allowances/Credits: Facilities that emit below their benchmarks earn surplus credits, which they can use for future compliance or trade within the market. Facilities exceeding their benchmarks must submit compliance units, which can be in the form of surplus credits or payments into the system.
• Note: As of April 2024, British Columbia has transitioned from relying solely on its carbon tax system to implementing its own OBPS for large industrial emitters that emit over 10,000 tons of carbon dioxide equivalent (tCO₂e) per year. 

Saskatchewan

Program Name: Saskatchewan Output-Based Performance Standards Program (OBPS)

• Administration: Saskatchewan Ministry of Environment
• Benchmarks: Sector-specific performance standards.
• Allowances/Credits: Facilities can generate Saskatchewan-based Performance Credits (PCs) for emissions below the benchmark and must submit compliance units for emissions above the benchmark.

Manitoba

Program Name: Federal OBPS (no separate provincial system)

• Administration: Environment and Climate Change Canada (ECCC)
• Benchmarks: Industry-specific benchmarks based on national standards.
• Allowances/Credits: Surplus credits for emissions below the benchmark; compliance units required for emissions above the benchmark.

Ontario

Program Name: Ontario Emissions Performance Standards (EPS).

• Administration: Ontario Ministry of the Environment, Conservation and Parks (MECP)
• Benchmarks: The EPS sets sector-specific emissions intensity standards that facilities must meet. These benchmarks are based on the emissions performance of leading facilities in each sector.
• Allowances/Credits: Facilities that emit less than their allocated emissions limit earn Emissions Performance Units (EPUs), which can be banked for future use or traded with other facilities. Facilities that exceed their emissions limits must submit EPUs or pay into the system to cover the excess emissions.

 

• Note: Ontario’s EPS program was introduced as an alternative to the federal OBPS, aiming to address emissions from large industrial facilities while maintaining provincial control over the carbon pricing mechanism. It aligns with the federal government’s requirements while allowing Ontario to tailor the system to the province’s specific economic and environmental context.

Quebec

Program Name: Quebec Cap-and-Trade System for Greenhouse Gas Emissions (Système de plafonnement et d’échange de droits d’émission de gaz à effet de serre)

• Administration: Quebec Ministry of the Environment and the Fight Against Climate Change
• Benchmarks: Set caps on total GHG emissions allowed.
• Allowances/Credits: Facilities receive or buy emissions allowances and can trade them within the market.

New Brunswick

Program Name: New Brunswick Output-Based Pricing System (NB OBPS)

• Administration: New Brunswick Department of Environment and Climate Change
• Benchmarks: The NB OBPS sets sector-specific emissions intensity benchmarks tailored to local industries, designed to reflect best practices and efficient performance within each sector.
• Allowances/Credits: Facilities that emit below their allocated benchmarks earn Performance Credits, which can be used for future compliance or traded with other facilities. Facilities that exceed their benchmarks must submit credits or make payments to cover the excess emissions.

Nova Scotia

Program Name: Nova Scotia Output-Based Pricing System for Industry 

• Administration: Nova Scotia Department of Environment and Climate Change
• Benchmarks: The NS OBPS sets industry-specific emissions intensity benchmarks designed to reflect best practices and efficient performance within each sector.
• Allowances/Credits: Facilities that emit below their benchmarks earn Performance Credits, which can be used for future compliance or traded. Facilities exceeding their benchmarks must submit credits or make payments into the system to cover the excess emissions.

Prince Edward Island

Program Name: Federal OBPS (no separate provincial system)

• Administration: Environment and Climate Change Canada (ECCC)
• Benchmarks: Industry-specific benchmarks based on national standards.
• Allowances/Credits: Surplus credits for emissions below the benchmark; compliance units required for emissions above the benchmark.

Newfoundland and Labrador

Program Name: Newfoundland and Labrador Performance Standards System

• Administration: Newfoundland and Labrador Department of Environment and Climate Change
• Benchmarks: The system sets emissions intensity benchmarks for various industrial sectors based on performance standards. These benchmarks are designed to incentivize reductions in emissions relative to the production output of each facility.
• Allowances/Credits: Facilities that perform below their assigned benchmarks earn Performance Credits. These credits can be used to cover future emissions, traded with other facilities, or used for compliance. Facilities exceeding their benchmarks must either purchase credits or make payments into the system to cover their excess emissions.

Northwest Territories

Program Name: Carbon Tax with rebates for large emitters

• Administration: Northwest Territories Department of Finance
• Benchmarks: Not specifically an OBPS, but rebates mitigate the carbon tax impact on large emitters.
• Allowances/Credits: Not applicable.

Yukon

Program Name: Federal OBPS (no separate territorial system)

• Administration: Environment and Climate Change Canada (ECCC)
• Benchmarks: Industry-specific benchmarks based on national standards.
• Allowances/Credits: Surplus credits for emissions below the benchmark; compliance units required for emissions above the benchmark.

Nunavut

Program Name: Federal OBPS (no separate territorial system)

• Administration: Environment and Climate Change Canada (ECCC)
• Benchmarks: Industry-specific benchmarks based on national standards.
• Allowances/Credits: Surplus credits for emissions below the benchmark; compliance units required for emissions above the benchmark.

Each region’s system is designed to align with both federal objectives and local economic and environmental contexts, providing flexibility and encouraging industries to reduce their emissions while maintaining competitiveness.