What you need to know about Canada’s regulatory framework for GHG emissions
November 17, 2020
November 17, 2020
The Strategic Assessment of Climate Change will impact project development in Canada. But how?
On October 6th, 2020, the Government of Canada released the final version of its Strategic Assessment of Climate Change (SACC). The SACC describes new policies regarding greenhouse gas (GHG) emissions and climate change that must be followed by project proponents when undergoing federal environmental assessments. The SACC also requires projects with a life expectancy extending beyond 2050 to provide a credible plan for the project to achieve net zero emissions. Essentially, all future projects seeking federal approval must meet SACC standards.
So, what does this mean for major resource development projects in Canada? How do these projects fit into the new framework? In this blog, I’ll break down the SACC and address the risks and implications for project development, including:
The SACC requirements fall under two main topics: GHG/carbon emissions and climate resilience. The requirements related to GHG/carbon emissions include the following:
Project emissions are calculated using Equation 1 in the SACC. Total emissions are calculated by combining direct GHG emissions with acquired GHG emissions, and then subtracting captured carbon, avoided GHG emissions, and offset credits. Let’s look how each component of the equation is defined:
So, if those are the ways that emissions are calculated, what are the most effective ways to reduce emissions and follow the guidelines of the SACC?
I’d certainly encourage a collaborative approach when creating credible plans.
The most impactful mitigation measures are those that reduce the creation of emissions in the first place. But reducing venting and fugitive emissions—emissions that are lost due to inefficiencies such as leaky valves or pipes—can also help decrease the release of methane gases.
Energy efficiency can reduce emissions on site, and excess energy can be repurposed for heat, steam, or electricity generation. Electrification should also be considered as a potential option to reduce emissions. But note that the benefits of electrification will vary significantly based on the emission intensity of the grid-generated electricity in your jurisdiction.
The SACC makes it clear: The definition of a credible net zero plan is anticipated to be revisited on a periodic basis—it’s not set in stone and will likely evolve.
The credible plan should include the outcome of the BAT/BEP analysis, as well as a periodic update of BAT/BEP throughout the operational life when the project becomes feasible. The plan should include the frequency that the plan will be revisited, the evaluation criteria, and the decision-making processes for plan updates. The plan should also include any supportive actions by the government needed to execute the net zero plan, such as electrification or a robust offset system.
I’d certainly encourage a collaborative approach when creating credible net zero plans, which should include engaging development and financial personnel, risk managers, asset managers, and compliance. The plan to achieve net zero should be incorporated into a risk management system and reviewed annually to maximize payback and minimize the financial risk of the transition to a low/no carbon future.
As we deal with climate change, SACC puts Canada on a path to reduced GHG emissions and a net zero plan. Major resource development projects must take note of these changes.
I’m excited to see where we head and to talk about those emissions and the changes to regulations.