The Alberta government is proposing changes to TIER. What are they?
Alberta's government has begun the process of reviewing TIER - the Technology Innovation and Emissions Reduction Regulation. This is the main piece of legislation that sets out who must meet emission reductions in Alberta, by how much, and what options emitters have to come into compliance.
TIER governs both the annual compliance reporting cycle for industry - including facilities that have opted-in to the provincial system in preference to being covered by the Federal Fuel Charge - and the workings of the Alberta emissions offset system.
Given the Federal government's announcements in this space over the last few months - which include
developing a plan to cap oil and gas sector emissions to achieve net-zero emissions by 2050, including a 31 per cent reduction from 2005 levels by 2030
reducing oil and gas methane emissions by at least 75 per cent by 2030
developing a regulated Clean Electricity Standard and
increasing the price of carbon to $170/tonne by 2030
- there is clearly a lot for the provincial government to consider in order to have its provincial GHG framework accepted as equivalent to the Federal government's (which is essential for the province to maintain control over this area of regulation).
The review must be completed by December 31, 2022, when TIER will expire. An online engagement survey has been launched by the provincial government. Some of the key changes that the government is considering, and is seeking feedback on:
Allowing trade-exposed, emissions intensive facilities to opt-in at 2,000 tonnes/yr (instead of the current 10,000 tonnes/yr)
Expanding coverage of conventional oil and gas aggregates to include venting, flaring and fugitives (instead of just stationary fuel combustion)
Increasing the tightening rate on emission benchmarks to 2%, including on High Performance Benchmarks (instead of 1% applied only to Facility Specific Benchmarks)
Making changes to the High Performance Benchmarks for electricity, heat and hydrogen
Allowing negative emission allocations
Increasing the carbon price in line with the Federal Government's plans
Removing the crediting extension period for offset projects and limiting crediting life to only 8 years
Reducing the crediting life for offsets and emission performance credits to below the current 8 years
Increasing the proportion of compliance that may be met through the use of offsets and/or emission performance credits up from the current 60%
Aligning the electricity grid displacement factor (EGDF) with the high performance benchmark (HPB) for electricity
Implementing a new, scheduled process for emission offset protocol development
Requiring emission offset projects to report at least once every 3 years
Removing the favorable rate for credit creation for carbon capture, utilization and storage (CCUS) projects so that they may only create 1 credit per tonne, the same as all other project types
Changing CCUS credits so that they may be directly claimed by the capture facility, rather than the sequestration facility
Changing the accounting for bioenergy with CCS so that implementing this kind of project results in a net benefit for compliance facilities, AND
Changes to the cost containment program, including making facilities that enter the regulation after Jan 1, 2023 ineligible for cost containment.
This is the provincial government's preliminary approach to updating TIER and is critical reading for anyone working in Alberta's carbon market.
The online engagement survey is here and is open until August 7, 2022 (note also that an offline PDF copy of the survey questions is here and can be used to prepare your answers before starting the online engagement survey).