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New regulations set to cost Alberta large emitters upwards of $1.2B a year

December 7, 2017

CALGARY — Large carbon emitters in Alberta are expected to pay upwards of $1.2 billion a year in levies by 2020 under updated regulations announced Wednesday.

The government, however, said its plan includes a phase-in period and significant funding assistance to make it easier for industry to adapt to the new regime, while offsets and credits mean government will take in closer to $800 million.

Environment Minister Shannon Phillips said the new regulations are intended to incentivize industries to reduce emissions, with facilities below a set level of emissions rewarded and those above it penalized.

“The improved rules that we are releasing today will reward companies that use best practices and reward investment in modern and efficient facilities.

“That’s how we are going to create a race to the top in Alberta, by rewarding the top performers in each sector,” said Phillips.

The new rules are expected to reduce emissions by 20 million tonnes by 2020, and 50 million tonnes by 2030, about the same as the emissions from 11.5 million cars, said Phillips.

The new structure, called the Carbon Competitiveness Incentives, comes into place Jan. 1, 2018 and applies to facilities like oilsands operations, cement plants and fertilizer production that produce more than 100,000 tonnes of carbon dioxide a year.

Industry will only have to pay 50 per cent of the costs next year, moving to 75 per cent for 2019, before the full regulations take force by 2020.

The regulations also set longer-term incentives for improved performance, with the amount large emitters are allowed to produce without costs reduced by one per cent a year.

Overall, the large emitter regulations exempt much of the facility emissions from the carbon levy in an effort to allow them to remain competitive against jurisdictions with less stringent regulations.

The government said the $1.4 billion in funding announced Tuesday will also help industry adapt and increase efficiencies before the full costs of the new regulations take force, including $440 million specifically for steam-based oilsands operations to improve efficiencies and reduce emissions.



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