Bill 19, if passed, would pave the way for the new Technology Innovation and Emissions Reduction (TIER) system in Alberta.
TIER, the centrepiece of the Government of Alberta’s upcoming climate strategy, is a system that aims to help energy-intensive facilities find innovative ways to reduce emissions and invest in clean technology to stay competitive and save money. It is a solution that would allow the province to reduce emissions without interference from Ottawa, according to the Government of Alberta.
“Industry has made it clear they don’t want Ottawa dictating carbon pricing in Alberta,” said Jason Nixon, minister of environment and parks. “We’re standing up for Alberta’s job creators, like oil and gas, by bringing forward TIER, which is a sensible, innovative approach to reducing emissions and protecting our shared environment. The system will help industries create emissions-reducing technologies and solutions that keep businesses competitive without the need for nickelling and diming Alberta families.”
TIER requires electricity generators to meet a “good-as-best-gas” benchmark, where their emissions are equal to the cleanest natural gas-fired generation plant. All other facilities that emit more than 100,000 tonnes of carbon dioxide must reduce their emissions by 10 per cent in 2020. Facilities will need to reduce emissions by an additional one per cent every year after 2020.
“Alberta’s energy sector has the highest social, environmental, and labour standards in the world,” said Sonya Savage, minister of energy. “According to government analysis, oil sands emissions intensity decreased by 19 per cent between 2011 and 2017. This is due, in part, to world-leading innovation that is being developed right here in our province. The TIER program will accelerate this innovation and ensure our oil and gas industry continues to foster further investment and, most importantly, create jobs for Albertans.”
To meet the TIER requirements, facilities can reduce their emissions or:
- Use credits from facilities that have met and exceeded their emissions targets.
- Use emission offsets from organizations that are not regulated by TIER, but have voluntarily reduced their emissions.
- Pay into the TIER Fund at $30 per tonne of carbon dioxide. Bill 19 would create the TIER Fund, which would support innovative and cleaner Alberta-based technologies. A portion of the fund would also go toward operations for the Canadian Energy Centre and help reduce the provincial deficit, as outlined in Budget 2019.
“Alberta’s oil and gas industry is looking—above all— for certainty, when it comes to the province’s emissions-reduction regulations,” said Tim McMillan, president and chief executive officer of the Canadian Association of Petroleum Producers. “We applaud the Government of Alberta for crafting a policy that effectively protects our shared environment while boosting confidence for job creators in our world-class energy industries.”
TIER will protect small and medium industrial oil and gas facilities from the federal carbon price by allowing them to opt in to the TIER regulation. This will reduce costs for industry and help businesses stay competitive while reducing emissions.
TIER will also reward high-performing facilities that have implemented emissions-reducing technologies by helping them reduce costs or generate Emissions Performance Credits (EPCs). Regulated facilities that are able to beat their emissions-reduction target under TIER can generate EPCs, which can then be banked for future use or sold to other regulated facilities that have not met their emissions-reduction requirements.