Ontario Cap and Trade? What do I do first?

Understanding that the Cap and Trade issue is now a matter of interest to many of our clients, ORTECH has outlined a few interim measures facilities may consider in preparation of the pending regulation.

What Should Industry do Today?

For facilities currently subject to the Ontario Greenhouse Gas Emissions Reporting (Ontario Regulation 452/09), emitting more than 25,000 MT of CO2 equivalent per year, Ontario’s Cap and Trade proposal will almost certainly impact your operations.  Facilities who estimate their emissions to be just under this threshold should conduct a due diligence review.

Based upon some speculation on where the proposed regulation may go from here, facilities with GHG emissions over 10,000 MT per year are currently included in proposed amendments to Ontario’s Greenhouse Gas Reporting Regulation (O.Reg 452/09).  These facilities should assess their emissions and opportunities in the event the Cap and Trade system contains a phased in approach for this category of emitters.  A phased in approach for this group would conceivably first follow the reporting of emissions to establish baseline values, a form of verification, followed by inclusion in the Cap and Trade program. 

Regardless of the specific details which will eventually go into the development of Ontario’s Cap and Trade system some key actions can be taken by Industry today which may present benefit to current operations, these include:

Accuracy and Documentation of GHG Emissions

An accurate understanding of current and projected future GHG emissions will be important.  GHG emissions which will be traded (or taxed) must accurately reflect emissions from the facility.  For many facilities past emission inventory efforts were largely undertaken to fulfil a regulatory reporting requirement.  With the pending Cap and Trade system, it may be beneficial to refine emission estimates through natural gas analysis source testing, predictive emission modelling, or the addition of process monitors with data acquisition systems may prove be justified and beneficial.

Industry Benchmarking

GHG emissions are reported annually both to the Ontario Government (Regulation 452/09 Greenhouse Gas Emissions Reporting) and the Federal Government.  Combined with other available information sources an industrial profile can be established for a given industrial sector.  Understanding how your facility compares to others within the same sector serves both to identify the potential magnitude of opportunities and to identify top performing industries within the sector.

Facility Energy Audit and Cost / Benefit Analysis

A Cap and Trade system is based upon the assumption that some industries can reduce emissions more cost effectively than others.  Low cost emission reduction actions could be sold on the market, presumably at a profit, to other industries which face higher cost emission reduction.  Although many industrial facilities have conducted energy audits in the past, the associated rate of return calculation and project risk analysis (i.e., if reduction targets are not realized) should be re-visited under the Cap and Trade approach.

What Can ORTECH Do For You?

ORTECH can assist you in reviewing your current GHG inventory (current and future) and develop a list of recommended actions to improve accuracy, reliability and documentation.  For facilities which have implemented early actions ORTECH can review this information to quantify and document these results.  ORTECH has extensive experience in natural gas heating valve and GHG species, analysis, source measurement, predictive emission modelling and data acquisition systems to assist with accurately quantifying GHG emissions from your facility.

Included in the review of current GHG emission inventory ORTECH can undertake a benchmarking activity to rate your facility within your indu

ORTECH can also assist with an energy audit and associated cost benefit analysis.  ORTECH has been immersed in the Ontario electricity market since 1999 and carries out a broad range of services for energy projects.  Unlike other consultants in the energy field, ORTECH specializes in technical due diligence and financial analysis and control including estimates of capital cost, forecasts of operating and maintenance expenses, and analysis of project costs.

 ORTECH can also provide related GHG services including:

  • training
  • regulation interpretation
  • preparation for GHG verification audits