1. What is the purpose of these regulations?
The primary purpose of the Multi-Sector Air Pollutants Regulations (the Regulations), made under the authority of the Canadian Environmental Protection Act, 1999, is to protect the environment and health of Canadians by setting mandatory, nationally consistent air pollutant emission standards for nitrogen oxides (NOx) and sulphur dioxide (SO2) from the cement sector and from the boilers, heaters and stationary spark-ignition engines that are used in several industrial sectors at a level that is consistent across the country.
Air pollutant emissions negatively affect human health, place a burden on the health care system, degrade the environment and have an adverse impact on the economy. In particular, air pollution can worsen existing conditions, such as asthma and heart disease, as well as drive daily changes in ozone and fine particulate matter that are associated with increased hospital admissions, medical visits, and premature deaths.
2. What are the key elements of these regulations?
The Regulations include mandatory performance standard requirements for:
- NOX emissions from large boilers and heaters that burn gaseous fossil fuels, such as natural gas, and which are used in several industrial sectors
- NOX emissions from stationary spark-ignition engines that burn gaseous fuels, such as natural gas, and which are used by several industrial sectors
- NOX and SO2 emissions from cement manufacturing facilities
3. How do these regulations affect Canadian businesses?
Businesses most affected by the Regulations are those that:
- Own or operate large new and existing boilers and heaters that burn gaseous fossil fuels, such as natural gas, at facilities in eleven industrial sectors (alumina and aluminum; base metal smelting; cement; chemicals and fertilizers; electricity; iron ore pellets; iron, steel and ilmenite; oil sands; potash; pulp and paper; and oil and gas).
Ongoing emission testing and reporting will be required for the larger boilers and heaters (>105 GJ/hr). There is a transitional period of up to three years to ease financial impacts during which some equipment will be required to meet NOX emission intensity limits that are less stringent than equipment that is installed after the transitional period.
- Own or operate new and existing stationary engines at facilities in the oil and gas sector (defined in the Regulations as the upstream oil and gas and the natural gas transmission pipeline sectors, and related underground storage facilities in those two sectors); or that own or operate new engines in eleven other industrial sectors (alumina and aluminum; base metal smelting; cement; chemicals and fertilizers; electricity; iron ore pellets; iron, steel and ilmenite; oil sands; potash; pulp and paper; and petroleum refineries).
Compliance with the NOX requirements for existing engines can be achieved on a per engine basis or based on the average of the annual emissions of all of a company’s engines. Engine registration and ongoing emission testing and reporting will be required;
- Own or operate new and existing cement manufacturing facilities that must continuously monitor the release of NOX and SO2 and meet emission intensity standards.
The regulations are expected to result in compliance costs of $86.6 M for owners and operators of boilers and heaters, $385.4 M for owners and operators of engines, and $7.3 M for grey cement facilities producing clinker over the 2016 to 2035 period. It is expected that some of the compliance costs would be passed on to consumers, however, the degree of this pass through would depend on the specific circumstances and the competitive position of the affected sectors as well as, in some cases, facility-specific circumstances, including geographical location.
4. What is the timeline for implementation?
The Regulations include separate coming-into-force provisions for covered sector and equipment types, including:
- Boilers and heaters put into service after the Regulations come into force are subject to an emission limit for NOX. All existing boilers and heaters whose NOx emission intensity exceeds 70 g/GJ have an obligation that is phased in over the intitial 20 years. All owners or operators of existing boilers and heaters must send Environment and Climate Change Canada, within the first 18 months of the Regulations coming into effect, a report that classifies their existing equipment.
- Engines manufactured on or after September 15, 2016 are subject to an emission limit. New engines must be registered within a year of starting operation. Existing engines must be registered by 2019. Existing engines must meet NOx emission limits which are phased-in, with a first phase starting in 2021 and a more stringent second phase in 2026.
- New and existing cement manufacturing facilities must comply with performance standards for NOX and SO2 per tonne of production. Owners and operators are required to monitor emissions from cement kilns by 2018 and be in compliance with the performance standard by 2020.