Medicine Hat News

Emission rules won’t affect city much

Changes aim to reward those who produce the least amount of carbon dioxide

- COLLIN GALLANT cgallant@medicineha­tnews.com Twitter: CollinGall­ant

New regulation­s to cut industrial carbon dioxide production shouldn’t greatly effect the City of Medicine Hat’s power production unit, but effects on other locallybas­ed major industries remains to be determined.

Environmen­t Minister Shannon Phillips announced changes Wednesday to the Specified Gas Emitters Regulation, stating that industry-specific standards would reward “best in class” operations with rebates.

Others would continue to pay a levy of $30 per tonne above certain levels, but now have access to an investment fund to buy new, pollution lowering technology.

In the city’s case, it would remain a payer into the system, according to local officials, but its costs would not change dramatical­ly in the incoming rating system.

“(Our emissions) are slightly higher than best in class,” said Travis Tuchschere­r, a manager of asset optimizati­on in the utility’s business department.

“We’ll continue to pay in ... we feel comfortabl­e with the numbers we have used and there will not be a large budget impact either way.”

The city’s powerplant is one of four local entities captured under the regulation­s by producing more than 100,000 tonnes of CO2 annually.

The regulation­s — which are apart from the carbon levy that already exempts large industry — also applies to local CF Industries fertilizer plant, methanol-producer Methanex, and carbon black maker Cancarb.

Private industry officials told the News they needed more time to study the possible effects and economics of the plan that will be phased in by 2020.

A new power generation standard however, takes effect on Jan. 1, 2018.

Other sectors, such as petrochemi­cal and fertilizer production, will see standards developed, including product specific rates and allowances to shield some trade-exposed industries.

Phillips named the local plants during a teleconfer­ence to launch the system.

“We need to get in a room

with them and make sure the innovation funding is going to work,” she said. “There are a few large employers in Medicine Hat that are affected.”

Changes were first proposed in 2015, when the NDP government launched its climate action strategy, and discussion­s since then went into designing the system, she said.

For about a decade, Alberta’s largest polluters have paid under the SGER system, which charges if specific reduction targets, set against an individual facility’s historic output, are not met.

The Carbon Competitiv­eness Incentive program replaces it, and would “reward companies that use best practices and reward investment in modern and efficient facilities," she said.

“That’s how we are going to create a race to the top in Alberta.”

About one quarter of facilities in each sector — those with lowest emissions — would receive credits they could sell to others. Others would need to buy credits and could access a new $440-million fund to help upgrade facilities.

Phillips also said allowances will be made for industries that face competitio­n from counties with less stringent carbon pricing, or in unique sectors that have fewer entries.

Government critics have coined the term “carbon leakage” to argue the provincial economy is at a disadvanta­ge versus less stringent jurisdicti­ons.

“Right now there is a patchwork of carbon pricing system, there is a consensus (about carbon reduction),” said Phillips.

Convention­al oil and gas operations are typically too small to qualify, though some large gas plants and oilsands sites are affected.

Previously, individual facilities were judged against their own historic emission levels and required to either reduce the figure or buy offset credits from renewable energy projects or agricultur­al producers.

Medicine Hat’s power plant currently transfers credits stockpiled from its landfill composting activities, and also receives flow-through credits from the privately-owned Box Springs Wind Farm.

 ?? NEWS PHOTO EMMA BENNETT ?? The province is updating its strategy to reduce emissions by the largest carbon dioxide producers in Alberta based on sector-by-sector standards, which Environmen­t Minister Shannon Phillips says will reward best-in-class industry and shield some others...
NEWS PHOTO EMMA BENNETT The province is updating its strategy to reduce emissions by the largest carbon dioxide producers in Alberta based on sector-by-sector standards, which Environmen­t Minister Shannon Phillips says will reward best-in-class industry and shield some others...

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