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Cap & Trade: Deadlines fast approaching, is your business prepared to mitigate costs?

August 25, 2016 - All News
 
 
This is a reminder to mid-sized manufacturers that Ontario’s deadline for its new cap and trade program is Sept 1.  
 
Plants that emit in the range of 10,000-25,000 metric tonnes of carbon have a choice — opt-in and be eligible for allowances, thought to be up to 100% in 2017, or don’t opt-in and pay the tax.  
 
Law firm Stikeman Elliot, in its Cap-And-Trade Highlights, estimates the annual cost to small manufacturers will be $136,000 next year increasing to $720,000 annually by 2030. Have you budgeted for this? Or will you meet the opt-in deadline? 
 
Brampton Board of Trade Director Josh Belczyk, GM for Zochem, held a roundtable discussion on the topic at the Brampton Board of Trade recently, outlining the significant amount of money that can be saved simply by opting in. 
 
Mid-sized manufacturers are scrambling this week to meet the deadline. Josh provided some helpful insight, information and contacts that can help you better understand your options and mitigate the impact of Ontario’s new cap and trade system on your business. Highlights of the roundtable discussion follows.
 
 

HOW TO MITIGATE COSTS OF ONTARIO’S NEW CAP AND TRADE SYSTEM 

 
  1. Plants emitting between 10000-25000 can opt-in. Those below this threshold will pay the tax which will appear as a line on their energy distributor’s bill (ie Enbridge). Those above the threshold have automatically been granted allowances until 2020. 
  2. Opt-in deadline is Sept 1
  3. To opt-in, companies must have their annual emissions verified by an accredited company. Zochem has used environmental consultants GHD. (Contact info below) Companies are encouraged to search for accredited environmental engineers and those certified in air compliance. 
  4. Allowances are expected to be 100% in 2017 and then percentages reduced each year. Ontario has yet to provide full clarity on this structure.  
  5. According to Stikeman’s quick facts, Ontario is expected to set an aggregate cap on emissions. That cap will equate to the total number of carbon allowances that will be sold through auction or issued by the Province free of charge for select competitively sensitive industries such as cement, lime and steel. One allowance is expected to be equal to one tonne of emissions.   
  6.  Emitters will be required to obtain sufficient allowances to cover their emissions in a given compliance period – the first being from January 2017 to December 2020. 
  7. The cost of purchasing allowances is expected to be passed on to consumers initially, typically in the form of higher energy prices. Stikeman Elliott has estimated Ontario’s costs. See chart on Cap-And-Trade Highlights.
Companies wanting more information about their options and impending costs are encouraged to visit Ontario.ca/capandtrade or utilize the following contacts:
 
 

Ontario Government

Cap and trade program
Ontario.ca/capandtrade
Phone: 1-888-217-3326 (toll free)
Email: CThelp@ontario.ca
Monday to Friday 8:30am-5;00pm EST
 

Technical Questions About the Compliance Instrument Tracking System Service

Accessing your account, general navigation, functionality and re-setting your password will be answered by WCI, Inc. staff
Phone: 1-866-682-7561 (toll-free)
Email: help@wci-citss.org
Monday to Friday 9:00am to 9:00pm EST
 

Questions About Reporting Greenhouse Gas Emissions – GHG Emissions Help Desk

Phone: 416-649-4480 or 1-855-6400 (toll free)
Email: ghgreporting@ontario.ca
 

Enbridge Gas

Enbridgegas.com/capandtrade
Engridgegas.com/businesses/energy-management
 

Environmental Consultants

GHD
651 Colby Drive
Waterloo, ON
N2V 1C2
Phone 519-884-0510
Fax: 519-884-0525
www.ghd.com
 
Stikeman Elliott
5300 Commerce Court West
199 Bay Street
Toronto, ON M5L 1B9
Phone: (416) 869-5500 
Toll-Free: (877) 973-5500
Fax: (416) 947-0866
 

Other resources

Cap and Trade in Ontario – Avoiding the EU’s Pitfalls by P. Jason Kroft and Sam Dukesz

Cap & Trade Highlights by Stikeman Elliot

OCC Cap & Trade Report 

More on the Brampton Board of Trade Blog