NEWFOUNDLAND AND LABRADOR REGULATION 31/19

NLR 116/18

1. (1) Section 2 of the Management of Greenhouse Gas Regulations is amended by renumbering it subsection 2(1) and adding immediately after paragraph (1)(a) the following:

(a.1) "authorization" means an authorization issued by the board under paragraph 134(1)(b) of the Canada-Newfoundland and Labrador Atlantic Accord Implementation Newfoundland and Labrador Act;

(2) Subsection 2(1) of the regulations is amended by adding immediately after paragraph (1)(e) the following:

(e.1) "drilling authorization" means an authorization which authorizes, whether exclusively or in conjunction with other activities, the conduct of exploration drilling activities;

(3) Subsection 2(1) of the regulations is amended by adding immediately after paragraph (1)(f) the following:

(f.1) "exploration drilling activities" means activities conducted by a mobile offshore industrial facility under the authority of a drilling authorization as classified by the board;

(4) Subsection 2(1) of the regulations is amended by adding immediately after paragraph (1)(l) the following:

(l.1) "mobile offshore industrial facility" means a mobile marine installation or structure that

(i) is capable of conducting offshore well drilling activities, and

(ii) has been approved by the board for well drilling activities in the offshore area under a drilling authorization;

(5) Paragraph 2(1)(n) of the Act is repealed and the following substituted:

(n) "offshore industrial facility" means an industrial facility located in the offshore area but does not include a mobile offshore industrial facility;

(6) Subsection 2(1) of the regulations is amended by adding immediately after paragraph (1)(n) the following:

(n.1) "operator" means

(i) in relation to an offshore industrial facility, a person who holds an authorization, and

(ii) in relation to a mobile offshore industrial facility, a person who holds a drilling authorization;

(7) Section 2 of the regulations is amended by adding immediately after subsection (1) the following:

(2) For the purposes of the Act and these regulations, an industrial facility includes an offshore industrial facility and a mobile offshore industrial facility, unless the context indicates otherwise.

2. Section 4 of the regulations is repealed and the following substituted:

Baseline emissions intensity

4. (1) The baseline emissions intensity of an industrial facility, other than an offshore industrial facility or a mobile offshore industrial facility, for the year 2019 shall be determined in accordance with the following formula:

BEI = AE₂₀₁₆+ AE₂₀₁₇
AP₂₀₁₆ + AP₂₀₁₇

where

BEI = baseline emissions intensity for the industrial facility;

AE = the industrial facility's actual emissions of carbon dioxide equivalent of greenhouse gases in a year expressed in tonnes rounded up to the nearest tonne, excluding biomass emissions and any emissions generated from a source category referred to in paragraphs 5(1)(f) to (i) of the Management of Greenhouse Gas Reporting Regulations; and

AP = the industrial facility's actual production in a year rounded up to the nearest tonne.

(2) The baseline emissions intensity of an industrial facility, other than an offshore industrial facility or a mobile offshore industrial facility, for the year 2020 and subsequent years shall be determined in accordance with the following formula:

BEI = AE₂₀₁₆+ AE₂₀₁₇ + AE₂₀₁₈
AP₂₀₁₆ + AP₂₀₁₇ + AP₂₀₁₈

where

BEI = baseline emissions intensity for the industrial facility;

AP = the industrial facility's actual production in a year rounded up to the nearest tonne.

(3) The baseline emissions intensity of an industrial facility, other than an offshore industrial facility or a mobile offshore industrial facility that commenced production after the year 2016 or was designated as an opted-in facility after the coming into force of these regulations shall be determined in accordance with the following formulas:

BEI_{yr 4} = AE_yr3
AP_yr3

BEI_yr5 = AE_yr3+ AE_yr4
AP_yr3 + AP_yr4

BEI = AE_yr3+ AE_yr4 + AE_yr5
AP_yr3 + AP_yr4 + AP_yr5

where

BEI_yr4 = baseline emissions intensity for the industrial facility for fourth year of production;

BEI_yr5 = baseline emissions intensity for the industrial facility for fifth year of production;

BEI = baseline emissions intensity for the industrial facility;

AP = the industrial facility's actual production in a year rounded up to the nearest tonne.

(4) Notwithstanding subsections (1) to (3), where an industrial facility, other than an offshore industrial facility or a mobile offshore industrial facility, has an unexpected interruption of production that has a material impact on its production in a year that is to be used to establish the industrial facility's baseline emissions intensity, the Lieutenant-Governor in Council may

(a) exclude that year from the calculation of the baseline emissions intensity and calculate the baseline emissions intensity on fewer years; or

(b) adjust the AP and AE in subsections (1) to (3) on a time denominated basis in a manner that attributes the period of production in a year as if it were a full year.

(5) The baseline emissions intensity of a mobile offshore industrial facility, for the year 2019 shall be determined in accordance with the following formula:

BEI = AE₂₀₁₆+ AE₂₀₁₇
HO₂₀₁₆ + HO₂₀₁₇

where

BEI = baseline emissions intensity for the mobile offshore industrial facility;

AE = the mobile offshore industrial facility's actual emissions of carbon dioxide equivalent of greenhouse gases in a year expressed in tonnes rounded up to the nearest tonne, excluding biomass emissions, any emissions generated from a source category referred to in paragraph 5(1)(j) of the Management of Greenhouse Gas Reporting Regulations and any emissions generated from exploration drilling activities; and

HO = the mobile offshore industrial facility's hours of operation rounded up to the nearest full hour, excluding any hours where the mobile offshore industrial facility's operations relate solely to exploration drilling activities.

(6) The baseline emissions intensity of a mobile offshore industrial facility for the year 2020 and subsequent years shall be determined in accordance with the following formula:

BEI = AE₂₀₁₆+ AE₂₀₁₇ + AE₂₀₁₈
HO₂₀₁₆ + HO₂₀₁₇ + HO₂₀₁₈

where

BEI = baseline emissions intensity for the mobile offshore industrial facility;

(7) The baseline emissions intensity of a mobile offshore industrial facility, that commenced production after the year 2016 or was designated as an opted-in facility after the coming into force of these regulations, shall be determined in accordance with the following formulas:

BEI_yr2 = AE_yr1
HO_yr1

BEI_yr3 = AE_yr1+ AE_yr2
HO_yr1 + HO_yr2

BEI = AE_yr1+ AE_yr2 + AE_yr3
HO_yr1 + HO_yr2 + HO_yr3

where

BEI_yr2 = baseline emissions intensity for the mobile offshore industrial facility for second year of production;

BEI_yr3 = baseline emissions intensity for the mobile offshore industrial facility for third year of production;

BEI = baseline emissions intensity for the mobile offshore industrial facility;

AE = the mobile offshore industrial facility's actual emissions of carbon dioxide equivalent of greenhouse gases in a year expressed in tonnes rounded up to the nearest tonne, excluding biomass emissions and any emissions generated from a source category referred to in paragraph 5(1)(j) of the Management of Greenhouse Gas Reporting Regulations or any emissions generated from exploration drilling activities; and

(8) Notwithstanding subsections (5) to (7), where a mobile offshore industrial facility has an unexpected interruption in its operations that has a material impact on its operations in a year that is to be used to establish the mobile offshore industrial facility's baseline emissions intensity, the Lieutenant-Governor in Council may

(a) exclude that year from the calculation of the baseline emissions intensity and calculate the baseline emissions intensity on fewer years; or

(b) adjust the HO and AE in subsections (5) to (7) on a time denominated basis in a manner that attributes the period of operations in a year as if it were a full year.

(9) The operator of a mobile offshore industrial facility that has a baseline emissions intensity established under subsection (5), (6) or (7) shall notify the board where the mobile offshore industrial facility

(a) exits the offshore area;

(b) undergoes modifications or retrofitting that could impact the mobile offshore industrial facility's greenhouse gas emissions; and

(10) Where the board determines that the modifications or retrofitting of a mobile offshore industrial facility impacts the mobile offshore industrial facility's greenhouse gas emissions, the board may recommend to the minister that the Lieutenant-Governor in Council establish a new baseline emissions intensity for the mobile offshore industrial facility.

(11) The minister may recommend to the Lieutenant-Governor in Council that a new baseline emissions intensity be established for the mobile offshore industrial facility where the minister is satisfied that

(a) one or more of the criteria set out in subparagraphs 6.1(1)(c)(i) to (iii) is met; and

(b) the modifications or retrofitting of the mobile offshore industrial facility impacts its greenhouse gas emissions.

(12) Where the Lieutenant-Governor in Council is satisfied that a new baseline emissions intensity should be established for the mobile offshore industrial facility, the Lieutenant-Governor in Council may establish a new baseline emissions intensity in accordance with subsection (7).

(13) For the purposes of subsection (7), the year in which the Lieutenant-Governor in Council determines that a new baseline emissions intensity should be established is considered to be year 2.

3. The regulations are amended by adding immediately after section 6 the following:

New baseline emissions intensity or baseline emissions level

6.1 (1) The Lieutenant-Governor in Council may establish a new baseline emissions intensity for an industrial facility or a new baseline emissions level for an offshore industrial facility where

(a) the industrial facility installs new machinery or equipment;

(b) either

(i) the operator requests a new baseline emissions intensity or baseline emissions level; or

(ii) the minister recommends that a new baseline emissions intensity or baseline emissions level be established; and

(c) the Lieutenant-Governor in Council is satisfied based on the information provided by the operator or the minister that as a result of the installation of the machinery or equipment one or more of the following criteria are met:

(i) there was a change in the NAICS code for the industrial facility at the 3 digit level and the reasons for the change are valid and reasonable,

(ii) the emissions intensity of the industrial facility differs from the baseline emissions intensity of the industrial facility by at least 25% or in the case of an offshore industrial facility, the emissions level of the offshore industrial facility differs from the baseline emissions level of the offshore industrial facility by at least 25% and the change in the emissions intensity or emissions level is permanent, or

(iii) the emissions intensity of the industrial facility differs from the baseline emissions intensity of the industrial facility by less than 25% or in the case of an offshore industrial facility, the emissions level of the offshore industrial facility differs from the baseline emissions level of the offshore industrial facility by less than 25% and the change in the emissions intensity or emissions level is permanent and does not result from

(A) routine maintenance, repair or replacement of machinery or equipment, including the installation of machinery or equipment that is installed primarily to increase energy efficiency,

(B) an increase in production rate, or

(2) Where the Lieutenant-Governor in Council requests information or documentation, the information or documentation shall be provided to the Lieutenant-Governor in Council within 45 days of the request or a longer period as determined by the Lieutenant-Governor in Council.

(3) Where the Lieutenant-Governor in Council determines that a new baseline emissions intensity or baseline emissions level should be established

(a) the existing baseline emissions intensity or baseline emissions level shall continue to apply except in relation to the new machinery and equipment; and

(b) a new baseline emissions intensity or baseline emissions level shall be established in accordance with subsection 4(3) or 6(3), as applicable, in relation to the new machinery and equipment.

4. (1) Subsection 8(2) of the regulations is repealed and the following substituted:

(2) Notwithstanding subsection (1), the greenhouse gas reduction target for an industrial facility, other than a mobile offshore industrial facility, that commenced production in 2015 or a subsequent year is set out in Schedule A.

(2) Section 8 of the regulations is amended by adding immediately after subsection (2) the following:

(2.1) Notwithstanding subsection (1), the greenhouse gas reduction target for an industrial facility for which a new baseline emissions intensity or baseline emissions level was established under paragraph 6.1(3)(b) is set out in Schedule A and for the purposes of this subsection the commencement year in Schedule A shall be considered to be the year in which the new baseline emissions intensity or baseline emissions level was established.

(3) Subsection 8(4) of the regulations is repealed and the following substituted:

(4) Notwithstanding subsections (1) to (3), an industrial facility, other than a mobile offshore industrial facility, may request the approval of the Lieutenant-Governor in Council for a greenhouse gas reduction target based on a performance benchmark rather than baseline emissions intensity.

5. Subsection 9(6) of the regulations is repealed and the following substituted:

(6) Notwithstanding subsection (4), an offshore industrial facility or a mobile offshore industrial facility may use greenhouse gas reduction credits to achieve 100% of its greenhouse gas reduction target.

6. Subsection 10(2) of the regulations is repealed and the following submitted:

(2) Where an industrial facility, other than a mobile offshore industrial facility, has a greenhouse gas reduction target based on baseline emissions intensity, the number of performance credits that the minister may issue to the industrial facility for a year shall be calculated in accordance with the following formula:

PC = (RT x AP) - AE

where

PC = the number of performance credits, expressed in tonnes on a carbon dioxide equivalent basis rounded up to the nearest tonne;

RT = the industrial facility's greenhouse gas reduction target calculated in accordance with section 8;

AP = the industrial facility's actual production in a year rounded up to the nearest tonne; and

AE = the industrial facility's actual greenhouse gas emissions expressed in tonnes on a carbon dioxide equivalent basis rounded up to the nearest tonne, excluding biomass emissions and any emissions generated from a source category referred to in paragraphs 5(1)(f) to (i) of the Management of Greenhouse Gas Reporting Regulations.

(2.1) The number of performance credits that the minister may issue to a mobile offshore industrial facility for a year shall be calculated in accordance with the following formula:

PC = (RT x HO) - AE

where

PC = the number of performance credits, expressed in tonnes on a carbon dioxide equivalent basis rounded up to the nearest tonne;

RT = the mobile offshore industrial facility's greenhouse gas reduction target calculated in accordance with section 8;

HO = the mobile offshore industrial facility's hours of operation rounded up to the nearest full hour, excluding any hours where the mobile offshore industrial facility's operation relate solely to exploration drilling activities; and

7. The regulations are amended by adding immediately after section 12 the following:

PART III.1
BEST AVAILABLE CONTROL TECHNOLOGY

Best available control technology

12.1 (1) Where a person registers an industrial facility to which these regulations may apply, other than an offshore industrial facility or a mobile offshore industrial facility, in accordance with the Environmental Protection Act, the person shall, on the date the industrial facility is registered, provide information regarding best available control technology to the minister.

(2) Where a person submits a project description in accordance with legislation that requires an environmental assessment in relation to an offshore industrial facility or a mobile offshore industrial facility to which these regulations may apply, the person shall, on the date the project description is submitted, provide information regarding best available control technology to the board.

(3) Where information is provided under subsection (1) or (2), the industrial facility is required to employ best available control technology in accordance with this Part in the operation of the industrial facility.

(4) An industrial facility is considered to meet the best available control technology requirements where the Lieutenant-Governor in Council is satisfied that the combination of machinery and equipment in the industrial facility

(a) has the most effective greenhouse gas emissions control;

(b) has proven performance and reliability in comparable industrial facilities;

(d) complies with an Act or regulation relating to air pollution, occupational health and safety and fire and life safety.

(5) Notwithstanding subsection (4), where the industrial facility is an offshore industrial facility or mobile offshore industrial facility, the industrial facility is considered to meet the best available control technology requirements where the Lieutenant-Governor in Council is satisfied that the combination of machinery and equipment in the industrial facility

(a) has the most effective greenhouse gas emissions control;

(b) has proven performance and reliability in comparable industrial facilities;

(d) complies with an Act or regulation relating to air pollution, occupational health and safety and fire and life safety; and

(e) is acceptable to the board as the best available control technology for the industrial facility.

Commencement

8. These regulations are considered to have come into force on January 1, 2019.