Carbon Pricing in Alberta
Climate Change is a central issue for businesses. Mitigating and adapting to its effects is causing far-reaching transitions in sectors such as energy, land and agriculture, banking and finance, infrastructure, transport and industry. As a result, we are seeing provincial and national attempts to price greenhouse gases (GHGs) such as Carbon Dioxide.[i] These pricing mechanisms and their laws will impact businesses resulting in both opportunities and challenges. It is increasingly valuable for any business looking to work directly or indirectly with natural resources to understand carbon pricing. This is especially the case in Alberta.
Carbon Pricing in Alberta
1. Alberta’s Technology Innovation and Emissions Reductions (TIER) Regulation[ii]
The TIER regulation came into force on January 1, 2020 and applies to facilities that emitted 100,000 tonnes of CO2e or more per year of greenhouse gases (GHGs) in 2016, or a subsequent year.[iii]
As a start-up or small business involved in the natural resources sector, you may be thinking the scope of TIER does not apply to you. However, a facility with less than emitted less than 100,000 tonnes of CO2e may be eligible to opt-in to the TIER if it competes against a facility regulated under the TIER regulation or emits 10,000 tonnes of CO2e or more per year and belongs to a sector with high emissions intensity and trade exposure.[iv]
2. Why Opt-in? Benefits of being regulated:
By opting in, facilities may apply to become exempt from the application of the federal Greenhouse Gas Pollution Pricing Act (GGPPA) for fuels whose emissions are included in their site reporting. Currently, the GGPPA charge applies to fossil fuels used in Alberta, including those in the conventional oil and gas sector. However, the GGPPA includes provisions to exempt facilities subject to provincial policies that meet the federal benchmark criteria.[v] TIER meets federal requirements and therefore can protect regulated facilities from full costs of complying with the GGPPA, while achieving emissions reductions that is cost-efficient and tailored to Alberta’ industries/ priorities.
3. How to Opt-in?
a. Opt-in key dates[vi]:
There are two pathways for a facility with emissions fewer than 100,000 tonnes of CO2e per year to opt-in to TIER:
Carbon Pricing in Canada is evolving. There are current constitutional challenges against the federal GGPPA which may impact what rules apply to your business. Additionally, consider that while TIER is the current carbon pricing regime in Alberta you may be subject to the GGPPA if you fail to opt-in.
It is beneficial to understand the applicable rules on carbon pricing. There are legal and business implications depending on what rules you are subject to. For more information on carbon pricing obligations and your business, it’s a good idea to consult with a qualified lawyer.
For more information on TIER and how it works, visit:
For more information on the GGPPA and how it works, visit:
Bradley Mills is a member of the BLG Business Venture Clinic and is a third-year law student at the Faculty of Law, University of Calgary.
[i] Norton Rose Fulbright, “Climate change and Canadian federalism: examining the constitutional dispute sparked by Parliament’s Greenhouse Gas Pollution Pricing Act”, online at: <https://www.nortonrosefulbright.com/-/media/files/nrf/nrfweb/knowledge-pdfs/climate-change-and-canadian-federalism.pdf?la=en-ca&revision=>
[ii] Technology Innovation and Emissions Reduction Regulation, 2002, (Alberta) online at: <http://www.qp.alberta.ca/1266.cfm?page=2019_133.cfm&leg_type=Regs&isbncln>
[iii] Government of Alberta, “Technology Innovation and Emissions Reduction Regulation, Information for industry on Alberta’s approach to reduce emissions from large industrial emitters”, online at: <https://www.alberta.ca/technology-innovation-and-emissions-reduction-regulation.aspx>
[v] Government of Alberta, “TIER Regulation Fact Sheet”, online at: <https://www.alberta.ca/assets/documents/ep-fact-sheet-tier-regulation.pdf>
[vi] Government of Alberta, “TIER Opt-In Fact Sheet”, online at: https://www.alberta.ca/assets/documents/ep-fact-sheet-tier-opt-in.pdf
Blog posts are by students at the Business Venture Clinic. Student bios appear under each post.