Canada: Shifting Into (Green) Gear: BC Releases Updated Climate Change Strategy

On December 5, 2019, the BC government released the CleanBC plan, its long-awaited update to the province's climate change strategy. The CleanBC plan establishes a pathway to achieve the province's target of reducing greenhouse gas (GHG) emissions by 40% by the year 2030 (based on 2007 levels) as set out in the Climate Change Accountability Act. In 2015, BC produced approximately 62 million tonnes of carbon dioxide equivalent (CO2e). A 40% reduction below 2007 levels (i.e. 67 megatonnes or Mt) will require a reduction of 27 Mt by 2030. In terms of emissions by sector, BC's transportation sector accounts for 37%, the oil and gas sector accounts for 22% and buildings 12%. The CleanBC plan describes and quantifies measures that will eliminate approximately 75%, or 18.9 Mt, of its 2030 target. Remaining reduction initiatives will be quantified over the next 18 to 24 months.

One of the key drivers for the CleanBC plan is to accommodate the development of the LNG sector in the province. The BC government estimates that the LNG Canada project in Kitimat could add up to 3.45 Mt of carbon emissions to the province's total. One of the conditions for LNG development in BC is that it fits within the province's climate commitments.

The CleanBC plan prioritizes the following policy initiatives:

  • reducing climate pollution by shifting homes, vehicles, industry and business from fossil fuels and toward greater use of hydroelectricity and other renewable energies;
  • boosting energy efficient solutions, including zero-emission vehicles and home heat pumps; and
  • becoming a destination for new investment and industry looking to meet the growing global demand for low-carbon products, services and pollution-reducing technologies.

Highlights of the CleanBC plan include the following:

  • By 2040, every new car sold in BC will be a zero-emission vehicle (ZEV). Expected emission reductions by 2030: 1.3 Mt.
  • Providing ZEV incentives, including the creation of a new heavy-duty vehicle incentive program and the expansion of the Clean Energy Vehicle Medium/Heavy-Duty program to support the transition to ZEVs and fuels in trucking, buses, port and airport ground equipment, and marine vessels. Expected emission reductions by 2030: 0.3 Mt.
  • Increasing the low carbon fuel standard to 20% by 2030 and increasing tailpipe emissions standards for vehicles sold after 2025. Expected emission reductions by 2030: 4.4 Mt.
  • Every new building constructed in B.C. will be "net-zero energy ready" by 2032. Government will also require new buildings to be more efficient and ramp up funding for renovations and energy retrofits to existing homes and offices, including $400 million to support retrofits and upgrades for BC's stock of publicly funded housing. Expected emission reductions by 2030: 2.0 Mt.
  • Helping communities to achieve 95% organic waste diversion for agricultural, industrial, and municipal waste, including implementing systems to capture 75% of landfill gas. Expected emission reductions by 2030: 0.7 Mt.

Under the CleanBC plan, industry initiatives are expected to deliver the largest share emission reductions by 2030 – by 8.4 Mt. These initiatives include:

  • directing a portion of BC's carbon tax paid by industry into incentives for cleaner operations;
  • partnering with the Vancouver Fraser Port Authority on a Clean Trucking pilot project to reduce emissions from the short-distance hauling of goods;
  • reducing methane emissions from upstream oil and gas operations by 45% by 2025 (provincial regulations are being developed by the BC Oil and Gas Commission and are expected to be passed by 2019);
  • providing clean electricity to planned natural gas production in the Peace region;
  • increasing access to clean electricity for large operations with new transmission lines and interconnectivity to existing lines;
  • ensuring a regulatory framework for safe and effective underground CO₂ storage and direct air capture; and
  • making industrial natural gas consumption cleaner with a minimum 15% to come from renewable gas.

In addition, the BC government has announced that it is developing a CleanBC labour readiness plan to address the labour and workplace opportunities arising from the implementation of CleanBC. As a first step, the BC government is focusing on cleaner buildings and cleaner transportation by developing programs such Energy Step Code training and certification, and Certified Retrofit Professional accreditation, as well as expanding job training for electric and zero-emission vehicles.

BC's carbon pricing scheme is expected to deliver additional emission reductions of 1.8 Mt. In April 2018, BC's $30 carbon tax rate was raised to $35 per tonne, and it is set to increase by $5 every year until 2021. As the carbon price rises, the CleanBC program will offer incentives to further reduce emissions, which incentives will be funded by the carbon tax that industries pay above $30 a tonne. The program includes:

  • an Industrial Incentive that reduces carbon-tax costs for operations meeting world leading emissions benchmarks, and
  • a Clean Industry Fund that invests some industrial carbon tax revenue directly into emission reduction projects.

The incentive program and the fund will begin operating in 2019. Greenhouse gas benchmarks will be identified for key products and services in each industrial sector. The benchmarks will be based on all emission sources from a facility, including combustion, venting, flaring, fugitives, and industrial process emissions needed to compare performance across similar facilities. GHG emissions information will be audited and reported annually for all large industries in BC, and benchmarks will be reviewed and updated regularly to ensure that the province keeps pace with global technology developments. Requirements to apply for the fund will include:

  • a detailed project plan that outlines the technologies or improved processes the facility wants to implement and the amount of emissions they expect to reduce; and
  • a business case for the project with financial details, outlining the need for funding support and justifying the request for funding.

As noted above, the remaining emission reductions (representing approximately 6.1 Mt) will be achieved through initiatives identified over the next 18-24 months, including:

  • reducing and making better use of waste;
  • improving community planning, active transportation, and transit;
  • cleaner heavy-duty vehicles and freight;
  • significantly increasing industrial electrification;
  • meeting our demand for clean electricity;
  • maintaining a resilient agricultural sector; and
  • cleaner and more efficient technology.

As part of the BC government's accountability mechanism, the provincial Minister of Environment and Climate Change Strategy will report in 2020 on the new climate initiatives and BC's progress towards meetings its 2030 target.

The funding details for the CleanBC program will be unveiled in the next provincial budget on February 19, 2019. With an expected increase in electricity demand of 8% by 2030 under the CleanBC plan, observers will be looking to see how the CleanBC incentives will be funded. Whether the costs of delivering new electricity demand will be covered by taxpayers or ratepayers, the BC government's challenge will be to find the capital required to achieve the level of electrification needed to get BC to its 2030 target. Stay tuned for further developments.

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