ON & QC: Cap and Trade Reporting Regulatory Requirements
Since 2013 in Quebec and 2016 in Ontario*, companies that bring propane into each province are required to report the volumes they have introduced, by way of importation, refining or fractionation.
These companies are subsequently required to purchase, through an auction system, carbon credits to match the emissions created by their product. At the end of each program period (currently 2017-2020 in Ontario and 2015-2017 in Quebec), participating companies must submit the appropriate number of carbon credits through the government’s compliance system.
Propane businesses that do not introduce propane into Quebec or Ontario are not required to report carbon emissions or purchase credits.
For more details and province-specific Q&A’s on the program:
Quebec: http://www.mddelcc.gouv.qc.ca/changementsclimatiques/marche-carbone_en.asp
Ontario: https://www.ontario.ca/page/cap-and-trade
Reporting, Verification & Timelines
- Reporting of volumes is due on June 1 of the following year (e.g., 2017 report will be due on June 1, 2018).
- Carbon credit auctions are held a maximum of four times each year, allowing participants to purchase credits to match the carbon emissions reported:
- In the year after a program period ends, companies are required to match their volumes reported with credits they have purchased. For example, for the program period that ends in 2020, final reporting is required in June 2021 and by November 2021 emitters will be required to have carbon credits in their compliance account that are at least equal to the total of verified greenhouse gas emissions.
- There is a requirement to have a third-party verify (audit) reported volumes.
- In September 2017, Ontario, Quebec and California signed an agreement paving the way to harmonizing and integrating their respective carbon and trade systems, beginning on January 1, 2018.
Exclusions
The following volumes do not need to be reported:
- Propane that is used as a feedstock (i.e., not as a fuel);
- Propane that is used as a fuel in marine or aviation applications;
- Propane that is subsequently supplied to a Large Final Emitter (LFE – a facility that emits more than 25,000 tonnes of carbon dioxide equivalent emissions in a year). The reporting requirement falls to that LFE, not the business that introduced the propane into the market; and
- Propane that has a final destination other than Ontario or Quebec:
- Where a company that introduced propane to Ontario or Quebec subsequently moves it to another jurisdiction, these volumes do not need to be reported.
- Where a company that introduced propane to Ontario or Quebec subsequently passes ownership to another company in the same province and that company moves it to another jurisdiction, there is a process of attestations to cancel those volumes, and any resulting charges, out of the reported volumes.
Registration
All companies that introduce propane into the province of Ontario and/or Quebec, and that are subject to cap and trade reporting requirements, must register for the Compliance Instrument Tracking System Service (CITSS) – https://www.wci-citss.org/. CITSS, a web-based program used by North American jurisdictions that have cap and trade programs, tracks emissions allowances and offset credits from time of issue by governments, to ownership, transfers, through to final retirement.
Contact Details
For general information about the Cap-and-Trade system and the carbon market:
* Although reporting was required in Ontario for 2016, the requirement to purchase matching credits did not begin until 2017.