Assessor Training - Canadian GHG Regulations Webinar September 12, 2013

1. Assessor Training - Canadian GHG Regulations Webinar September 12, 2013

2. Agenda

3. Questions / comments before we start?

4. Canadian Overview • BC, ON and QC (as well as other provinces like AB, SK, NS) all at different stages with GHG regs • Key context: • Numerous past failed federal level attempts at national GHG cap & trade regulations • Mandatory federal GHG reporting has been in place for a number of years (originally 100 kt threshold, lowered to 50 kt) • Federal government now taking a sector-based approach • Coal power generation regs (done) • Oil & gas (next) • Others being developed: natural gas power generation, chemicals, fertilizers, etc.

5. Jurisdictional Overview

6. Jurisdictional Overview • Threat of further federally-imposed GHG regs is driving provincial action • Provinces want to establish equivalency agreements with federal government • Allows for provinces to maintain control if provincial regs are equivalent to federal one • Results in a more piecemeal approach • Today’s session: focus not on cap & trade, but stakes get higher re reporting and verification as systems move towards cap & trade

7. Key References-Reporting &Verification • BC: • B.C. Reg. 272/2009 • http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/272_2009#part4 • 2011 and 2012 Amended WCI Quantification Methods • http://www.env.gov.bc.ca/cas/mitigation/ggrcta/pdf/Final-Essential-Requirements-of-Mandatory-Reporting--Dec-17-2010.pdf • http://www.env.gov.bc.ca/cas/mitigation/ggrcta/pdf/Final-Essential-Requirements-of-Mandatory-Reporting--Dec-17-2010.pdf

8. Key References-Reporting &Verification • BC (cont’d) • Verification Guidance Document • http://www.env.gov.bc.ca/cas/mitigation/ggrcta/reporting-regulation/pdf/BC%20Reporting%20Regulation%20Verification%20Guidance%20Final%20V2.1%20Oct%202012.pdf

9. Key References-Reporting &Verification • Ontario • O.Reg. 452/09 • http://www.e-laws.gov.on.ca/html/source/regs/english/2009/elaws_src_regs_r09452_e.htm#BK10 • Guideline for Greenhouse Gas Emissions Reporting – Feb 2012 version • http://www.ene.gov.on.ca/stdprodconsume/groups/lr/@ene/@category/@climatechange/documents/resource/stdprod_093431.pdf

10. Key References-Reporting &Verification • Quebec • Q-2, r.15 Reporting Reg • http://www2.publicationsduquebec.gouv.qc.ca/dynamicSearch/telecharge.php?type=2&file=/Q_2/Q2R15_A.HTM • Q-2, r.46.1 Cap & Trade Reg • http://www2.publicationsduquebec.gouv.qc.ca/dynamicSearch/telecharge.php?type=3&file=/Q_2/Q2R46_1_A.HTM

11. Key References-Reporting &Verification • Alberta • Statutes of Alberta, 2003 Chapter C-16.7. Climate Change and Emissions Management Act • http://www.qp.alberta.ca/1266.cfm?page=C16P7.cfm&leg_type=Acts&isbncln=9780779773718 • Alberta Regulation 139/2007. Specified Gas Emitters Regulation • http://www.qp.alberta.ca/1266.cfm?page=2007_139.cfm&leg_type=Regs&isbncln=9780779772377 • Alberta Regulation 251/2004. Specified Gas Reporting Regulation • http://www.qp.alberta.ca/1266.cfm?page=2004_251.cfm&leg_type=Regs&isbncln=9780779748631

12. Key References-Reporting &Verification • Alberta (cont’d) • Offset Credit System Protocols and Project Guidance documents including verification report template and Verification Guidance document • http://environment.alberta.ca/02275.html • Compliance Information for Industry (includes technical guidance for completing baseline emissions intensity application, specified gas compliance reporting form, etc.) • http://environment.alberta.ca/01086.html

13. Reporting Requirements in BC, ON, QC

14. Overview • Various similarities between approaches: • None of the programs use ISO 14064-1 • Instead, they provide their own prescriptive reporting requirements, operational boundaries, quantification methods, etc. • All quantification methods are aligned with and structured similarly to the WCI “Final Essential Requirements of Mandatory Reporting” methodology documents • Also various differences

15. Reporting and Verification Thresholds * Threshold for fuel distributors is 25 kt ** Verification required only for those activities covered by Quebec’s cap and trade regulation, which is slightly narrower in scope than the reporting regulation. • Note: focus today is on reporters that must be verified, not those under the verification thresholds

16. Covered Facilities / Activities • Single Facility vs. Linear Facility • All jurisdictions include requirements related to single facilities • BC and QC also include “linear facilities”, where for specific types of activities a number of similar individual sites / activities are combined into a single reporting entity (e.g. for threshold purposes) • QC also has special categories for: • Electricity imported from outside QC • Fuel distribution

17. Covered Facilities / Activities • Types of Activities • The Regulations are very prescriptive with respect to what types of operations / activities must report • Considerable overlap between the three jurisdictions • There are differences, however – these are outlined in the following slides (activities included in all three systems are not identified).

18. Differences - Single Facilities / Activities *Reporting only, no verification

19. Differences - Single Facilities / Activities *Reporting only, no verification

20. Differences - Linear Facilities / Activities **special sources where purchaser / distributor is on the hook for indirect GHG emissions (generation emissions for imported electricity; end user fuel combustion for fuel distribution)

21. Quantification Methodologies • Very prescriptive • Simplifies the reporting and verification process considerably vs. other programs / jurisdiction (e.g. Alberta, voluntary programs). • Flip-side: Reporters and verifiers need to know the applicable requirements inside and out, rather than considering more general ISO 14064-1 criteria or AB SGER-style methodological requirements when developing / assessing approaches, methods, etc.

22. Quantification Methodologies • All methods structured in a similar 5-part way: • Covered sources / source definition • General description of what activities are covered by the method • GHG reporting requirements • Specific information (e.g. types of emissions, levels of consumption and production, etc.) that must be reported

23. Quantification Methodologies • Calculation methods for GHGs • Specific equations to use, often with different options provided depending on type of source, data available, etc. • Sampling, analysis and measurement requirements • Specific schedules, approaches, standards (e.g. ASTM standards), calibration, etc. • Methods for estimating missing data

24. Example: Stationary Combustion (QC) QC.1.1 Covered Sources • “boilers, combustion turbines, engines, incinerators, process heaters, acid gas scrubbing equipment, portable equipment, and any other stationary combustion unit for which this Schedule prescribes no specific requirements” • Excludes emergency equipment

25. Example: Stationary Combustion (QC) QC.1.2 GHG Reporting Requirements • Report total CO2, CH4, N2O (including biomass) • Report GHGs by fuel type (excluding CO2 from biomass) • Report annual consumption of each type of fuel, in the units specified • Report carbon content, molecular weight, and/or HHV by fuel type, if used to calculate CO2 emissions

26. Example: Stationary Combustion (QC) QC.1.2 GHG Reporting Requirements (con’t) • For units burning biomass or MSW, report annual steam generation if used to calculate emissions • For acid gas scrubbing equipment for fluidized bed boilers, report amount of sorbent used in tonnes • Report CO2 attributable to acid gas scrubbing equipment for fluidized bed boilers • Report the number of times that methods for estimating missing data were used

27. Example: Stationary Combustion (QC) QC.1.3. Calculation methods for CO2 • 5 options specified in detail

28. Example: Stationary Combustion (QC) QC.1.3. Calculation methods for CO2 (cont’d) • Additional mandatory method for acid gas scrubbing equipment for fluidized bed boilers • Exemption for fuels not included in default tables in the reg if CO2 emissions not > 0.5% total emissions

29. Example: Stationary Combustion (QC) QC.1.4. Calculation methods for CH4 and N2O • Exempt if fuel not in default tables in the Reg • 5 options specified in detail • won’t be reviewing them here

30. Example: Stationary Combustion (QC) • QC.1.5. Sampling, analysis and measurement requirements • Long list of approved general sources for analysis methods (ASTM, CEAEQ, Environment Canada, USEPA, etc.) • Requirements re frequency of sampling (annually, semi-annually, quarterly, monthly, etc.), depending on fuel type • Requirements for calculating fuel consumption • Requirements for establishing emission factors, HHV, carbon content, MW, molar fraction

31. Example: Stationary Combustion (QC) QC.1.6. Methods for estimating missing data • Specific methods for filling data gaps, depending on calculation method and type of missing data • More general requirements when the missing data concern stack gas flow rate, fuel consumption or the quantity of sorbent used • “replacement data must be estimated on the basis of all the data relating to the processes used”

32. Example: Stationary Combustion (QC) • In Summary • Very prescriptive • Very little room for reporter discretion (other than choosing from defined options) • Lots of little details

33. Quantification Methodologies • All methodologies are generally consistent with WCI requirements (and by extension each other), at least where they overlap • There are differences in the details, though • The methodologies cover hundreds of (dense) pages, so a detailed comparison is beyond the scope of this webinar!

34. Quantification Methodologies • BC (WCI) and ON are most obviously very similar upon quick visual inspection • QC has made more adjustments in their reporting Reg to text, formatting, requirements from the WCI methods • Plus they are embedded in the Reg itself, rather than in a separate methodology document

35. Quantification Methodologies • Generally speaking, material differences are most common in the GHG Reporting Requirements section • E.g. ferroalloy production: • ON and BC require reporting of CO2 only; Quebec (and WCI rules) require CO2 and CH4 • E.g. stationary combustion: • ON and BC (and WCI rules) require reporting of as gas volumes in m3; QC requires reporting in e3m3

36. Quantification Methodologies • Calculation methods (formula, etc.), sampling, etc. appear to be fairly consistent, even if there are minor typographical changes • That said, a VB should not assume they are the same between jurisdictions – they need to understand the details of each jurisdiction and there are differences in the details!

37. Verification Requirements in BC, ON, QC

38. Overview • Verification requirements quite similar between the three jurisdictions: • ISO 14065 accreditation by IAF member • Reasonable level of assurance • 5% materiality threshold • 25 kt verification threshold • Generally default to the ISO 14065 and 14064-3 requirements • There are some differences / areas where additional requirements are specified

39. Verification Body Accreditation • No mention of needing to be accredited to a relevant scope in any of the Regs • Ontario provides guidance that it expects that a verification in a new scope will be conducted as part of a scope extension • Default to ANSI accreditation / ISO 14065 restrictions • For 2012 and 2013 reporting years, QC allows verification by applicants for accreditation • Must gain accreditation by end of the year that a verification report is submitted (i.e. end of 2014 for the 2013 reporting year.

40. Scope of Verification • Varies somewhat between the Regs as they are prescriptive in terms of what activities are in-scope, and in some cases what emission sources must be verified. E.g.: • no verification of CO2 from biomass in ON or QC, but required in BC for non-woody biomass (though not used for determining if reporting threshold exceeded) • In QC some exclusions expire after 2014 reporting year, e.g.: • CH4 in petroleum refining, CH4 and N2O from anaerobic wastewater treatment, etc.

41. Scope of Verification - Requirements • ON: • Reporting Reg s.2, s.10.(2) • BC: • Reporting Reg Schedule A • QC: • Reporting Reg s.6.6, with reference to Cap & Trade Reg s.2

42. Impartiality / COI Assessment • Ontario – mandatory form • BC – optional form • QC – no form

43. Impartiality / COI - Prohibitions • Additional QC Requirements: • Team members not employed by reporter in past 3 years; • team members and close family: no personal ties to reporter **guidance is provided by BC government on this outside the Reg

44. Site Visits • BC and QC Regs reference the need to ensure representative sampling for linear facilities, and VB’s must conduct sufficient site visits to achieve level of assurance as per standard

45. Verification Statement & Reports

46. Verifier Record Keeping

47. Reporting and Verification timelines in BC, ON, QC

48. ON Timelines – 2013 Reporting Year Verify GHG Report (can start sooner) Operate Facility and Collect 2012 GHG Data Prepare GHG Report Sep 1, 2014 Jun 1, 2014 Dec 31, 2013 Jan 1, 2013 GHG Report Deadline Verification Statement Deadline

49. QC Timelines – 2013 Reporting Year Operate Facility and Collect 2012 GHG Data Prepare GHG Report and Verify Jun 1, 2014 Dec 31, 2013 Jan 1, 2013 GHG Report AND Verification Statement Deadline

50. BC Timelines – 2013 Reporting Year Operate Facility and Collect 2012 GHG Data Prepare GHG Report and Verify Mar 31, 2014 Dec 31, 2013 Jan 1, 2013 GHG Report AND Verification Statement Deadline Site visits may be conducted in the Fall