Regulation - LGIC

Making Polluters Accountable: Industrial Emission Performance Standards

Regulation Number(s):
Environmental Protection Act, R.S.O. 1990
Instrument Type:
Regulation - LGIC
Bill or Act:
Environmental Protection Act
Summary of Decision:
We are proceeding with Ontario's Emissions Performance Standard (EPS), a key part of the government's Made in Ontario Environment Plan, to ensure polluters pay their fair share for their greenhouse gas (GHG) emissions, while also ensuring industry continues to make advances to help Ontario achieve its share of Canada's 2030 target. EPS are part of Ontario's commitment in Preserving and Protecting our Environment for Future Generations to regulate industrial emissions. This Made-in-Ontario alternative to the federal OBPS will ensure that polluters are held accountable for their actions with a system that is tough but fair, cost-effective and flexible.

Ontario's Environment Plan includes the development of EPS to:
- encourage the industrial sector to reduce GHG emissions
- maintain competitiveness of Ontario businesses
- minimize carbon leakage - the risk of production leaving the province for other jurisdictions with less stringent climate policies.

Ontario's system includes flexible compliance mechanisms that include receiving compliance units as an incentive for performing better than the standard, or payments to purchase compliance units from the government. We are proceeding with Ontario's Greenhouse Gas Emissions Performance Standard and amendments to the Greenhouse Gas, Quantification, Reporting and Verification regulation (O. Reg. 390/18).

The EPS program establishes limits on GHG emissions with complementary amendments to the Reporting Regulation. Covered facilities are required to acquire compliance units if the limits are not met. The compliance obligation will apply for the first time in the year the federal government removes Ontario from Part 2 of Schedule 1 of the Greenhouse Gas Pollution Pricing Act (GGPPA). Only the registration provisions of the EPS regulation currently apply. Other key provisions (e.g. performance standards, sales of compliance instruments) will not apply until Ontario is removed from Part 2 of Schedule 1
Analysis of Regulatory Impact:
The estimated costs of the proposed Emission Performance Standards regulation are expected to be lower than costs imposed by the federal output-based performance standard.

The incremental administrative costs for covered facilities are estimated to be approximately $200,000 in 2019.
Further Information:
Proposal Number:
Posting Date:
February 12, 2019
Summary of Proposal:
On November 29, 2018, Ontario released for public consultation its Environment Plan, including the climate change plan component, which proposes the development of Emission Performance Standards (EPS) to encourage reductions in greenhouse gas emissions from the industrial sector while maintaining competitiveness of Ontario businesses and minimizing carbon leakage.

Ontario is considering flexible compliance mechanisms that would include providing compliance units for performing better than the standard, or for voluntary emission reductions by others, or for payments to government for excess emissions.

Any payments we collect under the program could contribute to a greenhouse gas (GHG) fund focused on supporting industry in greenhouse gas emission reductions.

Implementing an Ontario EPS will provide flexibility for Ontario circumstances as an alternative to the federal output based pricing system (OBPS) portion of the federal Greenhouse Gas Pollution Pricing Act.

This proposal seeks feedback on Ontario's EPS approach for industrial sector.
Contact Address:
Effective Date:
July 4, 2019