Policy
Discussion Paper: Regulating Commercial-Scale Geologic Carbon Storage Projects in Ontario
Regulation Number(s):
-
Instrument Type:
Policy
Bill or Act:
-
Summary of Decision:
The decision to move forward with the design of a legislative framework for commercial-scale geologic carbon storage in Ontario is intended to support emissions management, the production of low-carbon hydrogen, the transition to a low-carbon economy, preserve high-value jobs, attract investment, encourage innovation, and help Ontario businesses take advantage of federal incentives for carbon storage.
Carbon storage is new to Ontario and developing a comprehensive framework to regulate this activity would help ensure that it is done responsibly, with measures in place to safeguard people and the environment. Establishing a clear legislative and regulatory framework for this activity will be key to realizing the potential benefits and managing the potential risks associated with geologic carbon storage, including minimizing the potential for leaks to the surface or drinking water sources, induced seismicity, or interactions with other resource activities.
Ontario has been taking a measured and phased approach to enabling and regulating geologic carbon storage in Ontario.
In the first phase of Ontario's Roadmap for enabling geologic carbon storage, and following consultation on a discussion paper posted in January 2022, changes were proposed through Bill 46, the Less Red Tape, Stronger Ontario Act, 2023 to remove a prohibition on carbon storage from the Oil, Gas and Salt Resources Act. These changes received Royal Assent on March 22, 2023.
In the second phase, the government made further amendments to the Oil, Gas and Salt Resources Act to provide for 'special projects' to test, assess, pilot, or demonstrate new technologies, methods, or activities such as, but not limited to, carbon storage, and to enhance public safety. These changes received Royal Assent on June 8, 2023.
From September to October 2023, the ministry consulted on implementing a regulation to allow proponents to seek approval for special projects, including carbon storage. This regulation took effect on January 1, 2024.
In phase three, the government consulted on the development of a proposed framework for full-scale commercial carbon storage. The feedback obtained in response to this consultation, as well as lessons learned from reviewing Canadian and international jurisdictions with frameworks already in place, will be used to help to inform the design of the ministry's proposed approach to regulating commercial-scale carbon storage in Ontario.
Ontario's commercial-scale framework would focus on the regulation of carbon storage within underground geological formations. Carbon storage or sequestration activities that do not involve the use of wells to inject carbon dioxide into geological formations would not be subject to the new framework.
Carbon storage is new to Ontario and developing a comprehensive framework to regulate this activity would help ensure that it is done responsibly, with measures in place to safeguard people and the environment. Establishing a clear legislative and regulatory framework for this activity will be key to realizing the potential benefits and managing the potential risks associated with geologic carbon storage, including minimizing the potential for leaks to the surface or drinking water sources, induced seismicity, or interactions with other resource activities.
Ontario has been taking a measured and phased approach to enabling and regulating geologic carbon storage in Ontario.
In the first phase of Ontario's Roadmap for enabling geologic carbon storage, and following consultation on a discussion paper posted in January 2022, changes were proposed through Bill 46, the Less Red Tape, Stronger Ontario Act, 2023 to remove a prohibition on carbon storage from the Oil, Gas and Salt Resources Act. These changes received Royal Assent on March 22, 2023.
In the second phase, the government made further amendments to the Oil, Gas and Salt Resources Act to provide for 'special projects' to test, assess, pilot, or demonstrate new technologies, methods, or activities such as, but not limited to, carbon storage, and to enhance public safety. These changes received Royal Assent on June 8, 2023.
From September to October 2023, the ministry consulted on implementing a regulation to allow proponents to seek approval for special projects, including carbon storage. This regulation took effect on January 1, 2024.
In phase three, the government consulted on the development of a proposed framework for full-scale commercial carbon storage. The feedback obtained in response to this consultation, as well as lessons learned from reviewing Canadian and international jurisdictions with frameworks already in place, will be used to help to inform the design of the ministry's proposed approach to regulating commercial-scale carbon storage in Ontario.
Ontario's commercial-scale framework would focus on the regulation of carbon storage within underground geological formations. Carbon storage or sequestration activities that do not involve the use of wells to inject carbon dioxide into geological formations would not be subject to the new framework.
Analysis of Regulatory Impact:
There are no expected regulatory impacts associated with this decision to proceed with the design of a legislative framework for commercial-scale geologic carbon storage projects. The environmental, social, and economic consequences of this decision are expected to be neutral to positive. The development and implementation of commercial-scale carbon storage projects in Ontario has the potential to preserve or create job opportunities, particularly in the construction, operation, and maintenance of facilities and related infrastructure.
Future regulations would include requirements for financial assurance, annual fees, fees for applications, and other charges established to cover costs associated with the delivery of the framework. Where projects are proposed to use public land/resources in connection with geologic carbon storage projects, they could also be subject to charges such as lease and/or rental payments. Future regulations could seek to adopt industry standards to eliminate redundant reporting requirements and facilitate harmonization of activities with other jurisdictions.
Administrative costs associated with a commercial-scale framework would depend on the framework's final design and would be assessed during the development of associated regulations and future postings.
Future regulations would include requirements for financial assurance, annual fees, fees for applications, and other charges established to cover costs associated with the delivery of the framework. Where projects are proposed to use public land/resources in connection with geologic carbon storage projects, they could also be subject to charges such as lease and/or rental payments. Future regulations could seek to adopt industry standards to eliminate redundant reporting requirements and facilitate harmonization of activities with other jurisdictions.
Administrative costs associated with a commercial-scale framework would depend on the framework's final design and would be assessed during the development of associated regulations and future postings.
Further Information:
Link to Environmental Registry
Proposal Number:
24-MNRF005
Posting Date:
July 9, 2024
Summary of Proposal:
We are seeking feedback on the design of a regulatory framework for commercial-scale geologic carbon storage projects in Ontario that would enable the development of technology-ready commercial-scale projects and the continued testing and demonstration of newer carbon storage technologies.
Contact Address:
Effective Date:
November 25, 2024
Decision:
Approved