On January 1, 2023 Alberta implemented amendments to the Technology Innovation and Emission Reduction (TIER) regulation that were informed from stakeholder engagement which occurred from June to August 2022. The TIER regulation amendments build on Alberta’s 20-year record of leadership on provincial climate policy and will ensure that Alberta’s communities, businesses, industries and Indigenous peoples are set up for success and ready to take advantage of emerging opportunities.
On January 23, 2023, the Government of Alberta hosted a general information session to provide more details on the regulatory changes. Below is a summary of the key highlights from the webinar. Should you have any questions about how your organization will be impacted by the changes, please reach out to us and our team will be happy to assist you.
Goal: To bring TIER in line with minimum federal standards to aid in the continuation of the provincial emissions trading and carbon pricing system in Alberta
Effective date: Applies to 2023 compliance year onward
3 key points
Opt-in threshold
Currently: Opt-in threshold for Emissions-Intensive and Trade Exposed (EITE) industry for facilities emitting over 10,000 tonnes CO2e/year
Update: Opt-in threshold reduced to 2,000 tonnes CO2e per year for an EITE sector
Emissions coverage
Emissions coverage will expand in the conventional oil and gas sector to include emissions from flaring
Benchmarks
Currently: Facility-Specific Benchmarks (FSB) are reduced using a rate of 1% per year with exception of industrial process emissions and emissions associated with electricity used. There is no tightening rate to sector-specific, High-Performance Benchmarks (HPBs)
Update: Reduce FSBs and HPBs at a rate of 2% per year. Situ tightening subject to extra 2% tightening in 2029 and 2030. Oil sands mining and upgrading beginning at a different point and also have extra 2% in 2029 and 2030
Credit generation for CCUS: 2 new credit classes
Sequestration credit (SC): created by converting an emission offset for carbon sequestration. Treated similar to Emission Performance Credits (EPCs) in that they may be banked, traded and used to meet compliance obligations
Capture recognition tonne (CRT): Created by converting a sequestration credit. Enables large emitters and opt-in facilities to reduce sequestered emissions from their total regulated emissions at carbon capture sites. CRTs are unique in that they may only be used in the year they are created, cannot be banked or traded, and are deducted directly from total regulated emissions (therefore not subject to the credit use limit)
Cost containment program
Cost containment program under TIER remains and eligibility requirements stay the same but have been updated:
Provides two types of support for eligible facilities:
Year | BCCA Fraction |
0 | 1.00 |
1 | 1.00 |
2 | 0.75 |
3 | 0.50 |
4 | 0.25 |
Negative emissions allocations
Previously, allowable emissions could not be less than 0. Facilities were determined to have negative allowable emissions based on their allocation rates. The update enables facilities to receive negative allowable emissions. This may be necessary for facilities that import heat or hydrogen to generate electricity or for LFE/opt-in facilities that import CO2 for on-site sequestration.
Hydrogen import threshold
The regulation now includes the hydrogen import threshold of 10,000 tonnes per year which trigger mandator regulation of the facility as a large emitter.
Updated Global Warming Potentials
Species | Previous GWP | Revised GWP |
CO2 | 1 | 1 |
CH4 |
25 | 28 |
N2O | 295 | 265 |
Compliance and reporting due dates
Item | Previous due date | New due date |
Annual Forecasting Report | March 31 | March 15 |
Request for new Aggregate designation | December 1 of the preceding year | November 15 of the effective year |
Amendment(s) to existing Aggregate | December 1 of the effective year | November 15 of the effective year |
Conversion of Sequestration Credits to capture Recognition Tonnes | N/A | Between January 1 and May 31 of the year following the capture |
Credit use limit
Year | Credit use limit |
2023 | 60% |
2024 | 70% |
2024 | 80% |
2025 | 90% |
2026 | 90% |
2027 | 90% |
2028 | 90% |
2029 | 90% |
2030 | 90% |
Electricity grid displacement factor
Currently: grid factor reflects the greenhouse gas emission intensity of the marginal MWh in Alberta’s electricity generation and is used in the calculation for generating offsets under TIER.
2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | |
Electricity benchmark (tCO2e/MWH) | 0.3700 | 0.3626 | 0.3552 | 0.3478 | 0.3404 | 0.3330 | 0.3256 | 0.3182 | 0.3108 |
EGDF (tCO2e/MWh) | 0.53 | 0.52 | 0.4901 | 0.4602 | 0.4303 | 0.4005 | 0.3706 | 0.3407 | Matches HPB onward |
Offset project reporting period
Vintage year | Pre-2022 | 2022 | 2023+ |
Reporting period | No max length | No max length | 2 years maximum |
Report due | December 1, 2023 | December 1, 2024 | 6 months after end of reporting period |
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