Yahoo Finance Alberta's industrial carbon tax to triple by 2030 to match Ottawa's minimum standards
Alberta’s tax on industrial carbon dioxide emissions will triple by 2030 in order to keep pace with the federal carbon pricing schedule, according to an order in council issued Thursday outlining sweeping changes to the province’s Technology Innovation and Emissions Reduction (TIER) program.
Alberta’s large emitters currently pay $50 per tonne of CO2 emissions. The carbon tax will increase to $65/tonne in 2023, rising by $15 each year until it reaches $170/tonne in 2030.
The hike to the carbon tax was required to bring Alberta’s carbon pricing regime into compliance with minimum federal standards or face the imposition of a federal “backstop” tax program. Ottawa indicated last month that it had reached agreements with most provinces on a consumer fuel charge and tax on large emitters including Alberta, which has some of the highest emissions in the country due to the oil and gas industry.
Maintaining Alberta’s 15-year-old TIER system, even with the escalating tax on carbon, was the right thing to do for businesses that have already booked the higher costs on their balance sheets, said Alberta Minister of Environment Sonya Savage in an interview.
“This is good news for the province,” Savage said. “We’re keeping the emissions trading system and carbon pricing system for industrial heavy emitters in Alberta, which enables the offset market and credit market and it’s what industry wanted us to do.”
The renewal of TIER has tightened some requirements and created a new sequestration credit for companies that implement carbon capture, utilization and storage technology.
Companies will be permitted to convert sequestration credits into something called a “capture recognition tonne.” These can be used by facilities that capture CO2 to reduce their regulated emissions in that year by the amount of capture recognition tonnes they convert, according to the province.
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“This creates direct value for the capture site that is less dependent on the credit market,” a spokesperson for Alberta Environment and Protected Areas said in an email.
The changes will also escalate the amount of emissions offsets, credits or sequestration credits that can be used by emitters to meet obligations under TIER regulations.
• Email: mpotkins@postmedia.com | Twitter: mpotkins
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