Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations (SOR/2012-167)

Carbon Capture and Storage

Temporary Exemption — System to be Constructed

Marginal note:Application

• 9 (1) A responsible person for a new unit or an old unit may apply to the Minister for a temporary exemption from the application of subsection 3(1) in respect of the unit if

  • (a) in the case of a new unit, the unit is designed to permit its integration with a carbon capture and storage system that is to be constructed; and

  • (b) in the case of an old unit, the unit may be retrofitted to permit its integration with a carbon capture and storage system that is to be constructed.

• Marginal note:Granting and content of application

  (2) The application must indicate the unit’s registration number and include the following supporting documents and information:

  • (a) a declaration that includes statements indicating that

    • (i) based on the economic feasibility study referred to in paragraph (b), the unit, when operating with an integrated carbon capture and storage system is, to the best of the responsible person’s knowledge and belief, economically viable, and

    • (ii) based on the technical feasibility study referred to in paragraph (c) and the implementation plan referred to in paragraph (e), the responsible person expects to satisfy the requirements set out in section 10 and, as a result, to be in compliance with subsection 3(1) by January 1, 2025;

  • (b) an economic feasibility study that demonstrates the economic viability of the unit when it operates with an integrated carbon capture and storage system and that

    • (i) provides project cost estimates, with their margin of error, for the construction of the integrated carbon capture and storage system, and

    • (ii) identifies the source of financing for that construction;

  • (c) a technical feasibility study that establishes — based on information referred to in Schedule 2 related to the capture, transportation and storage elements of the carbon capture and storage system — that there are no insurmountable technical barriers to carrying out the following activities:

    • (i) capturing a sufficient volume of CO₂ emissions from the combustion of fossil fuels in the unit to enable the responsible person to comply with subsection 3(1),

    • (ii) transporting the captured CO₂ emissions to suitable geological sites for storage, and

    • (iii) storing the captured CO₂ emissions in those suitable geological sites;

  • (d) a description of any work that has been done to satisfy the requirements set out in section 10, along with the information referred to in Schedule 3 with respect to that work; and

  • (e) an implementation plan that provides a description of the work to be done, with a schedule for the steps necessary to achieve the following objectives:

    • (i) satisfaction of the requirements set out in section 10, and

    • (ii) compliance of the responsible person with subsection 3(1) by January 1, 2025 when the unit is operating with an integrated carbon capture and storage system that captures CO₂ emissions from the combustion of fossil fuels in the unit in accordance with the laws of Canada or a province that regulate that capture and that transports and stores those emissions in accordance with the laws of Canada or a province, or of the United States or one of its states, that regulate that transportation or storage, as the case may be.

• Marginal note:Granting of temporary exemption

  (3) The Minister must, within 120 days after receiving the application, grant the temporary exemption if

  • (a) the application includes the documents referred to in subsection (2); and

  • (b) the information contained in those documents can reasonably be regarded as establishing that

    • (i) the unit, when operating with an integrated carbon capture and storage system, will be economically viable,

    • (ii) the capture, transportation and storage elements of the carbon capture and storage system will be technically feasible,

    • (iii) if applicable, a requirement set out in section 10 has been satisfied by work done before the application was made, and

    • (iv) the responsible person will satisfy the requirements set out in section 10 and, as a result, will be in compliance with subsection 3(1) by January 1, 2025 when the unit is operating with an integrated carbon capture and storage system.

• Marginal note:Duration

  (4) A temporary exemption, unless revoked under section 13, remains in effect until December 31, 2024.

Marginal note:Requirements

10 A responsible person who has been granted a temporary exemption in respect of a unit under subsection 9(3) must satisfy the following requirements:

• (a) carry out a front end engineering design study by January 1, 2020;

• (b) purchase any major equipment that is necessary for the capture element by January 1, 2021;

• (c) enter into any contract required for the transportation and storage of CO₂ emissions from the unit by January 1, 2022;

• (d) take all necessary steps to obtain all permits or approvals required in relation to the construction of the capture element by January 1, 2022; and

• (e) ensure that the unit, when operating with an integrated carbon capture and storage system, captures CO₂ emissions from the combustion of fossil fuels in the unit in accordance with the laws of Canada or a province that regulate that capture and transports and stores those emissions in accordance with the laws of Canada or a province, or of the United States or one of its states, that regulate that transportation or storage, as the case may be, by January 1, 2024.

Marginal note:Implementation report

• 11 (1) A responsible person who has been granted a temporary exemption in respect of a unit must, for each calendar year following the granting of the temporary exemption, provide the Minister with an implementation report that indicates the unit’s registration number and includes supporting documents that contain the following information:

  • (a) the steps taken during that year to construct the capture, transportation and storage elements of the carbon capture and storage system and to integrate those elements with the unit;

  • (b) any requirement set out in section 10 that was satisfied during that year, along with the information and documents referred to in Schedule 3;

  • (c) a description of the manner in which those steps were carried out or those requirements were satisfied;

  • (d) any changes, with respect to the information most recently provided to the Minister, to the proposed engineering design for the capture element, to the preferred transportation methods or routes or to the preferred storage sites, for the carbon capture and storage system; and

  • (e) a description of any steps necessary, with a schedule for those steps, to achieve the following objectives:

    • (i) the satisfaction of any requirements set out in section 10 that remain to be satisfied, and

    • (ii) the compliance of the responsible person with subsection 3(1) by January 1, 2025 when the unit is operating with an integrated carbon capture and storage system that captures CO₂ emissions from the combustion of fossil fuels in the unit in accordance with laws of Canada or a province that regulate that capture and transports and stores those emissions in accordance with laws of Canada or a province, or of the United States or one of its states, that regulate, as the case may be, that transportation or storage.

• Marginal note:Due date

  (2) The implementation report must be provided by March 31 of the calendar year that follows the calendar year in question.

Marginal note:Updated information

12 If any event occurs or any circumstance arises that may prejudice the ability of the responsible person to achieve an objective referred to in paragraph 11(1)(e), the responsible person must send to the Minister, without delay, a notice that indicates the unit’s registration number and contains the following information:

• (a) a description of the event or circumstance and the nature of the prejudice;

• (b) an explanation of how the prejudice is to be overcome in order to ensure that the objective will be achieved; and

• (c) in relation to that explanation, an update to any information previously provided to the Minister under paragraphs 11(1)(c) to (e), together with any necessary supporting documents.

Marginal note:Revocation — non-satisfaction or misleading information

• 13 (1) The Minister must revoke a temporary exemption granted under subsection 9(3) if

  • (a) the responsible person does not satisfy a requirement set out in section 10; or

  • (b) any information indicated or contained in the application for the temporary exemption, in an implementation report referred to in section 11 or in a notice referred to in section 12 is false or misleading.

• Marginal note:Revocation — implementation report or reasonable grounds

  (2) The Minister may revoke the temporary exemption if

  • (a) the responsible person has not provided an implementation report in accordance with section 11;

  • (b) there are reasonable grounds for the Minister to believe that the carbon capture and storage system will not operate so as to capture, transport and store CO₂ emissions as described in paragraph 10(e) by the date referred to in that paragraph; or

  • (c) there are reasonable grounds for the Minister to believe that the responsible person will not emit CO₂ from the combustion of fossil fuels in the unit in accordance with subsection 3(1) by January 1, 2025.

• Marginal note:Reasons and representations

  (3) The Minister must not revoke the temporary exemption under subsection (1) or (2) unless the Minister has provided the responsible person with

  • (a) written reasons for the proposed revocation; and

  • (b) an opportunity to be heard, by written representation, in respect of the proposed revocation.

Twenty-four Month Exemption — Existing Unit with System

Marginal note:Exemption

• 14 (1) A responsible person for an old unit may, on application made to the Minister, be exempted from the application of subsection 3(1) in respect of the old unit for a period of 24 consecutive months that begins on January 1 of the calendar year that follows the calendar year in which the application is made if the following conditions are satisfied:

  • (a) an existing unit and the old unit have a common owner who has a ownership interest of 50% or more in each of those two units;

  • (b) the production capacity of the existing unit, during the calendar year preceding the calendar year in which the application is made, was equal to or greater than the production capacity of the old unit during that preceding calendar year;

  • (c) the existing unit and the old unit are located in the same province;

  • (d) the quantity of CO₂ emissions from the combustion of fossil fuels in the existing unit is determined in accordance with a system or method referred to in subsection 20(1);

  • (e) the quantity of CO₂ emissions from the combustion of fossil fuels in the existing unit that are captured, transported and stored is determined using a direct measure of the flow of, and the concentration of CO₂ in, the emissions from that combustion of fuel;

  • (f) the emissions referred to in paragraph (e) are captured in accordance with the laws of Canada or a province that regulate that capture and are transported and stored in accordance with the laws of Canada or a province, or of the United States or one of its states, that regulate that transportation or storage, as the case may be;

  • (g) the emissions referred to in paragraph (e) are captured, transported and stored for a period of seven consecutive calendar years;

  • (h) the emissions referred to in paragraph (e) comprise at least 30% of the quantity of CO₂ emissions produced from the combustion of fossil fuels in the existing unit for each calendar year during that seven-year period; and

  • (i) the existing unit does not reach the end of its useful life during that seven-year period.

• Marginal note:Application

  (2) A responsible person for an old unit must apply for the exemption before September 1 of the calendar year preceding the calendar year for which the exemption is sought.

• Marginal note:Contents

  (3) The application must include the registration number of the old unit and of the existing unit and information, with supporting documentation, to demonstrate that

  • (a) the conditions of paragraphs (1)(a) to (f), (h) and (i) are satisfied; and

  • (b) at least 30 consecutive months of the period referred to in paragraph (1)(g) have occurred before the day on which the application is made.

• Marginal note:Granting of exemption

  (4) The Minister must, within 30 days after receiving the application, grant the exemption if

  • (a) no exemption referred to in subsection (1) has been previously granted in respect of the old unit;

  • (b) no exemption referred to in subsection (1) that involved the existing unit has been previously granted;

  • (c) the existing unit referred to in subsection (1) is not a substituted unit referred to in subsection 5(5); and

  • (d) the Minister is satisfied that the requirements set out in subsection (3) are satisfied.

• Marginal note:Obligation to capture 30% of CO₂ emissions

  (5) A responsible person who has been exempted under subsection (4) in respect of an existing unit must ensure that the conditions of paragraphs (1)(a) to (f), (h) and (i) are satisfied for the portion of the period referred to in paragraph (1)(g) that remains after the occurrence of the period of consecutive months described in paragraph (3)(b).