Saskatchewan increases carbon price for large emitters to $40 per tonne

·3 min read

The Saskatchewan government has raised the carbon price for large emitters to $40/tonne, an increase from $30/tonne.

However, companies that are not compliant with emission standards won't have to settle their bill until next year.

The province says the money will be collected in October 2021 and will go into the Saskatchewan Technology Fund, which is one of three compliance funds under the province's Prairie Resilience climate change plan.

"It's there for the use of regulated emitters to lower their emissions at their facilities," said David Stevenson, director of climate change policy and programs with the Ministry of Environment. "So money comes in and they can apply for that money to come back out and make reductions at their facilities."

The province says it is not calling this price on carbon emissions a "carbon tax" because it is just one way larger industries can choose to reduce their emissions.

The other options include purchasing offset credits through a cap and trade, or meeting performance standards.

Small oil and gas companies can now opt for provincial carbon pricing

Large emitters in Saskatchewan operate under a different carbon-pricing system that exempts them from the federal carbon tax. This is because their emissions are priced under the provincial standards.

Companies that emit more than 25,000 tonnes of CO2e were already provincially regulated. However, now small upstream oil and gas companies can now choose to opt into the province's plan over the federal program.

This offers smaller companies flexibility, Stevenson said.

"While many of the oil and gas facilities are quite small, each pump for example doesn't emit much, but as an aggregate we do. So what we allowed the oil and gas sector to do is aggregate all those facilities together," Stevenson said.

According to Stevenson, there are 66 large-emitting facilities registered, along with 24 large aggregate facilities containing more than 10,000 individual facilities.

Stevenson said the government is anticipating another 200 facilities to join the program in small groupings.

"It provides that shelter from the carbon tax, and it allows for companies to make these reductions in a way that suits them best," Stevenson said. "So they can choose to either pay into a technology fund, they can choose to buy an offset credit, or they can choose to use a best performance credit if they earned one, or can buy one from someone else."

Greenhouse gas offset program delayed to 2022

The province's greenhouse gas offset program was scheduled to launch in January 2021, but the launch has been pushed back to 2022.

"With COVID we haven't been able to do the engagement with the public and stakeholders like we had planned," Stevenson said.

The program — which is still being developed — will issue offset credits for the sequestration or reduction of greenhouse gases. Those credits then could be sold to other organizations to account for their emissions.

"For example, we plan on developing an offset protocol for landfill gas emissions. So if you have a landfill and it's emitting methane, you can convert that to electricity or burn that methane off, and you can earn a credit."

The province anticipates the offset program will result in a 10 per cent reduction in emissions.