Federal Government Proposes New Air Pollution Regulations

The federal government has proposed a major set of new air pollution regulations to reduce industrial-source air pollution, starting with performance standards for the cement sector and two equipment types: gaseous-fuel-fired non-utility boilers/ heaters and stationary spark-ignition gaseous-fuel-fired engines. The regulations would also achieve modest reductions in greenhouse gas emissions.

According to the regulatory impact statement:

“Issues: Air pollutants negatively affect human health, place a serious burden on the health care system, degrade the environment and have an adverse impact on the economy. While progress has been made in reducing some air pollutant emissions, air quality remains an ongoing issue in Canada.

Actions to manage industrial emissions currently vary across Canada, creating an uneven playing field for Canadian enterprises. Canada lacks a nationally consistent approach to reducing industrial air pollutant emissions, and it is unlikely that a base level of performance standards can be established across Canada in the absence of federal action.

Description: The Multi-sector Air Pollutants Regulations (“proposed Regulations”) would impose mandatory national performance standards on specific sector/equipment groups, in order to establish a nationally consistent emissions “floor.” Within the proposed Regulations, performance standards for the cement sector and two equipment types (i.e. gaseous-fuel-fired non-utility boilers and heaters [“boilers and heaters”], and stationary spark-ignition gaseous-fuel-fired engines [“engines”]) are included. It is expected that requirements for additional sectors/equipment groups would come forward in the near future. The performance standards impose limits on the amount of nitrogen oxides (NOx) and sulphur dioxide (SO2) that can be emitted from cement manufacturing facilities, and limits the amount of NOx that can be emitted from the two equipment types.

Cost-benefit statement: The proposed Regulations are estimated to result in a reduction of approximately 2 065 kilotonnes (kt) of NOx and 96 kt of SO2 over the 2013–2035 period. A cost-benefit analysis was conducted for each sector/ equipment group, and each of these results in net benefits. The net present value of the proposed Regulations is estimated to be $6.5 billion for engines, $1.1 billion for boilers and heaters, and $1.4 billion for cement. The benefit-to-cost ratios are 15:1 for engines, 24:1 for boilers and heaters, and 34:1 for cement.

The present value of the benefits of the proposed Regulations is estimated to be $7.0 billion for engines, $1.2 billion for boilers and heaters, and $1.5 billion for cement. These benefits largely arise from avoided environmental and health impacts (such as premature mortalities and emergency room visits). These benefits occur across Canada, and the largest share of benefits is accrued in the province of Alberta.

The present value of the costs of the proposed Regulations is estimated to be $470 million for engines, $50 million for boilers and heaters, and $43 million for cement. These costs are largely due to the incremental expense of adopting the technologies required to reduce emissions. Due to the provision of flexible compliance options, and differing requirements for new versus existing capital, virtually all capital investments involve “add-on” technologies or the purchase of lower-emitting models at the time of natural capital stock turnover, rather than early retirement of capital stock. Costs are not expected to be directly passed on to consumers given the competitive positions of the affected sectors.

“One-for-One” Rule and small business lens: The proposed Regulations are expected to result in a net increase in administrative burden. However, these costs are small relative to other costs. The requirements associated with each performance standard in the proposed Regulations are estimated to result in an annualized increase in total administrative costs to all businesses subject to the proposed Regulations of approximately $120,075 for engines, $21,135 for boilers and heaters, and $1,237 for cement.

No small businesses would be affected by the performance standards for boilers and heaters or for cement. The small business lens analysis was applied to the performance standards for engines. The application of the small business lens analysis has resulted in an option in the proposed Regulations that decreases both compliance and administrative burden for small businesses by an estimated $19,025 over the period ($1,427 per business, or $68 per business annualized). An exemption for small businesses from the requirements for original engines is being proposed by Environment Canada.

Domestic and international coordination and cooperation: The Government of Canada has extensively engaged provinces and territories during the regulatory development process in order to better understand their perspectives on the proposed Regulations and the relationship with existing actions on the industries in their jurisdiction. Provinces support the implementation of the system, seeing it as a model of effective federal/provincial cooperation where each level of government takes distinct, coordinated actions within their authorities that are mutually reinforcing.

In terms of enforcement as well as monitoring and reporting requirements, efforts have been made to minimize overlap with existing provincial requirements. The federal government remains open to pursuing equivalency agreements with interested provinces.

The proposed Regulations would enable regulatory alignment with the United States under the Canada-United States Regulatory Cooperation Council Joint Action Plan, under which both Canada and the United States will be required to have regulatory approaches in place that address emissions of particulate matter and its precursor pollutants. The proposed Regulations are also important for continued engagement with the United States on transboundary flows of air pollution through the Canada-United States Air Quality Agreement.

The implementation of the proposed Regulations is not expected to affect trade.”

List of new regulations

Air Pollutant Emissions & Greenhouse Gases (GHGs)

Proposed Regulatory Initiatives

·   Multi-Sector Air Pollutants Regulations

·   Regulations Amending the Multi-Sector Air Pollutants Regulations

·   Sectoral Greenhouse Gas Emissions Regulations

·   Order in Council in respect of Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity Regulations

·   Ozone-depleting Substances and Halocarbon Alternatives Regulations

·   Revisions to the Federal Halocarbon Regulations, 2003

·   Revisions to the Off-Road Compression Ignition Emission Regulations to Incorporate Large Spark-Ignition Engines

·   Regulations Amending the Off-Road Small Spark-Ignition Engine Emission Regulations

·   Regulations Amending the On-Road Vehicle and Engine Emission Regulations

·   Regulations Amending the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations

·   Regulations Amending the Sulphur in Gasoline Regulations


Multi-Sector Air Pollutants Regulations

Enabling Act

Canadian Environmental Protection Act, 1999 (CEPA 1999)

Description

The first phase of the proposed Multi-Sector Air Pollutants Regulations would include base-level industrial emission requirements for gaseous fuel-fired boilers and heaters, stationary spark-ignition gaseous-fuel fired engines and cement manufacturing facilities.

Business Impact Flag

There may be business impacts. The “One-for-One” Rule and/or the Small Business Lens may apply.

Consultation

Consultations with stakeholders will take place before and after publication of instruments in Canada Gazette, Part I. Timing and further details are to be determined.

Contact

Kerri Timoffee
Manager, Air Pollutant Regulatory Framework Development and Implementation
Telephone: 819-420-7751
Fax: 819-420-7383
Email: kerri.timoffee@ec.gc.ca

Regulations Amending the Multi-Sector Air Pollutants Regulations

Enabling Act

Canadian Environmental Protection Act, 1999 (CEPA 1999)

Description

The proposed amendments would set base-level industrial emission requirements for additional sectors.

Business Impact Flag

There may be business impacts. The “One-for-One” Rule and/or the Small Business Lens may apply.

Consultation

Consultations with stakeholders will take place before and after publication of instruments in Canada Gazette, Part I. Timing and further details are to be determined.

Contact

Kerri Timoffee
Manager, Air Pollutant Regulatory Framework Development and Implementation
Telephone: 819-420-7751
Fax: 819-420-7383
Email: kerri.timoffee@ec.gc.ca

Sectoral Greenhouse Gas Emissions Regulations

Enabling Act

Canadian Environmental Protection Act, 1999 (CEPA 1999)

Description

Proposed regulations are being developed as part of the government’s sector-by-sector approach to address greenhouse gas (GHG) emissions.

Business Impact Flag

There may be business impacts. The “One-for-One” Rule and/or the Small Business Lens may apply.

Consultation

Consultations with stakeholders will take place before and after publication of proposed regulations in theCanada Gazette, Part I. Timing and further details are to be determined.

Contact

Jennifer Kerr
Manager, GHG Framework Development and Implementation
Air Emissions Priorities Division
Telephone: 819-420-7758
Fax: 819-420-7383
Email:jennifer.kerr@ec.gc.ca

Order in Council in respect of Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity Regulations

Enabling Act

Canadian Environmental Protection Act, 1999 (CEPA 1999)

Description

If provinces or territories have or put in place regulations equivalent to the federal Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity Regulations, or to any other industrial greenhouse gas or industrial air pollutant regulations published by the Government of Canada, the Government has indicated its willingness to enter into equivalency agreements that would see the federal regulation stand down in jurisdictions in which the conditions under CEPA 1999 are met.

The proposed Order in Council would suspend the application of the Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity Regulations in the Province of Nova Scotia.

Business Impact Flag

There may be business impacts. The “One-for-One” Rule and/or the Small Business Lens may apply.

Consultation

Pursuant to subsection 10(4) of CEPA 1999, a notice of availability of the proposed Agreement on the Equivalency of Federal and Nova Scotia Regulations for the Control of Greenhouse Gas Emissions from Electricity Producers in Nova Scotia was published in the Canada Gazette, Part I on September 15, 2012 for a 60-day comment period.

Canadians will be consulted on the proposed Order in Council when it is published in the Canada Gazette,Part I.

Contact

Jennifer Kerr
Manager, GHG Framework Development and Implementation
Air Emissions Priorities Division
Telephone: 819-420-7758
Fax: 819-420-7383
Email:jennifer.kerr@ec.gc.ca

Ozone-depleting Substances and Halocarbon Alternatives Regulations

Enabling Act

Canadian Environmental Protection Act, 1999 (CEPA 1999)

Description

The proposed Ozone-depleting Substances and Halocarbon Alternatives Regulations would repeal and replace the current Ozone-depleting Substances Regulations, 1998.

The objectives of the proposed Regulations are to:

·   ensure consistency between Canada’s regulations and its international commitments under the Montreal Protocol;

·   introduce provisions relating to non-refillable containers for Hydrochlorofluorocarbons (HCFC) and hydrofluorocarbon (HFC) refrigerants;

·   introduce a permitting and reporting system for the production and consumption of HFCs;

·   allow for the transfer of methyl bromide among exempted uses; and

·   streamline administrative and reporting requirements.

The proposed Regulations may affect businesses in the refrigeration, air-conditioning and fire extinguishing sectors. Businesses using Methyl Bromide may also be affected.

Business Impact Flag

There may be business impacts. The “One-for-One” Rule and/or the Small Business Lens may apply.

Consultation

Electronic and face-to-face consultations took place in 2008 and 2013.

The proposed Regulations will be published in the Canada Gazette, Part I for a 75-day comment period.

Contact

Lucie Desforges
Director, Chemical Production Division
Telephone: 819-938-4209
Fax: 819-938-4218
Email: lucie.desforges@ec.gc.ca

Revisions to the Federal Halocarbon Regulations, 2003

Enabling Act

Canadian Environmental Protection Act, 1999 (CEPA 1999)

Description

The proposed revised Regulations would repeal and replace the current Federal Halocarbon Regulations, 2003.

The Regulations aim at minimizing releases of halocarbons to the environment from refrigeration and air conditioning systems. The proposed revisions would address administrative, operational and enforcement issues.

The proposed revisions would apply to systems containing halocarbons that: are owned by federal departments, boards and agencies, Crown corporations, or federal works or undertakings; or are located on federal or aboriginal lands. Some businesses in the refrigeration, air-conditioning and fire extinguishing sectors would be affected.

Business Impact Flag

There may be business impacts. The “One-for-One” Rule and/or the Small Business Lens may apply.

Consultation

Electronic and face to face public consultations took place in 2013. Additional consultations specific to the Small Business Lens and the “One-for-One” Rule will take place.

The proposed revised Regulations will be published in the Canada Gazette, Part I for a 60-day comment period.

Contact

Lucie Desforges
Director, Chemical Production Division
Telephone: 819-938-4209
Fax: 819-938-4218
Email: lucie.desforges@ec.gc.ca

Revisions to the Off-Road Compression Ignition Emission Regulationsto Incorporate Large Spark-Ignition Engines

Enabling Act

Canadian Environmental Protection Act, 1999 (CEPA 1999)

Description

The proposed revised Regulations would reduce air pollutant emissions from large spark-ignition engines used in off-road applications such as forklifts and ice resurfacers by establishing emission standards and test procedures that are aligned with those of the United States Environmental Protection Agency.

The existing Off-Road Compression-Ignition Engine Emission Regulations would be repealed and replaced by a regulation for both compression-ignition (diesel) and large spark-ignition (gasoline, propane, natural gas) engines.

The proposed revisions would affect manufacturers and importers of new large spark-ignition and compression-ignition engines and equipment.

Business Impact Flag

There may be business impacts. The “One-for-One” Rule and/or the Small Business Lens may apply.

Consultation

The proposed revised Regulations will be published in the Canada Gazette, Part I for a 75-day comment period.

Contact

Josée Lavergne
Chief, Air Pollutant Regulatory Development Section
Telephone: 819-420-8034
Fax: 819-938-4179
Email: josee.lavergne@ec.gc.ca

Regulations Amending the Off-Road Small Spark-Ignition Engine Emission Regulations

Enabling Act

Canadian Environmental Protection Act, 1999 (CEPA 1999)

Description

The existing Off-Road Small Spark-Ignition Engine Emission Regulations set air pollutant emission standards for small spark-ignition (typically gasoline) engines that were aligned with the United States (U.S.) Environmental Protection Agency’s (EPA) standards. In 2008, the U.S. EPA published new, more stringent emission standards. These proposed amendments would further reduce air pollutant emissions by aligning with the new U.S. Tier 3 standards.

The proposed amendments would affect manufacturers and importers of new small engines and equipment, such as lawn and gardening equipment.

Business Impact Flag

There may be business impacts. The “One-for-One” Rule and/or the Small Business Lens may apply.

Consultation

Environment Canada published a discussion document on the CEPA Registry in August 2012 and held pre-consultations in 2012-2013 to provide stakeholders with an early opportunity to provide input on the proposal.

The proposed amendments will be published in the Canada Gazette, Part I for a 75-day comment period.

Contact

Josée Lavergne
Chief, Air Pollutant Regulatory Development Section
Telephone: 819-420-8034
Fax: 819-938-4179
Email: josee.lavergne@ec.gc.ca

Regulations Amending the On-Road Vehicle and Engine Emission Regulations

Enabling Act

Canadian Environmental Protection Act, 1999 (CEPA 1999)

Description

The proposed amendments would establish more stringent air pollutant emission standards for new cars, light-duty trucks and smaller heavy-duty vehicles of the 2017 and later model years, in alignment withU.S. Tier 3 vehicle standards.

The proposed amendments would affect manufacturers and importers of new cars, light-duty trucks and smaller heavy-duty vehicles.

Business Impact Flag

There may be business impacts. The “One-for-One” Rule and/or the Small Business Lens may apply.

Consultation

On June 8, 2013, Environment Canada published a Notice of Intent (NOI) in the Canada Gazette, Part I to develop regulations to further limit emissions of smog-forming air pollutants from new cars and light trucks and to reduce the sulphur content of gasoline, in alignment with proposed U.S. “Tier 3″ standards. Publication of the NOI provided an opportunity to initiate early consultations with stakeholders and seek input that will be taken into account in the development of proposed regulations.

The proposed amendments will be published in Canada Gazette, Part I for a 75-day comment period.

The publication of these amendments will be concurrent with the publication of the proposed Regulations Amending the Sulphur in Gasoline Regulations.

Contact

Josée Lavergne
Chief, Air Pollutant Regulatory Development Section
Telephone: 819-420-8034
Fax: 819-938-4179
Email: josee.lavergne@ec.gc.ca

Regulations Amending the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations

Enabling Act

Canadian Environmental Protection Act, 1999 (CEPA 1999)

Description

The proposed Regulations Amending the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations, which cover model years 2017 and beyond, would build on the success of the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations which cover model years 2011 through 2016. These amended Regulations would establish progressively more stringent annual fleet average greenhouse gas (GHG) emission standards over the 2017 to 2025 model years, and are aligned with U.S. national standards.

The proposed amendments would affect manufacturers and importers of new passenger automobiles and light trucks brought into Canada for the purpose of sale.

Business Impact Flag

There may be business impacts. The “One-for-One” Rule and/or the Small Business Lens may apply.

Consultation

The proposed amendments were published in the Canada Gazette, Part I for a 75-day comment period on December 8, 2012.

Contact

Stéphane Couroux
Chief, Greenhouse Gas Regulatory Development and Marine Analysis Section
Telephone: 819-420-8020
Fax: 819-938-4197
Email: stephane.couroux@ec.gc.ca

Regulations Amending the Sulphur in Gasoline Regulations

Enabling Act

Canadian Environmental Protection Act, 1999 (CEPA 1999)

Description

The proposed amendments would establish standards to further reduce the maximum allowable sulphur content of gasoline that is produced or imported for use or sale in Canada, in alignment with U.S. Tier 3 fuel standards.

The proposed amendments would affect gasoline producers and importers.

Business Impact Flag

There may be business impacts. The “One-for-One” Rule and/or the Small Business Lens may apply.

Consultation

On June 8, 2013, Environment Canada published a Notice of Intent (NOI) in the Canada Gazette, Part I to develop regulations to further limit emissions of smog-forming air pollutants from new cars and light trucks and to reduce the sulphur content of gasoline, in alignment with proposed U.S. “Tier 3″ standards.

The proposed amendments will be published in Canada Gazette, Part I for a 75-day comment period.

The publication of these proposed amendments will be concurrent with the publication of the proposed Regulations Amending the On-Road Vehicle and Engine Emission Regulations.

Contact

Leif Stephanson
Chief, Fuels Section
Oil, Gas and Alternative Energy Division
Telephone: 819-420-7969
Fax: 819-420-7410
Email: leif.stephanson@ec.gc.ca

    By Dianne Saxe, Ontario Environmental Lawyer

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