The Alberta government will make $1.4-billion in grants and loan guarantees available to oil sands producers and other companies to help them reduce greenhouse gas emissions — and as a way of cushioning the blow as a new system of carbon dioxide for the state’s heaviest industrial emitters begins next season.
On Tuesday, the government laid out $1.4-billion in “innovation projects” intended to help Alberta companies transition into a lower-emissions world during the next seven decades. On Wednesday, it is going to announce the full details of a method to reduce emissions among large industrial manufacturers like oil sands and chemical manufacturers, coal-fired power generators, and any other facility which releases 100,000 tonnes or more of carbon dioxide equivalent annually — in a system designed to allow them to still compete on a global scale.
The stakes are high for Alberta’s NDP government. Alberta is Canada’s largest greenhouse gas emitter, but also the top producer of the nation’s oil and gas.
As the United States moves to lower corporate taxes and cut environmental regulations because of its fast growing oil and gas sector, Canadian manufacturers say they face higher prices, more rules and restricted pipeline access to global markets. In the next election, Alberta Premier Rachel Notley will confront United Conservative Party Leader Jason Kenney — who says he’d junk Alberta’s carbon taxation and other policies he argues are damaging the province’s capacity to attract investment compared with the USA and other competitors.
However, the NDP asserts their policies assist the oil-producing state adapt in a world where reduced emissions are part of the company landscape. Alberta Environment Minister Shannon Phillips stated the system is intended to safeguard the competitiveness of the state’s energy-intensive businesses, even as the state and Ottawa forge ahead with carbon dioxide.
“It is going to benefit companies that seem to reduce the carbon from the barrel or the carbon in whatever they are producing,” the minister said in an interview. “This system ensures you get credit if you make those investments and push innovation a bit further.”
Alberta implemented a carbon tax of $20 a tonne this year which will move to $30 a tonne as of Jan. 1. However, the government wanted to do something to safeguard against its biggest industries from just shifting production to other authorities with no carbon levy.
The idea now is that Alberta’s heavy emitters will be given a cache of “free” GHG emission credits, to be set by a sector emissions benchmark. Benchmarks will be set relative to high-performing industrial jobs that produce the exact same or similar products. Formerly, heavy emitters were judged based on how improved they were out of their historic performance — today, they’ll be judged against their opponents under an output-based allocation system which will be known as the Carbon Competitiveness Incentive.
The regulations will be phased in over three decades, Alberta officials told The Globe and Mail. Next year, emitters will cover half of what they would owe under the complete program, with the invoice rising to 75 percent in 2019-20 and 100 percent in 2020-21.