Technological advancement and innovation are critical to achieving significant, long-term reductions in greenhouse gas emissions. New technologies, both under development and ready for deployment, provide a means to transform Canada’s industrial production and thereby significantly reduce emissions.
In order to meet part of their regulatory obligations to reduce greenhouse gases, companies will be able to contribute to a technology fund that will deliver reductions across industry and regions, now and in the future. This fund will provide more than just a compliance mechanism; it will act as an important means of promoting both the development and deployment of technologies that reduce emissions of greenhouse gases across industry.
How will the fund be used?
The fund will be used primarily to finance investments in technology and infrastructure deployment that have a high likelihood of resulting in greenhouse gas emission reductions soon. For example, carbon capture and storage – whereby carbon dioxide is stored underground – is one of the most promising technologies for reducing emissions to the atmosphere of greenhouse gas associated with a broad array of industrial activities.
Companies could contribute to the fund at a rate of $15 per tonne of carbon dioxide equivalent from 2010 to 2012, and $20 per tonne in 2013. Thereafter, the rate will escalate yearly at the rate of growth of nominal GDP. This rate structure will be reviewed every five years as part of the general review of the regulatory system.
Contributions to the fund will be capped at 70% of the total emission reductions in 2010, falling to 65% in 2011, 60% in 2012, 55% in 2013, 50% in 2014, 40% in 2015, 10% in 2016, and 10% in 2017. Companies will no longer be able to contribute to the fund as of 2018.
The Government will also explore the option of providing credits for certified project investments by individual companies in a transformative technology to reduce future emissions. Criteria for such investments would be set by Government in consultation with industry and other experts.
A smaller component of the fund, equivalent to 5 Mt per year, will help finance projects contributing to the development of new technologies that have the potential for significant reductions in the medium to longer term. Examples include emerging clean energy technologies.
How would it work?
An independent, third-party entity will administer the fund. Its board of directors will include industry experts, federal and provincial representatives, independent environmental experts.
The exact process for determining the allocation of funding to projects and the administration of the funds will be further developed in the coming months. However, a confirmed guiding principle of the fund is that it will not be used as a mechanism for the inter-regional transfer of wealth and resources. Moreover, provincial technology funds may be accredited as compliant as long as they meet federal requirements.
- Date Modified: