Large industrial facilities—over 100 regulated facilities in 17 industrial sectors—generate 50 per cent of Alberta’s greenhouse gas emissions. The Department of Environment and Parks (AEP) regulates these facilities under the Technology Innovation and Emissions Reduction Regulation by setting limits on the emissions facility operators can emit annually. The regulation is a key element in Alberta’s efforts to reduce emissions.
To comply with the limits, facilities can reduce emissions by implementing operational improvements. If the emissions exceed the limit, facility operators can:
- pay into the Technology Innovation and Emissions Reduction Fund
- buy emission offsets
- use emission performance credits
We have audited AEP’s processes to regulate the facilities three times since 2009 and found deficiencies. In this audit, we found AEP has corrected the deficiencies, with one exception. AEP still lacks assurance emission offsets from conservation cropping are valid.
Because AEP is eliminating emission offsets from conservation cropping after 2021, we are not repeating our previous recommendation. However, AEP should still correct the deficiencies and reduce the risk and possible financial impact from invalid offsets.
Since 2007, facilities have paid $230 million for 14 million tonnes of offsets from conservation cropping to meet their emission limits.61 If a significant volume of these offsets is invalid, Alberta’s efforts to reduce emissions will be diminished.
AEP did not implement our recommendation to:
- clarify its guidance to facilities, verifiers, offset project developers, and offset protocol developers so they consistently follow requirements
AEP remedied all deficiencies we identified previously, except for the issue of conservation cropping offsets. However, as AEP is eliminating the conservation cropping offsets effective December 31, 2021, we are not repeating our recommendation in this report.
AEP implemented our recommendations to:
- set up processes to ensure that all approved protocols comply with government requirements
- obtain assurance that data hosted and processed by the Registry provider is accurate, complete and secure