Tech and innovation keep industries competitive

Minister Nixon announces Alberta’s TIER regulation and proposed legislation alongside industry supporters.

If passed, Bill 19 would pave the way for the new Technology Innovation and Emissions Reduction (TIER) system. TIER, the centrepiece of government’s upcoming climate strategy, is an improved system to help energy-intensive facilities find innovative ways to reduce emissions and invest in clean technology to stay competitive and save money.

TIER is a unique solution that allows the province to reduce emissions without interference from Ottawa. TIER also builds on Alberta’s 20-year record of taking action to manage emissions.

“Industry has made it clear they don’t want Ottawa dictating carbon pricing in Alberta. We’re standing up for Alberta’s job creators, like oil and gas, by bringing forward TIER, which is a sensible, innovative approach to reducing emissions and protecting our shared environment. The system will help industries create emissions-reducing technologies and solutions that keep businesses competitive without the need for nickelling and diming Alberta families.”

Jason Nixon, Minister of Environment and Parks

TIER requires electricity generators to meet a “good-as-best-gas” benchmark, where their emissions are equal to the cleanest natural gas-fired generation plant. All other facilities that emit more than 100,000 tonnes of carbon dioxide must reduce their emissions by 10 per cent in 2020. Facilities will need to reduce emissions by an additional one per cent every year after 2020.

“Alberta’s energy sector has the highest social, environmental and labour standards in the world. According to government analysis, oil sands emissions intensity decreased by 19 per cent between 2011 and 2017. This is due, in part, to world-leading innovation that is being developed right here in our province. The TIER program will accelerate this innovation and ensure our oil and gas industry continues to foster further investment and, most importantly, create jobs for Albertans.”

Sonya Savage, Minister of Energy

To meet the TIER requirements, facilities can reduce their emissions or:

  • Use credits from facilities that have met and exceeded their emissions targets.
  • Use emission offsets from organizations that are not regulated by TIER, but have voluntarily reduced their emissions.
  • Pay into the TIER Fund at $30 per tonne of carbon dioxide. Bill 19 would create the TIER Fund, which would support innovative and cleaner Alberta-based technologies. A portion of the fund would also go toward operations for the Canadian Energy Centre and help reduce the provincial deficit, as outlined in Budget 2019.

“The world needs new technologies to meet its ambitious environmental and economic goals. Our province has a long history of investing in innovation, and TIER will enable Alberta to accelerate technologies that can reduce greenhouse gases, improve competitiveness and attract investment. These clean technology innovations help us grow Alberta’s existing industries, create new business opportunities and export the solutions the world needs.”

Steve MacDonald, CEO, Emissions Reduction Alberta

“Alberta’s oil and gas industry is looking – above all – for certainty, when it comes to the province’s emissions-reduction regulations. We applaud the Government of Alberta for crafting a policy that effectively protects our shared environment while boosting confidence for job creators in our world-class energy industries.”

Tim McMillan, president and CEO, Canadian Association of Petroleum Producers

TIER will protect small and medium industrial oil and gas facilities from the federal carbon price by allowing them to opt in to the TIER regulation. This will reduce costs for industry and help businesses stay competitive while reducing emissions.

TIER will also reward high-performing facilities that have implemented emissions-reducing technologies by helping them reduce costs or generate Emissions Performance Credits (EPCs). Regulated facilities that are able to beat their emissions-reduction target under TIER can generate EPCs, which can then be banked for future use or sold to other regulated facilities that have not met their emissions-reduction requirements.

“The cement industry was pleased to be part of an open collaboration for the TIER program. TIER will help industries invest in pioneering technologies and solutions that reduce emissions and understand the province’s position as an economic driver for Canada. This program builds on a legacy of climate leadership in the province, and we are very proud to have been a part of it.”

Michael McSweeney, president and CEO, Cement Association of Canada

Quick facts

  • Government conducted a comprehensive engagement process in summer 2019 to help create the TIER regulation. Engagement included ministerial-led roundtable discussions with facilities, webinars, workshops, one-on-one meetings and an online discussion document that received input from more than 175 stakeholders.
  • Large industries account for more than half of Alberta’s emissions. Now that the TIER system has been developed, government will seek public and stakeholder feedback on how to address the other half of the province’s emissions later this fall.
  • The TIER regulation will replace the current Carbon Competitiveness Incentive Regulation on Jan. 1, 2020.