The 360 on Energy: Be proactive about carbon costs
By David Arkell
June 6, 2019 - Does your organization operate in New Brunswick, Ontario, Manitoba or Saskatchewan? On Apr. 1, 2019, a federal carbon tax began applying to fossil fuels consumed in these four provinces because, unlike other Canadian jurisdictions, they have not put their own price on greenhouse gas (GHG) emissions that contribute to climate change.
By David Arkell
The initial tax is $20 per tonne of carbon dioxide (CO2) equivalent. Its cost reflects the quantity of GHGs emitted from burning each type of fossil fuel, e.g. 3.9 cents per m3 of natural gas. The tax is set to increase by $10 per year until it reaches $50 per tonne in 2022.
Know what you use
Have you budgeted for increased energy costs? If you know how much your facility already consumes, then you san set a baseline as the foundation for your energy management strategy, so actions to reduce GHG emissions can follow, such as implementing conservation measures, changing procurement practices and/or adding on-site generation. You can then account for avoided carbon tax costs by tracking, reporting and verifying savings associated with emission reductions.
Know if you can enjoy a partial exemption
Large emitters (i.e. above 10,000 tonnes of CO2 equivalent) in specified industries may apply to join the federal output-based pricing system and get an exemption from paying the entire carbon tax.
Greenhouse growers can receive an 80% carbon tax break for natural gas and propane used to heat or provide CO2 for their crops, while farmers can receive total exemptions for fuel used in their work equipment.
For any exemptions to be applied, of course, utility providers need to be notified about them.
Take action to reduce costs
While it is impossible for most energy managers to immediately eliminate the use of fossil fuels and avoid the carbon tax, (a) incentives and rebates will help in the medium term and (b) reducing your reliance on energy that contributes to global warming is a long-term challenge.
With the right playbook, fuel switching, energy efficiency and carbon tax avoidance are all achievable.
David Arkell is CEO of 360 Energy, one of Canada’s pre-eminent energy management consulting firms. For further information or assistance, please contact him at 877-431-0332 or firstname.lastname@example.org.
This column originally appeared in the May 2019 issue of Energy Manager Canada magazine.