On 16 September 2024, Alberta Environment and Protected Areas published Summary of 2023 Compliance Results under the Technology Innovation and Emissions Reduction (TIER) Regulation. The document summarizes regulated emissions, compliance positions, and credit usage aggregated by sector under the program. The report shows total regulated emissions (TRE) at 164.7 megatons, a 3% increase from 2022, and the highest use of credits for compliance since the program’s start, at 7.2 million offsets and 4.1 million EPCs submitted. ClearBlue’s recent Live Update summarizes and analyzes the results against previous years.
TIER is Alberta’s provincial carbon pricing program for large industrial emitters and aggregated facilities. Approved by the federal government in December 2019, TIER allows Alberta to maintain jurisdiction and control over its industrial carbon pricing regulations, while the Federal Fuel Charge (carbon tax) applies to consumers and facilities not regulated under TIER. Alberta has published compliance summaries for each compliance period from 2020 onwards
The Update to the Pan-Canadian Approach to Carbon Pollution Pricing 2023-2030 includes the requirement for public reporting on explicit price-based systems like TIER. This includes, at a minimum, total GHG emissions from covered facilities and sectors, total number of credits issued, total compensation obligation, compliance broken out by method, credit status, and carbon market activities. Currently, public reports to parliament are published on the Greenhouse Gas Pollution Pricing Act (GGPPA), covering both the fuel charge and the Federal Output-Based Pricing System (OBPS). Similar public reports, such as for the Ontario Emissions Performance Standards (EPS) program, are expected next year, following full compliance for the 2023 compliance period.
Alberta’s carbon policy remains a point of contention in Canadian politics. Premier Danielle Smith has openly opposed federal climate policies, particularly Prime Minister Justin Trudeau’s proposed Oil and Gas Emissions Cap and Clean Electricity Regulations. Smith argues that these initiatives could have severe consequences for Alberta's energy sector and economic stability. In late 2023, Smith escalated tensions by vowing to defend provincial jurisdiction over natural resources, even suggesting legal challenges to federal climate initiatives.
Should a Conservative government win the next federal election, many of Trudeau's key climate policies, including the Oil and Gas Emissions Cap and Clean Electricity Regulations, could be rolled back or revised, both of which could be potential sources of demand for Alberta Recognized Units. A shift in federal leadership could bring changes to TIER if the federal backstop is further amended. This could alter the stringency of Alberta's carbon pricing schedule, potentially raising the baseline stringency of emissions reductions or changing the forecasted value of credits.
ClearBlue recently published an updated TIER Supply and Demand report, covering TIER credit price movements and policy and regulatory updates in light of upcoming elections. The supply and demand model is extended through 2035 with scenarios and pricing forecasts. Contact us for full access to the findings.