Name of Instrument
Saskatchewan OBPS
Subnational - State or Province ETS
Implemented in 2019
Saskatchewan
Free allocation (Intensity-based)
Price ceiling
All
Point source
Not permitted
Covered Sectors
- Covered
- In principle
Description
Saskatchewan’s Output-Based Performance Standards (OBPS) Program came into effect in 2019. It is an emission intensity-based baseline-and-credit ETS for large industrial emitters, in which covered entities are required to fulfill a compliance obligation for emissions that exceed the facility’s annual permitted emissions. Emissions limits are based on production levels multiplied by an emissions intensity value. Each facility’s baseline draws on historical emissions and production data. All emissions up until the limit do not require payment, with only the surplus triggering the compliance obligation.
A compliance obligation may be fulfilled by retiring performance credits (compliance units) generated within the OBPS Program or by making a payment at a prescribed rate per tonne of CO2e into the Saskatchewan Technology Fund.
The system applies to the same gases and covers equivalent sectors as those under the federal system, and follows the same price trajectory, rising CAD 15 (USD 11.11) each year until 2030, resulting in a price of CAD 170 (USD 125.93) per tCO2e for 2030 emissions.
Recent Developments
In November 2022, the Canada federal government announced that the Saskatchewan OBPS program meets the federal benchmark requirements, and the provincial system expanded its sectoral coverage from 1 January 2023. After the 2023 expansion, all covered industrial emitters in Saskatchewan transferred to the provincial OBPS. Coverage was expanded to include electricity generation and natural gas transmission pipeline sectors.
Coverage
The inclusion thresholds are set lower than in the Canadian federal system, covering GHG emissions from facilities in covered sectors with emissions exceeding 25,000 tCO2e/year and with a voluntary opt-in option for any emitting facility that is in a sector already covered by Saskatchewan’s OBPS Program or that demonstrates that it operates in an emissions-intensive, trade-exposed sector.
Operators do not have to pay for GHG emissions up to their freely allocated emission level. Facilities can earn performance credits if their emission intensity is below their performance standard, and sell these credits to other covered facilities or bank them for future compliance cycles.
Facilities can meet their compliance obligations through retiring an equivalent amount of performance credits or paying into the Saskatchewan technology fund at a fixed price per tCO2e.
Pricing and allocation approaches
Operators can pay into the Saskatchewan technology fund to meet their compliance obligations, which effectively acts as a price ceiling on the price of eligible credits. The price is equal to the federal carbon price. This price ceiling is aligned with the federal minimum carbon price (CAD 65, USD 48.15, in 2023). The price increases by CAD 15 (USD 11.11) each year until 2030, resulting in a price of CAD 170 (USD 125.93) per tCO2e in 2030. Output-based. The total emission limit under the Saskatchewan OBPS Program is the bottom-up combination of the absolute emission baseline for each covered facility. The emissions threshold (the emissions intensity above which a facility is required to pay compliance) is determined by a facility specific baseline, minus the emission intensity reduction required for the sector, in that year. The total emission limit under the Saskatchewan OBPS is the bottom-up combination of the absolute emission baseline for each covered facility.
Compliance Approaches
Point source. Operators are liable for reporting the emissions covered under the Saskatchewan OBPS Program at a facility level and meet their compliance obligations for the emissions above their performance standard. Reporting and compliance are reported annually. The use of offset credits is not allowed.
Relation to other compliance CPIs
The Saskatchewan OBPS is not linked with any other system. However, a covered facility can receive an exemption certificate from the Canada Revenue Agency so it does not have to pay the federal fuel charge on purchases from fuel distributors.
Covered Emissions
Price range:
in 2023
Indicates instruments with multiple price levels. Only the main rate is shown for these instruments. Data last updated on 1 April 2023
