Name of Mechanism
Alberta Emission Offset System
Emissions offset, Emission performance credits, Sequestration credit, Capture recognition tonne, Alberta sequestration credit
Governmental
Implemented in 2007
Alberta
Eligible Activities
Countries Hosting Projects:
Description:
Alberta’s carbon offset crediting mechanism was established in 2007. To be eligible for crediting, all activities must take place within the province of Alberta and meet a number of other system requirements including having a government-approved quantification protocol.
The Canadian federal government recognizes the Alberta Emission Offset System under a number of approved protocols to supply a source of credits (called Recognized Units) to the federal-regulated facilities under the federal output-based pricing system program since August 2020. The federal output-based pricing system does not apply in Alberta.
Other credit types include:
• Emission performance credits, created by regulated facilities whose emissions are less than their allocations;
• Sequestration credits, which occur from converting emission offsets from deep saline aquifer sequestration or enhanced oil recovery and enable the underlying activity to also participate in generating credits under Canada’s Clean Fuel Regulations; and
• Capture recognition tonnes, which are converted sequestration credits and can be applied at a regulated facility that captured the carbon dioxide as if it was an on-site reduction.
Recent Developments:
The TIER Regulation was amended effective January 1, 2023, and updated a number of requirements for regulated facilities and Alberta emission offset projects. Related to credits, amendments include a phased-in increase in credit use limit (rising from 60% maximum in 2023 by 10% per year until it reaches 90% in 2026), reducing the credit expiry period to 5 years, additional reviews for project credit extensions, and the establishment of two new credit types – sequestration credits and capture recognition tonnes – to support carbon capture and storage business models. The guidance and requirements of the offset system are also updated including the Standard for Greenhouse Gas Emission Offset Project Developers (version 3.2, released April 28, 2023) and the Carbon Offset Emission Factor Handbook.
In 2023, Alberta Environment and Protected Areas approved and released revised Agricultural Nitrous Oxide Emission Reductions and Greenhouse Gas Emission Reductions from Pneumatic Devices quantification protocols, and is developing an Improved Forest Management on Private Lands protocol.
Relation to Compliance Carbon Pricing Instruments or other Voluntary Schemes in the country:
Alberta TIER Regulation and Canada’s Output-based Pricing System
