July 2016: CPIAhas been active on the Ontario files of Climate Change and Cap & Trade for the last two years – participating in consultations with the government and other industry groups to present the plastic industry’s position on this critical global issue that will affect our industry operations and the economies we participate in. CPIA has filed a number responses with the government and surveyed its members on their concerns and issues.
On June 8, 2016, the Ontario government released itsClimate Change Action Plan(CCAP).This is a five-year plan to fight climate change, reduce greenhouse gas pollution and transition to a low-carbon economy. The Plan will provide the tools, funding and incentives to businesses and citizens to use clean technologies that will accelerate the reduction in greenhouse gases and fight climate change.
The cornerstone to this program is theOntario Cap & Trade Programwhich joins the Western Climate Initiative, California and Quebec in an effort to create a market for carbon emissions by capping and reducing them over time. Ontario's Cap & Trade program is expected to generate proceeds of approximately $1.9 billion per year, and will commence January 2017 with the first auction planned for March 2017. Companies should review therules for reporting.
The specific initiatives of the recently announced CCAP will target a number of sectors, including transportation, buildings/homes, land use planning, industry/business, research/development, government, and agriculture/forests/land. The initiatives will be funded through the Greenhouse Gas Reduction Account (GGRA), which will secure the proceeds from the Cap & Trade program.
What are the impacts and opportunities for the plastic industry and businesses?
The CCAP is intended to assist companies transition to a low-carbon economy by:
- Supporting significant emissions reductions by large final emitters, as well as small and medium enterprises, by providing funds to offset the cost of low-carbon technologies.
- Supporting research and development, clean technology clusters and commercialization and deployment of low-carbon technologies.
- Providing transitional allowances to industry to help them transition to lower carbon technology while they reduce greenhouse gas emissions.
The delivery model will be finalized in consultation with existing utilities during summer 2016, with the goal of beginning to provide services in the second half of 2017. The intention is to ensure companies can manage the impacts of the Cap & Trade program and remain competitive.
In addition to the GGRA, the government has established theGreenBank, which will help homeowners and businesses access and finance energy-efficient technologies to reduce greenhouse gas pollution from buildings.
The opportunities provided through the Green Bank will assist companies to finance low-carbon energy technologies to reduce carbon pollution from buildings and manufacturing facilities. Taking advantage of these programs early on in the greenhouse gas reduction mandate will assist companies in remaining competitive, especially those in the plastics industry that are more energy intensive.
Anticipated impacts for companies in the plastics sector will be increased costs of all fuels, electricity for buildings and transportation, as the Cap & Trade program progresses to its targeted reductions over the next five years and beyond. Plastic manufacturers need to assess these impacts on their operations, and plan how they will use the CCAP’s funding to mitigate these impacts. It is also anticipated that feedstocks and inputs to manufacturing will be impacted, as no element that involves energy in its production will be left untouched by the Cap & Trade program.
Click herefor more Information on Ontario’s Climate Change Plans. CPIA will continue to monitor this important legislative development and will provide relevant updates to members in the coming weeks and months.
Krista Friesen,VP Sustainability
Canadian Plastics Industry Association
t. 905.678.7748 ext. 234
e. kfriesen [at] plastics.ca