Industry NewsfeedCourtsey of McCarthy Tetrault. View original article here.
On July 17, 2020, the Government of Canada published its Strategic Assessment of Climate Change (SACC), which will be used to assess the impacts of climate change in federal impact assessments conducted under the federal Impact Assessment Act (IAA).
The SACC is deemed a strategic assessment under section 95 of the IAA; a strategic assessment provides guidance on how a policy, plan, program or issue relevant to conducting impact assessments should be considered in the impact assessment process. The SACC applies to designated projects under the IAA. For non-designated projects on federal lands and outside Canada subject to the IAA, the principles and objectives underlying the SACC will be built into guidance for the review of such projects. Similarly, guidance for projects regulated by the Canada Energy Regulator will consider the principles and objectives of the SACC. In addition, the SACC may also apply to environmental reviews by other federal lifecycle regulators, and be used in regional assessments. Environment and Climate Change Canada has indicated that it plans to review and update the SACC every 5 years.
Policy Context
As described in our previous blog posts, the IAA came into force in August 2019 and applies to projects designated by regulations under the Act, as well as to projects that are specifically designated by the Minister. Projects being assessed under the IAA must include a consideration of the extent to which the effects of the project hinder or contribute to the Government of Canada’s ability to meet: (i) its commitments in respect of climate change; (ii) its 2030 greenhouse gas (GHG) emissions targets; and, (iii) Canada’s goal of achieving net-zero emissions by 2050.
Overview of SACC Requirements
The SACC describes how the above factors are to be considered in an impact assessment under the IAA, particularly, the type of climate change information that must be provided and how such information will be reviewed. The SACC requires that proponents of projects provide an estimate of the GHG emissions for a project which are to be calculated as net GHG emissions. A net GHG emissions calculation will need to take into account direct emissions from a project, as well as emissions from energy used by the project. Carbon dioxide (CO2) that is captured from the project and stored (in accordance with prescribed requirements), avoided domestic GHG emissions (emissions that are reduced or eliminated in Canada as a result of the project) and offset credits (purchased from accredited bodies) can be subtracted from the net GHG emissions calculation.
Proponents will also be required to provide information about the emissions intensity of their projects, and this information will be compared to national and international projects of a similar scope and nature. A description of mitigation measures and the plan for the project to achieve net-zero emissions by 2050 is also required, as is information on the project’s ability to cope with the physical impacts of climate change (a climate resilience assessment).
The SACC also requires that proponents provide estimates of upstream GHG emissions (emissions from upstream stages of resource extraction or production) for projects that exceed prescribed upstream threshold estimates of GHG emissions per year. This upstream GHG threshold will decline over time (starting at 500 KT CO2 equivalents per year for projects in 2020-2029 and declining to 100 KT CO2 equivalents per year by 2050). Downstream emissions are not included in the assessment.
Looking Ahead
The above is a high level overview of the types of climate change-related information that will be required for projects undergoing an assessment under the IAA. Further details are contained in the SACC and the federal government will also be publishing technical guides later in 2020 and in 2021. The technical guides will cover: (i) quantification of net GHG emissions, upstream GHG emissions, and carbon sinks; (ii) GHG mitigation measures, Best Available Technologies / Best Environmental Practices (BAT/BEP) and plans to achieve net-zero emissions by 2050; and (iii) climate change resilience. Information about the climate change-related impacts of a project will be considered, refined, and updated throughout all stages of an impact assessment under the IAA, from the Planning Phase to the Decision Making Phase.
The SACC is the first federal guidance that provides detailed information on how climate change will be considered in assessing a project. It will be interesting to see if the guidance provided in SACC will become widely used in federal decision-making (i.e. not just in the context of projects under the IAA) and whether provinces will follow suit in publishing similar guidance to be used in decision-making on projects at the provincial level.
EVENTS