Canada announces new climate change plan, sets sector targets

Montreal (Platts)--26Apr2007

Industrial sector emissions reduction targets were announced by Canada's
Conservative government Thursday after weeks of anticipation and speculation.

As expected, after two leaked versions of the government's climate change
plans, the Conservatives have set a 20% emissions reduction target below 2006
levels by 2020, a cut of 150 million mt.

"In as little as three years, greenhouse gases could be going down,
instead of up," said federal Environment Minister, John Baird.

The regulation of greenhouse gas emissions from major industrial sectors
is expected to reduce emissions by 60 million mt below 2006 levels by 2020.

Under the plan, companies can choose from a range of options their most
cost-effective abatement method including: in-house reductions, contributions
to a capped technology fund, domestic emissions trading and offsets and access
to the Kyoto Protocol's Clean Development Mechanism.

If met, fuel efficiency and energy efficiency measures would cut
emissions by 40 million mt below 2006 levels by 2020 while initiatives in the
energy and transportation sectors would cut emissions by 10 million mt from
2006 levels by 2020.

Companies that have already reduced their greenhouse gas emissions prior
to 2006 will be rewarded with a limited one-time credit for early action.

The plan, "Turning the Corner" also aims to halve air pollution levels by
2015 and the government said it intends to develop regulations to develop a
Canada-wide sulfur dioxide and nitrogen oxide trading market.

The trading system, established under a Regulatory Framework for Air
Emissions, would allow regulated firms to trade emission credits among
themselves. A domestic offset system would also allow regulated firms to
invest in verified emission reductions outside the regulated system.