Canada moves closer to building a nationwide marketplace to trade carbon credits as part of the Trudeau government’s aim to curb greenhouse gas emissions in the country.
The federal government released draft regulations that will create domestic market for trading carbon credits. This will allow companies in industries such as agriculture and forestry to voluntarily reduce their emissions by earning revenue through credits and, in turn, industries that need to curb their environmental impacts will be able to buy credits.
The proposed rules, unveiled by Environment and Climate Change Canada, are the latest to be proposed in Canada and come as industries are under increasing pressure to reduce climate-polluting emissions. The rules, which include strict criteria for projects, are expected to be in place in the latter part of 2021.
Eligible projects will be able to generate credits, also known as greenhouse gas offsets, with one metric ton of carbon dioxide reduced being equivalent to one credit that may be sold to a buyer, according to materials from the federal government. This is a way for buyers to offset their own greenhouse gas emissions. Projects must meet Canada’s strict eligibility criteria in order to generate credits that must be quantifiable, verifiable and permanent.
The regulations will include a tracking and verification system that will be shared through a public registry.
Details Courtesy of Bloomberg.