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Analysts slash 2019 Canadian OBPS credit shortfall forecast

More lenient standards for coal plants and other industries, along with a lower number of overall participants, will see the forecast compliance unit deficit for large Canadian emitters regulated by the federal Output-Based Pricing System (OBPS) nearly halved this year, according to new analysis released Tuesday.

Environment and Climate Change Canada (ECCC) published draft OBPS regulations in December as part of Ottawa’s ‘backstop’ carbon pricing strategy. Beginning this year, facilities emitting over 50,000 tonnes of CO2e annually across five provinces and two territories will be covered by the programme.

Previously, Toronto-based consultants ClearBlue Markets predicted that these companies would face an 11.8 million tonne shortfall in compliance units this year under the OBPS.

However, the analysts slashed their compliance demand estimate by 45% to 6.5 Mt in 2019 due to ECCC’s updates to the programme published last month.

Additionally, ClearBlue predicted emitters would only be short 2.1 Mt in 2022, a quarter of its 8 Mt estimate last fall.

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