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ARTICLE · 12 MARCH 2024

BC Output-Based Pricing System For Carbon Emissions

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On April 1, 2024, the new Output-Based Pricing System (OBPS) will come into force under the Budget Measures Implementation Act, 2023 (Budget 2023). The OBPS is a new British Columbia...

CanadaEnergy and Natural Resources
Bennett Jones LLP
Bennett Jones LLP
Claire Gibson
Claire Gibson
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On April 1, 2024, the new Output-Based Pricing System (OBPS) will come into force under the Budget Measures Implementation Act, 2023 (Budget 2023). The OBPS is a new British Columbia (BC) emissions pricing system (although not new in the rest of Canada). Effective April 1, 2024, most industrial operators in BC will transition from the CleanBC Industrial Incentive Program (CIIP) to the OBPS.

British Columbia had announced the proposed changes as part of Budget 2023 and amended the Carbon Tax Act and Greenhouse Gas Industrial Reporting and Control Act to enable the shift to the way the province will price greenhouse gas emissions for industrial operations.

Background

In 2008, British Columbia became the first Canadian jurisdiction to implement a tax on greenhouse gas emissions. The tax was initially set at $10/t CO2e and increased by $5 per year until it reached $30/tCO2e in 2012. Initially, the tax was notionally designed to be revenue neutral (i.e., the

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