Ontario's Climate Change Mitigation and Low-carbon
Economy Act, 2016, which provides for the initial
distribution of free allowances at levels comparable to current
emissions, passed on May 18, 2016, and its companion regulation (O. Reg. 144/16) was adopted on May 19, 2016.
The legislation is very similar to that proposed in February, with
more favourable treatment of particular industries such as
cogeneration and biomass facilities.
The regime provides for the initial distribution of free
allowances at levels comparable to current emissions. Regulated
entities (industries with more than 25,000 tonnes of
CO2-equivalent emissions, natural gas distributors,
electricity importers and petroleum suppliers) are required to
gradually reduce emissions, purchase allowances from the government
or seek allowances or credits in the carbon market. Compliance
obligations start on January 1, 2017, with the first compliance
period running until December 31, 2020. The first
