Carbon pollution pricing: options for a Federal Greenhouse Gas Offset System, chapter 19

Environment and Climate Change Canada is establishing a tracking system for all compliance units under the Output-Based Pricing System (OBPS) as per section 185 of the Act. The tracking system will enable detailed and reliable compliance units tracking including tracking of the issuance, transfer, retirement, suspension, revocation and cancellation of Offset Credits. The tracking system will also be designed with robust security provisions to mitigate fraud and other undesirable market interference.

Rules and operational procedures will be established to ensure that a greenhouse gas (GHG) reduction is issued an Offset Credit once and will have unique serial numbers that will facilitate tracking and proof of ownership. These serial numbers will also help Environment and Climate Change Canada monitor and enforce rules regarding use of Offset Credits in the OBPS. Transparent procedures will be established to ensure that any Offset Credits can only be used once to meet a compliance obligation or to fulfill a voluntary commitment (i.e., not double-issued, double-sold or double-used). Checks will also be undertaken to ensure that the project/units have not been registered in other systems.

Environment and Climate Change Canada expects to allow any person to create an account in the tracking system to purchase Offset Credits^{Footnote 3} . The tracking system will enable other non-facility market participants including brokers, traders, and other participants, to transfer Offset Credits between accounts. Project Proponents and buyers of Offset Credits may choose to voluntarily cancel Offset Credits in the tracking system for the benefit of the environment or any other reason beyond OBPS compliance purposes.

Regulations for the Federal GHG Offset System will identify the records keeping requirements for Project Proponents. Environment and Climate Change Canada will ensure that key information about registered offset projects from the tracking system is made publically available. This may include administrative information about the project (project start date, location, name of Project Proponent, etc.) and information related to offset credits by type (protocol), year (vintage) and quantity, including active and retired units in publicly accessible registries.