Nova Scotia’s Output-based Pricing System for Industry

Nova Scotians are grappling with the impacts of climate change. Nova Scotia’s Risk Assessment indicates that without action, the province will face greater temperature increases, more intense storms, and many other challenges. Recognizing the urgent need, greenhouse gas reduction is imperative to mitigate climate threats. In response, Nova Scotia continues to lead the nation in greenhouse gas reductions and has set ambitious goals for a future of sustainable prosperity.

The new Output-based Pricing System will help the province meet targets of a 53% reduction in greenhouse gas emissions by 2030, and net-zero emissions by 2050. The Output-based Pricing System will regulate greenhouse gas emissions from large emitters, which includes Nova Scotia’s industrial and electricity generation sectors.

Output-based Pricing System overview

The Output-based Pricing System uses a carbon price set by the federal government which motivates regulated facilities to reduce their emissions while also being competitive in a global market. 

Facilities registered under the Output-based Pricing System (“regulated facilities”) are exempt from the federal fuel charge. Instead, registered facilities have to meet a performance standard for the amount of greenhouse gas emissions released during the manufacturing of their products.

Under the Output-based Pricing System, a regulated facility is motivated to meet or exceed its annual performance standard and has options for how to comply.

Any reductions that bring a facility’s emissions below its performance standard are eligible for performance credits, where one credit is equal to one tonne of greenhouse gas emissions reduced. A regulated facility can sell performance credits to other regulated facilities or save credits and use them in the future as a way to meet future obligations.

Conversely, regulated facilities face a compliance obligation for each tonne of emissions above their performance standard. If a facility emits more than its performance standard, they have the option to pay the government at the price established by the federal government or buy performance credits from other regulated facilities.

Legislation and policy

• Environment Act (PDF)
• Output-based Pricing System Registration and Opt-in Regulations
• Output-based Pricing System Reporting and Compliance Regulations (PDF)
• Output-based Pricing System Reporting and Compliance Standard (PDF)
• Output-based Pricing System Reporting and Compliance Standard Adoption Regulations - Ministerial Order (PDF)

Industrial facilities

Participation in the Output-based Pricing System is limited to industrial facilities as defined in Section 112R(l) of the Environment Act. The definition includes Nova Scotian facilities engaged in (i) manufacturing and processing; (ii) mining, quarrying, and oil and gas extraction; or, (iii) electricity generation. Learn more: guidelines for industrial facilities.

Registered facilities

The following facilities are registered under the Nova Scotia Output-based Pricing System effective 1 January 2023: 

Annual Progress Report

Output-based Pricing System Annual Progress Report (PDF)

For more information contact nsobps@novascotia.ca.