Nova Scotia’s Output-based Pricing System for Industry

Nova Scotia has a plan to respond to the global climate change emergency. A plan that will not only reduce greenhouse gas emissions, but will make our homes energy efficient, create good-paying jobs throughout the province and strengthen our economy. 

In 2021, Nova Scotia legislated the most ambitious greenhouse gas emission reduction targets in Canada. The Environmental Goals and Climate Change Reduction Act will: 

• reduce greenhouse gas emissions by 53% below 2005 levels by 2030 
• achieve net-zero greenhouse gas emissions by 2030

This legislation also commits to: 

• close coal-fired power plants by 2030
• have 80% of electricity be renewable by 2030

About 50% of the greenhouse gas emissions emitted each year in Nova Scotia are from the electricity sector and industry.

In 2022, Nova Scotia introduced new legislation to hold these large emitters accountable for reducing their carbon footprint. The Output-Based Pricing System (OBPS) will put a price on carbon that creates an incentive for industry to reduce their emissions while maintaining competitiveness. 

Facilities registered under the OBPS system are exempt from paying the federal fuel charge. Instead, emissions-intensity standards, also called performance standards, are applied to each regulated facility.

A facility can be incentivized to meet or exceed its annual performance standard and has options for how to comply. Any emissions reductions that bring a facility’s emissions intensity below its established performance standard are eligible to generate performance credits, where one credit is equal to one tonne of GHG emissions reduced. A 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 will have a compliance obligation for each tonne of emissions above their established performance standard. If a facility emits more greenhouse gas emissions than its performance standard allows, it has the option to pay the government at the federally established carbon price or purchase and remit performance credits from other regulated facilities.

Legislation and regulations

The Nova Scotia Output-Based Pricing System came into effect on 1 January 2023.

Regulations were made in early 2023 to provide for registration and voluntary participation under the Nova Scotia OBPS. Registration in the OBPS is mandatory for facilities emitting 50,000 tonnes of CO₂ equivalent (CO₂e) or more annually. Facilities with annual emissions of 10,000 tonnes of CO₂e or more are permitted to opt-in to the Nova Scotia OBPS on a voluntary basis.

The deadline for registration under the Nova Scotia OBPS for the 2023 year was 1 April 2023. 

The following facilities are registered under the Nova Scotia OBPS effective 1 January 2023:

In future years, the deadline to apply to opt-in to the program and register is 1 September of the preceding year. For example, to apply to opt-in for 2024, the deadline is 1 September 2023. 

Further regulations and standards around reporting, applicable performance standards for industry and the electricity generation sector, and compliance are currently in development and are expected to be released in 2023.

For more information contact nsobps@novascotia.ca.