On June 8, 2022, the federal government launched Canada’s Greenhouse Gas Offset Credit System, which will give municipalities, foresters, farmers, Indigenous communities, and others a market-based incentive to develop projects that reduce greenhouse gas emissions.

Qualifying projects can now generate one tradeable offset credit for every tonne of emissions that are reduced or removed from the atmosphere. Credits can be sold to businesses or utilities, to help meet obligations under the carbon pollution pricing system, also known as the Output-Based Pricing System.

Eligible projects must register to follow the applicable federal offset protocols, and must go beyond common practices and legal requirements to generate credits that are not already incentivized by the carbon pollution pricing system.

The first federal offset protocol, Landfill Methane Recovery and Destruction, was included with Canada’s Greenhouse Gas Offset Credit System announcement. The new offset protocol will allow municipalities and other landfill operators to generate credits by recovering landfill gas, which is a significant source of methane by either destroying it or repurposing it into energy (such as injecting it into a natural gas network). However, projects started before 2017 are not eligible.

Additional offset protocols are currently being developed to aid the reduction of greenhouse gas emissions from Refrigeration Systems, Improved Forest Management, Enhanced Soil Organic Carbon, and Livestock Feed Management. A protocol for Direct Air Carbon Capture and Sequestration will later begin development this summer.

To learn more about Canada’s Greenhous Gas Offset Credit System, view the regulations by clicking here.