Ottawa approves Alberta industrial carbon-pricing plan

WINNIPEG, Manitoba (Reuters) - The Canadian government has approved the province of Alberta’s plan to price industrial pollution, the federal environment minister said on Friday, marking a rare point of agreement in the two governments’ fractious relations.

FILE PHOTO: The expansion of the Canadian government-owned Trans Mountain oil pipeline advanced to a new construction stage, in Acheson, Alberta, Canada December 3, 2019. REUTERS/Candace Elliott/File Photo

Alberta is home to 80% of Canada’s oil production, an industry that is a major source of greenhouse gas emissions and is also struggling from a shortage of pipeline space.

Prime Minister Justin Trudeau’s national carbon-pricing plan is important to left-leaning supporters of the Liberal government, which controls a minority of parliamentarians and depends on smaller parties to stay in power.

The federal plan has upset the resource-rich western provinces of Alberta and Saskatchewan, which are led by conservative governments that say it would harm the energy and agriculture sectors. Neither province elected a single Liberal in the October election.

Environment Minister Jonathan Wilkinson said Alberta’s industrial carbon-pricing plan meets federal standards, but it does not include fuel, so a federal fuel charge will take effect in Alberta on Jan. 1.

Most of the revenue will be returned to Albertans through rebates.

Alberta Environment Minister Jason Nixon said the province was pleased that Ottawa approved its industrial carbon plan. The province will fight to set its own policies in future, including through the courts, as federally scheduled carbon price increases take effect in coming years, he said in a statement.

Ottawa’s approval of Alberta’s plan is not surprising, said Keith Stewart, Greenpeace Canada senior energy strategist.

“I think they’re trying to avoid a fight.”

Premier Jason Kenney’s plan, called Alberta’s Technology Innovation and Emissions Reduction regulations (TIER), will charge C$30 per tonne of emissions from industrial sectors such as oil and gas, electricity, cement and farming starting Jan. 1. It replaces a system put in place by Alberta’s New Democratic government, which was defeated in a spring election.

Stewart noted, however, that the plan is more favorable to less-efficient industrial sites because carbon-pricing is based on reduced emissions based on each facility’s past performance.

Reporting by Rod Nickel in Winnipeg, Manitoba and Steve Scherer in Ottawa; Editing by Steve Orlofsky and Dan Grebler