Nia Williams

(Reuters.) Canada has launched a credit program for greenhouse gas reductions. The system is a significant part of Canada’s plans to cut carbon emissions.

According to the government, protocols are being developed for four more sectors such as agriculture and forest management. This summer, the government plans to develop carbon capture technology protocols, which Canada’s oil-rich industry hopes will reduce its emission.

Premier Minister Justin Trudeau and his Liberal government have pledged to reduce climate-warming emissions by 40-45% from 2005 levels by 2030. Canada’s greenhouse gas emissions are 7% from its total carbon output.

Greenhouse gas offset credit systems are intended to help a national carbon trading market. The government stated that it would create economic opportunities for businesses and cities working towards reducing their emissions.

Participants will have the ability to register projects and receive one tradeable credit for each tonne reduced in emissions, as long as their projects comply with federal offset protocol that outlines exactly what activities are eligible.

The credits can be then sold to other companies, like heavy industrial emitters that are required to limit carbon pollution or to businesses who want to offset their own emissions.

Steven Guilbeault, federal Environment Minister said that he had started with the landfills and is establishing a market-based incentive system to encourage municipalities and businesses to invest in technologies and innovation to reduce pollution.

Offset projects that generate credit must be extra – they must go above and beyond the existing practice, legal requirements and be not incentivized under Canada’s carbon pricing.

Canada’s current carbon price, currently at C$50/tonne, is expected to be broadly mirrored by Canada’s credit price. This price will increase to C$170/tonne by 2030.