Pending reforms to the Ontario air emissions regulatory regime promise to be of interest to energy project developers and, and no doubt to their lawyers as well. Specifically, those projects which now must obtain an ECA Air permit may soon have a much less onerous regulatory path before them. As the Ontario Ministry of the Environment and Climate Change (the Ministry, or MOECC) moves from a rules based to a risk based permitting system, some energy projects will no longer be subject to the ECA regime, whereby projects must apply for and receive the ECA permit, but will instead be able to register the project with the Ministry to satisfy the requirements of the Environmental Protection Act (the EPA).
Receipt of an Environmental Compliance Approval (ECA), currently the necessary permit to discharge a contaminant into the environment, per section 9 of the EPA, takes an average of nearly two years, though can take as long as six! The soon to be expanded Environmental Activity and Sector Registry (EASR), coming by way of the draft regulation O.Reg. 419/05, promise to create a quicker and less painful permitting process for deemed “less-risky” facilities.
[For a link to the relevant Policy Decision Notice see online: <https://www.ebr.gov.on.ca/ERS-WEB-External/displaynoticecontent.do?noticeId=MTI4OTQ4&statusId=MTk2OTc4>; and here for the follow-up Regulatory Proposal Notice, with links to the draft regulation. See online: <https://www.ebr.gov.on.ca/ERS-WEB-External/displaynoticecontent.do?noticeId=MTMwMTA4&statusId=MTk3MTU5&language=en>.]
Even proponents of projects not subject to the EASR amendments should welcome the efforts of the MOECC to streamline the permitting process, as they too stand to benefit, albeit indirectly. The regulatory timeline should be reduced for those projects that remain subject to the ECA, even if they do not get to avail themselves of the EASR shortcut. The Ministry currently receives between 1,000 and 2,000 air and noise ECA applications annually, and expects the proposed amendments to allow it to reduce wait times by channeling its resources to those deemed “higher-risk” projects still subject to ECA applications. It has set a one-year service target for those ECA applications received after 2017.
The coming changes
Facilities to remain subject to the ECA
As mentioned above, the draft regulation requires that all but high risk and/or more complex activities with air, noise and odour emissions register with the EASR, and will no longer require an ECA. For some activities or facilities the proposed amendments go even further, and will be explicitly exempt from requiring a section 9 EPA approval altogether. These new exemptions are to cover; (i) activities conducted in a public or private primary or secondary school for educational purposes, (ii) HVAC Systems, (iii) Standby Power Systems, and (iv) small wood fired combustors (rated at 50kW or less).
O.Reg. 419/05 provides some clarity on what the Ministry considers higher risk and/or complex activities. The proposed regulation establishes explicit categories which are to be ineligible to register with the EASR. For example, facilities where at least one of the following activities takes place are to remain subject to the ECA regime:
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Mining and Quarrying (Metal Ore Mining, Non-Metallic Mineral Mining, Quarrying, and Product Manufacturing
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Pulp, Paper and Paperboard Mills, including Veneer, Plywood and Engineered Wood Product Manufacturing, though there are some exceptions.
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Sawmills (except shingle and shake mills)
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Cement and Ready-mix Concrete Manufacturing
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Power generation: Fossil-Fuel Electric Power Generation if greater than 25 megawatts
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processing of waste via thermal treatment;
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using wood-fired combustors over 3 MW;
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the operation of an alternative low-carbon fuel facility;
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the operation of a stationary combustion turbine that uses fuel derived by the gasification or liquefaction of coal;
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Petroleum Refineries, and any Other Petroleum and Coal Products Manufacturing
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Asphalt Paving, Roofing and Saturated Materials Manufacturing
(see paragraphs 1-3 of s.2(2) of the draft regulation, and the schedule thereto for a more expansive list and description of the categories)
Reporting Requirements
The draft regulations and the new EASR regime bring with it new reporting requirements, involving the sign-off by a licensed engineer. Prior to registration and prior to making any modifications, said engineer must review or assess any air, noise or odour emissions from the facility and confirm the reports are in compliance with the regulation and guidelines necessary to remain in compliance with the EASR. After the initial registration, these assessments will need to be updated once every ten years.
Reporting requirements are specific to the type of facility. For emissions into air, an Emission Summary and Dispersion Modelling (ESDM) report must be prepared in accordance with sections 9 to 17 and section 26 of O. Reg. 419/05 and accompanied by an ESDM Supplemental Report document.
For noise emissions the assessment must be prepared using current Ministry screening techniques or through the preparation of an Acoustic Assessment Report (AAR). A Noise Abatement Action Plan (NAAP) may be necessary, if the facility is in operation before the proposed changes come into effect and the noise levels exceed the Ministry’s limits (as set out in NPC-300). New facilities, those to begin operating after O.Reg 419/05 come into force, will not have the abatement plan as an option. The power to order a third party audit of a facility, to verify compliance with NPC-300 is being considered by the Ministry. The third party audit would be similar to what can be included with an ECA, or a Renewable Energy Approval (REA).
With regard to odours, a Best Management Practices Plan (BMPP) for Odour, and/or an Odour Control Report must be prepared, should the preliminary screening form so indicate.
Fees
The benefits of these regulatory reforms will not be available at the current EASR fee of $1,190. In fact, the fee for types all EASRs will increase, as of December 1, 2016. The fee for the new air and noise EASRs, will be $2,353. Those facilities subject to the existing rule-based EASR regime will see annual increases in 10% increments until 2021. The lower fee ($1,190) will remain in effect for short-term project-based activities (e.g. water takings).
The Ministry is raising the EASR fees in order to allow it to achieve its objective of fully recovering the costs of running the EASR programme.
When
The Ministry is currently developing the necessary IT to allow for a January 2016 launch of the new registry. Thankfully there will be a transition period that will benefit those facilities already operating subject to an ECA. Those facilities and activities that will be subject to the draft regulation, though already have a valid ECA, will have until January 31, 2027 to register with the EASR. Should any modifications be made to the facility before the 2027 cutoff date, however, the ECA will in effect be abandoned and those facilities will also have to register with the EASR.
Any ECA applications received by the Ministry before the end of 2016 will have the option to remain in the ECA process or withdraw the application and register on the EASR. The ECA cutoff date in 2027 would then apply, should the applicant elect to remain under the ECA regime.