July 15, 2021

OBPS Fraction of Historical Emission Cutoff

The output-based pricing system (OBPS) is designed to put a price on carbon emissions for facilities that emit >50,000 t of CO2 (large industrials) as an incentive to reduce GHG’s and spur innovation.

Regulations determine permissible GHG levels based on historical industrial processes at facilities. The oil and gas standard decreases at ~2% per year to achieve increased emissions efficiency.

Large industrials will pay a price on carbon emissions that exceed the set level and earn credits (one tonne CO2 e/credit) if below emission cutoff.

  • For example, a normal operating pipeline compressor would pay for 20% of overall emissions in 2022 and 34% in 2030

Credits can be used to achieve compliance within a company or be marketed to other firms.