Ontario's facility-level carbon pricing system under O. Reg. 241/19. Performance-based emissions limits using TAEL (Total Annual Emissions Limit). Facilities outperforming earn EPUs; those exceeding must purchase EEUs or EPUs. No offsets allowed.
Ontario EPS sets performance-based emissions limits (TAEL) for each regulated facility based on production volume, Baseline Emissions Intensity (BEI), and annual stringency factors. Facilities compare their actual regulated emissions against their TAEL.
Below limit: Facilities earn EPUs (Emissions Performance Units). One EPU = 1 tCO₂e below the TAEL. EPUs are tradeable on the Ontario carbon market and bankable for 5 years, allowing facilities to manage compliance over multiple years.
Above limit: Facilities face a compliance obligation and must purchase EEUs (Emissions Excess Units) or EPUs to make up the deficit. EEU prices follow Ontario's carbon price pathway, escalating from $65/t in 2023 to $170/t by 2030.
Critical: Ontario EPS allows NO offsets. Only EPUs and EEUs can be used for compliance. Facilities must plan credit strategies and abatement investments well ahead of annual reporting deadlines.
Mandatory threshold: 50,000 tCO₂e. Opt-in threshold: 10,000 tCO₂e. Facilities below mandatory threshold may voluntarily participate.
Ontario's carbon price rises from $65/t in 2023 to $170/t by 2030. This escalating trajectory incentivises early facility investment in emissions reductions and strategic compliance planning.
Only Schedule 2 listed activities qualify for Ontario EPS regulation. Facilities must meet mandatory (50,000 tCO₂e) or opt-in (10,000 tCO₂e) thresholds.
Ontario EPS is built on performance-based compliance, tradeable credits, escalating prices, and mandatory reporting. The system is designed to balance compliance rigor with market flexibility.
Total Annual Emissions Limits are facility-specific, calculated from production volume, baseline emissions intensity, and annual stringency factors. Not a blanket cap—allows facilities to grow production while reducing carbon intensity.
One EPU = 1 tCO₂e below limit. EPUs can be traded on Ontario's carbon market and banked for up to 5 years. Facilities can monetize early abatement or purchase credits strategically.
EEUs follow Ontario's carbon price pathway ($65/t in 2023, escalating to $170/t by 2030). Facilities over limit must purchase EEUs to cover deficit by Dec 15 annually.
Critical design feature: Only EPUs and EEUs can be used for Ontario EPS compliance. Offset credits (Voluntary Carbon Market, international credits) are NOT accepted. Facilities must reduce actual emissions or purchase program credits.
Facilities failing to hold sufficient instruments by Dec 15 face 3x the prior year's average EEU price as penalty. Penalty is added to next year's compliance obligation. Strong incentive for early planning.
EEU payments are recycled into the Emissions Performance Program (EPP). Facilities purchasing EEUs can receive 1:1 funding for emissions-reduction capital projects and engineering studies—turning compliance costs into decarbonisation investment.
Ontario recycles EEU payments through the Emissions Performance Program (EPP). Facilities that purchase EEUs can receive 1:1 funding for emissions-reduction capital projects and engineering studies. Strategic facilities intentionally pay into EPS to finance decarbonisation rather than buying EPUs—turning a cost center into a source of capital for green investment.
TerraNova delivers finance-grade Ontario EPS intelligence for Facility Managers, CFOs, and Group Sustainability Officers—from TAEL calculation and EPU strategy to 5-year compliance cost forecasting.
Track facility emissions against TAEL (Total Annual Emissions Limit). Monitor production-weighted benchmarks, BEI stringency factors, and AAEL calculations (Methods A-G).
Cross-map emissions with EEU pricing ($65→$170/t), EPU market values, and EPP (Emissions Performance Program) 1:1 funding opportunities. Adjusted MACC reveals optimal abatement paths.
Best-fit projects with MACC sheets adjusted for EPS compliance costs, EPU generation potential, and EPP capital recycling (1:1 funding on EEU payments).
Manage EPU credit generation, trading and banking (5-year window). Track EEU payment strategy — intentional pay-in for EPP funding access vs market credit procurement.
5-year compliance forecast integrating production scenarios, TAEL tightening, and EEU price path ($65–$170/t). Buy/bank EPU optimisation.
Track Ontario MECP regulatory updates, O. Reg. 241/19 amendments, EEU price schedule, and cross-reference with federal OBPS, Alberta TIER, and CFR.
Deep-dive analysis, strategic guidance, and regulatory updates on Ontario's emissions market from our compliance markets team.
A comprehensive guide to Ontario's Emissions Performance Standards—TAEL calculation, EPU strategy, compliance deadlines, and the EPP funding opportunity.
How to calculate your facility-specific Total Annual Emissions Limit. Production-based benchmarking, baseline emissions intensity, and stringency factor adjustments explained.
Build multi-year EPU and EEU strategies. When to bank credits, when to sell, and how to minimize compliance costs as prices rise through 2030.
Answers to the most common questions about Ontario's Emissions Performance Standards, compliance obligations, and credit trading.
Ontario's EPS is the province's output-based pricing system for large industrial emitters, established under O. Reg. 241/19. It sets facility-level Total Annual Emissions Limits (TAELs) based on sector-specific benchmarks. Facilities that emit below their TAEL earn Emissions Performance Units (EPUs) they can sell; those exceeding their TAEL must pay Excess Emissions Units (EEUs) or acquire EPUs.
Facilities emitting 50,000+ tonnes CO₂e per year are automatically covered. Smaller facilities emitting 10,000-50,000 tonnes can voluntarily opt in. Covered sectors include steel, cement, chemicals, mining, petroleum refining, and other energy-intensive industries. The program covers approximately 100+ facilities across Ontario.
EEU prices follow Ontario's carbon pricing schedule, rising from $65/tonne in 2023 to $170/tonne by 2030. This creates a strong incentive for facilities to reduce emissions or purchase EPU credits (which typically trade below the EEU price). The escalating price path provides long-term certainty for capital investment decisions in decarbonisation.
Yes. Ontario updated the EPS in 2023 to formally recognise CCS as an eligible emissions reduction activity. Facilities using CCS can count captured and permanently stored CO₂ against their TAEL, reducing their compliance obligation. This is a significant development for heavy industry looking at CCS as a long-term decarbonisation pathway.
Climate Decode's TerraNova platform provides end-to-end Ontario EPS support: emission reporting and MRV, TAEL benchmark analysis, compliance pathway optimisation (reduce vs buy EPUs vs pay EEUs), CCS integration modelling, and long-term decarbonisation planning aligned with the rising carbon price from $65/t (2023) to $170/t by 2030.
See how TerraNova delivers finance-grade Ontario EPS intelligence—from TAEL tracking and EPU strategy to 5-year compliance forecasting and EPP funding recovery.