Finding no federal exemption, Higgs seeks avenues to offset iron plant emissions

Premier Blaine Higgs is now acknowledging that the federal "exemption" he was hoping to win for the proposed high-emissions Maritime Iron isn't possible at the moment.

Last week Higgs said an exemption from Ottawa, like one already in place at a liquefied natural gas plant in British Columbia, would allow New Brunswick to approve the iron plant despite the greenhouse gases it will emit.

Higgs told CBC News Wednesday that the idea of an exemption came from his first meeting as premier with federal cabinet minister Dominic LeBlanc in 2018, and from a Globe and Mail story last June about the LNG Canada plant in B.C.

In both cases the idea was that the B.C. plant would lead to lower emissions elsewhere in the world because its LNG would displace coal-burning power plants in Asia.

LeBlanc "said to me that that is how the project is being promoted," Higgs said. "I understood that to mean that, OK, there's an offset there that's being applied to that project."

Maritime Iron says its plant will increase emissions in the province by 2.3 million tonnes, blowing past the province's climate targets, but will lower emissions elsewhere in the world by displacing dirtier, higher-pollution plants and reducing shipping distances.

The June 2, 2019, Globe and Mail story said the B.C. LNG plant "will earn" credits under the Paris agreement.

Higgs says he now understands that it will take an international agreement before Canada can offset increased emissions here with reductions elsewhere.

Countries failed to agree last November on a binding set of rules on how to measure those corresponding reductions overseas.

In search of global agreement

On Tuesday, federal Environment Minister Jonathan Wilkinson said Ottawa had no role in approving the Maritime Iron project and "we expect that provinces are going to focus on how they actually meet their own emissions targets."

Higgs said Wednesday that he hopes Ottawa will continue to push for a global agreement on offsetting emissions between nations, because with only two per cent of the world total, Canada's climate change efforts will have little impact in isolation.

In its environmental impact assessment application, Maritime Iron said its plant would increase greenhouse gas emissions by 2.3 million tonnes, 15 per cent above the 2016 provincial total.

That would take New Brunswick past both its legislated emissions target for 2020 and a less stringent reduction target for 2030 that is modelled on Canada's Paris agreement goals.

Higgs said those targets could be "flexible, but only if a greater good can be accomplished" such as a net reduction in global emissions.

'State-of-the-art technology'

Maritime Iron says its iron-processing technology emits 40 per cent less carbon dioxide than existing technologies, so the proposed Belledune plant would displace dirtier, heavy-emitting facilities.

It also says by shipping iron ore from Quebec to Belledune for processing, instead of to China, shipping distances, and emissions from freighters, would be slashed.

And processed pig iron bound for a trading hub at the port of New Orleans would travel a shorter distance from Belledune than from existing suppliers in Russia, also reducing shipping distances and emissions.

While the B.C. LNG plant has no federal exemption based on global emissions, the provincial government there has promised it a break on carbon taxes if it meets high standards for emissions intensity compared to similar plants.

Higgs said Wednesday he'd be willing to look at a similar break for Maritime Iron.

"I could see that being argued because if you look at the technology that's being used in this plant, it is best-in-class or state-of-the-art technology," he said.

Earlier this month, New Brunswick MLAs on an all-party committee amended the government's carbon-pricing bill to say the pricing system exists "in order to facilitate the achievement" of the targets.

Targets at risk

In its application, Maritime Iron proposed that the province seek emissions reductions elsewhere in the New Brunswick industrial, transportation and electrical sectors to make up for the increases from its plant.

Existing industry players in New Brunswick argue they've already reduced their emissions in recent years, and Higgs said finding more reductions there "wouldn't be an easy task."

The province's legislated emissions goal for this year is 14.8 million tonnes, and for 2030 it's 10.7 million tonnes. It also has a second, less stringent 2030 goal, 14.1 million tonnes, tied to Canada's Paris climate plan objectives.

New Brunswick's emissions in 2017 were 14.3 million tonnes, below the legislated 2020 target and close to the 2030 Paris target.

The Belledune iron plant would employ 200 people during operations and 1,300 during a two-year construction phase.