Biomethane Contracts and Qualified Retail Dealers

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Biomethane Contracts and Qualified Retail Dealers

The amendments to Section 22.1 of the Carbon Tax Regulation, B.C. Reg. 125/2008, aim to clarify the definitions and reporting requirements related to biomethane contracts and qualifying retail dealers in British Columbia. These changes reflect an effort to improve the regulatory framework governing biomethane and its integration with natural gas, thus supporting the province’s objectives in reducing greenhouse gas emissions and promoting sustainable energy sources.

One notable amendment concerns the definition of “biomethane contract.” The regulation repeals paragraph (b) and introduces a new framework for specifying the notional biomethane content. The revised definition now includes two options: either the contract specifies the notional biomethane content directly or leaves it to the discretion of the qualifying retail dealer to determine this content in advance of each reporting period. This shift recognizes the need for flexibility in managing biomethane content while ensuring accurate reporting and accountability. Additionally, the definition of “qualifying retail dealer” has undergone a significant revision. Previously defined in a more limited context, the new definition expands the criteria for what constitutes a qualifying retail dealer. It now includes those who purchase or manufacture biomethane and blend it with natural gas for sale, those who enter agreements with third parties for blending, and those who purchase a blend of natural gas and biomethane.

A new section, 22.11, has been introduced, mandating that qualifying retail dealers report the notional biomethane content to the British Columbia Utilities Commission before each reporting period. This requirement ensures that the regulatory body receives timely information about biomethane content, improving transparency and enabling better oversight of the biomethane market. Moreover, amendments to Section 22.2 highlight the reporting of biomethane supplied under a contract. The new wording clarifies that qualifying retail dealers must report any biomethane purchased or manufactured within the reporting period or the 24 months preceding it.

Section 22.4 has been revised to redefine the refund amount payable to qualifying retail dealers. The refund, as outlined, will be based on the biomethane credits provided to qualifying purchasers during the reporting period, calculated based on the tax remitted for sales. This change aims to streamline the refund process and ensure that qualifying retail dealers are adequately compensated for their contributions to the biomethane market. Further amendments to Section 22.6 require qualifying retail dealers to maintain detailed records related to the biomethane they purchase or manufacture. These records must include the total amount of biomethane blended with natural gas by a third party, the total amount of the blend purchased, and the total amount of biomethane sold within the reporting periods.

By clarifying definitions, improving reporting requirements, and establishing comprehensive record-keeping practices, the amendments aim to support the growth of the biomethane market.

British Columbia (210/2024) July 15, 2024