How industrial carbon pricing works in Canada
The industrial carbon pricing system is designed to get major industries — like steel, cement, oil and gas — to lower their emissions over time.
The system sets a threshold for how emission-intensive a company's operations can be — that is, the amount of carbon emitted for a specific amount of steel, cement or fuel that is produced.
If a company exceeds that threshold, it has to pay by buying credits or paying the government to account for their extra pollution. If a company produces less carbon pollution than is allowed, it will profit by having surplus credits to sell.
Over time, the threshold will get more stringent — meaning companies have to gradually reduce the amount of carbon emissions for the products they make. They can do this in various ways: using renewable energy to power their facilities, burning cleaner fuels,