Reducing greenhouse gas emissions from refrigeration systems, version 1.0

Federal offset protocol
Version 1.0
February 2023

Foreword

Canada’s Greenhouse Gas (GHG) Offset Credit System is established under Part 2 of the Greenhouse Gas Pollution Pricing Act (GGPPA), to provide an incentive to undertake projects that result in domestic GHG reductions that would not have been generated in the absence of the project, that go beyond legal requirements and that are not subject to carbon pollution pricing mechanisms.

Canada’s GHG Offset Credit System consists of:

• The Canadian Greenhouse Gas Offset Credit System Regulations (the Regulations) which establish the system, implement operational aspects and set general requirements applicable to all project types;
• Federal offset protocols, included in the Compendium of Federal Offset Protocols (the Compendium), each containing requirements for project implementation and methods for quantifying GHG reductions for a given project type; and
• The Credit and Tracking System (CATS) to register offset projects, issue and track offset credits, and share key information through a public registry.

Only projects following a federal offset protocol included in the Compendium and meeting all requirements outlined in the Regulations can generate offset credits under the Regulations.

1.0 Introduction

Emissions of hydrofluorocarbons (HFCs) from industrial and commercial refrigeration or air conditioning systems are caused by releases during equipment installation, when charging equipment with refrigerant, either initially or when re-filling (top-up), and leaks from equipment operations. Lowering the global warming potential (GWP) of refrigerants used in these systems in Canada ensures that the associated impacts on climate change from unavoidable equipment leaks are minimized to the extent possible.

The federal offset protocol for Reducing Greenhouse Gas Emissions from Refrigeration Systems is intended for use by a proponent undertaking a project to transition away from refrigerants with high GWP values in their commercial and industrial refrigeration or air conditioning systems, in order to generate offset credits under the Canadian Greenhouse Gas Offset Credit System Regulations (Regulations). The requirements contained in this protocol are part of the Regulations and must be read in conjunction with provisions in the Regulations.

The proponent must follow the methodology and requirements contained in this protocol to quantify and report greenhouse gas (GHG) emission reductions generated from the following eligible project activities:

1. retrofitting a pre-existing refrigeration or air conditioning system to use an eligible refrigerant; or,
2. installing a new refrigeration or air conditioning system containing an eligible refrigerant.

Additional GHG emission reductions can be generated by destroying HFCs contained within high-GWP refrigerant from a pre-existing refrigeration or air conditioning system that is being retrofitted or replaced in 1) or 2) above, respectively. HFC destruction must occur within Canada.

GHG emissions reductions under this protocol cannot be generated from destroying, reducing or replacing ozone-depleting substances (ODS) contained in high-GWP refrigerant.

This protocol is designed to ensure that, together with requirements in the Regulations, the project generates GHG emission reductions that are real, additional, quantified, verified, unique and permanent. The protocol is also developed in accordance with the principles of ISO 14064-2:2019 Greenhouse gases – Part 2 – Specification with guidance at the project level for quantification, monitoring and reporting greenhouse gas emission reductions or removal enhancements to ensure reported GHG emission reductions are relevant, complete, consistent, accurate, transparent, and conservative.

2.0 Terms and definitions

Act

means the Greenhouse Gas Pollution Pricing Act (GGPPA).

Absorption

for the purposes of this protocol, means a refrigeration cycle with a fluid absorbent and a fluid refrigerant that has a GWP equal to zero that is part a refrigeration system.

Authorized Destruction Facility

means a facility located in Canada that is authorized by the government of the province or territory in which the facility is located to receive used refrigerants for the purpose of destroying HFCs.

Authorized Reclamation Facility

means a facility located in Canada that is authorized by the government of the province or territory in which the facility is located to receive used refrigerants for the purpose of reclaiming HFCs.

Eligible Refrigerant

means a refrigerant used in the project scenario with either a GWP lower than the value in column 2 of Table 2 for the corresponding refrigeration system type in column 1 of Table 2, or if applicable, a GWP lower than the GWP limit imposed by the province or territory in which the project site is located for refrigerants contained within refrigeration systems, whichever is lower.

Global Warming Potential (GWP)

means a metric representing the ability of a greenhouse gas (GHG) to trap heat in the atmosphere compared to carbon dioxide (CO₂), as provided in Column 2 of Schedule 3 to the Act.

High-GWP Refrigerant

means a refrigerant that contains one or more HFCs and has a GWP equal to or higher than the value in Column 2 of Table 2 for the corresponding refrigeration system type in column 1 of Table 2, or if applicable, a GWP equal to or higher than the relevant provincial or territorial GWP limit for refrigerants contained within refrigeration systems where the project is located, whichever is lower.

Ozone-Depleting Substance (ODS)

means all substances identified in Parts 1, 2 and 3 of the Ozone- depleting Substances and Halocarbon Alternatives Regulation (ODSHAR).

Pre-existing refrigeration system

means a refrigeration system that has been operating at the project site for more than 3 years prior to the project start date, and will be retrofitted to use an eligible refrigerant, or replaced by a new refrigeration system that uses an eligible refrigerant.

Project Site

means the location of a single commercial or industrial facility at which one or more refrigeration systems are operated in the project scenario, as applicable.

Refrigerant

means a single-component refrigerant, refrigerant blend or refrigerant alternative that is used in a refrigeration system.

Refrigeration system  

means a commercial or industrial system providing refrigeration or air conditioning that is made up of one or more pieces of equipment.

Regulations

means Canadian Greenhouse Gas Offset Credit System Regulations.

3.0 Baseline scenario

3.1 Baseline conditions

One of the following conditions must apply in the baseline scenario in order for the project to be eligible under this protocol.^{Footnote 1}

1. There is a pre-existing refrigeration system of a type identified in Table 1 at the project site, and no regulation or legal requirement exists to either replace the pre-existing refrigeration system, or to change the refrigerant or any piece of equipment within the pre-existing refrigeration system (system retrofit); or
2. There is no pre-existing refrigeration system at the project site where one or more new refrigeration systems will be installed.

Definitions are from ODSHAR, except Commercial AC and Heat Pumps which are adapted from United Nations Environment Program’s Ozone Secretariat.

4.0 Project scenario

4.1 Project conditions

One of the following project conditions must apply in the project scenario in order for the project to be eligible under this protocol.^{Footnote 2}

1. An eligible refrigerant replaces a high-GWP refrigerant in one or more pre-existing refrigeration systems of a type listed in Table 1 at the project site through a system or systems retrofit, or
2. One or more new refrigeration systems of a type listed in Table 2 that contain an eligible refrigerant are installed at the project site.

The refrigeration system used in the project scenario must not have a cooling capacity that is less than 90% of the cooling capacity of the pre-existing refrigeration system, if one exists.

4.2 Eligible refrigerants

To be eligible for use in the project scenario, refrigerants must have a GWP lower than the value applicable to the corresponding refrigeration system type as set out in Table 2 below or if applicable, lower than the provincial or territorial GWP limit.

In addition, when a pre-existing refrigeration system is being retrofitted or replaced, the eligible refrigerant used in the project scenario must have a GWP lower than the GWP of refrigerant contained within the pre-existing refrigeration system.

Eligible refrigerants must not consist in whole, or in part, of any ozone-depleting substance (ODS).

Eligible refrigerants in whole or in part, must not have been previously used in another refrigeration system owned or operated by the proponent.

4.3 Eligible project activities

Eligible project activities include:

1. The retrofit of a pre-existing refrigeration system of a type listed in Table 1 to utilize an eligible refrigerant, including the extraction of all high-GWP refrigerant from the pre-existing refrigeration system and either:
   1. destruction of the high-GWP refrigerant’s HFCs at an Authorized Destruction Facility,^{Footnote 3} or
   2. reclamation of the high-GWP refrigerant’s HFCs at an Authorized Reclamation Facility.
2. The purchase and installation of a new refrigeration system of a type listed in Table 2 that contains an eligible refrigerant and does not utilize fossil fuel as a direct source of heat or power,^{Footnote 4} including, if applicable, the extraction of all high-GWP refrigerant from a pre-existing refrigeration system being replaced by the new system, and either:
   1. destruction of the high-GWP refrigerant’s HFCs at an Authorized Destruction Facility, or
   2. reclamation of the high-GWP refrigerant’s HFCs at an Authorized Reclamation Facility.

5.0 Additionality

5.1 Legal additionality

GHG emission reductions generated by the project must not occur as a result of federal, provincial or territorial regulations, legal requirements, municipal by-laws, or any other legally binding mandates.

Federal and provincial regulations exist in Canada that limit refrigerant GWP contained in specific types of new refrigeration systems. The subject of regulations may vary by jurisdiction and can apply to either the manufacture, import, distribution, sale or installation of new refrigeration systems or equipment, all of which are considered to be relevant GWP limits with respect to baseline scenario quantification.  For jurisdictions in which both a federal and a provincial or territorial GWP limit exist, the lowest GWP limit shall apply.

If at any time after project registration the GHG emission reductions generated by the project are a result of project activities that are required by law or the result of a legal requirement, the GHG emission reductions can only be quantified, and offset credits can only be issued, up to the date immediately preceding the date on which the law or the legal requirement comes into force.

5.2 Provincial or federal pricing mechanisms for GHG emissions

Any emission sources that are included in a facility’s GHG emissions total reported under a federal, provincial or territorial pricing mechanism for GHG emissions are not eligible for offset credits. This includes GHG emissions from industrial refrigeration and air conditioning systems at covered facilities under the federal Output-Based Pricing System.

6.0 General requirements

6.1 Project start date

The start date of a project corresponds to the first day on which a retrofitted refrigeration system or a new refrigeration system installation is operated to provide refrigeration or air conditioning services at the project site.

6.2 Crediting period renewal

A project implemented under this protocol is not eligible for crediting period renewal.

6.3 Aggregation

Project activities that occur at multiple project sites can be registered as a group of projects within an aggregation of projects. Multiple project activities at a single project site form a single project and cannot be registered as an aggregation of projects.

6.4 Project location and geographic boundaries

A proponent must document and report the location and geographic boundaries of the project site and submit a site plan.

The site plan must show where all equipment associated with refrigeration systems is located at the project site. If applicable, the site plan must show where a refrigeration system is situated in relation to other refrigeration systems, and whether those other refrigeration systems are either included in, or excluded from, the project.

The geographic boundary of the project site cannot change after the first reporting period. However, project activities can expand within the project site’s geographic boundary to include additional refrigeration system retrofits or new refrigeration system installations at a later time and still be part of a registered project, provided that all relevant requirements are met. Any changes to the site plan must be communicated as specified in the Regulations.

6.5 Environmental and social safeguards

All refrigerants must be properly handled according to the environmental code of practice, regulations or standards that apply to the handling of refrigerants in the jurisdiction in which the project site is located.

The proponent must also ensure the project activities comply with any building codes or other legal requirements, including for the use of flammable or toxic refrigerants that may pose a human health risk in the jurisdiction in which the project site is located.

7.0 Project GHG boundary

The project GHG boundary (Figure 1) contains the GHG sources, sinks, and reservoirs (SSRs) that must be assessed by the proponent in order to determine the GHG emission reductions generated by the project activities relative to the baseline scenario.

Figure 1: Illustration of the project GHG boundary

Table 3 provides additional details on the relevant SSRs identified for the baseline and project scenarios, as well as justification for their inclusion or exclusion in the quantification of emission reductions. The proponent must quantify GHG emissions based on the “included” SSRs that are relevant to the specific activities taking place in the baseline and project scenarios.

Relevant GHGs in this protocol are carbon dioxide (CO₂) and all hydrofluorocarbons (HFCs) listed in Schedule 3 to the Act.

8.0 Quantification methodology

This section contains the quantification methodology that must be followed to calculate baseline and project scenario GHG emissions, which are subsequently used to calculate the GHG emission reductions generated by the project.

Raw data must be converted to align with the units presented in the quantification methodology, if necessary (see Section 8.4 for a tabulated summary).

Baseline scenario GHG emissions are the GHG emissions that would have occurred in the absence of the project, as quantified from SSRs within the project GHG boundary. Project scenario GHG emissions are the actual GHG emissions that occur from SSRs within the project GHG boundary. The GHG emission reductions generated by the project are quantified by deducting the project scenario GHG emissions from the baseline scenario GHG emissions as outlined in Section 8.3.

Both baseline and project scenario GHG emission calculations must include all the GHG emissions that occurred during the reporting period and must include sub-totals in tonnes of CO₂ equivalent (t CO₂e) for each full or partial calendar year to support issuance of the resulting offset credits by calendar year.

8.0.1 Refrigerant GWP calculations

Emission reductions from the project can only be generated by reducing emissions of GHGs that are listed in Schedule 3 to the Act. Proponents must use Equation 1 below to determine refrigerant GWP using the GWP values of each chemical component in the refrigerant as listed in Schedule 3 to the Act.^{Footnote 5}   For any chemical component not listed in Schedule 3 to the Act, the GWP value is zero.

Equation 1: Refrigerant GWP calculation

Equation 1 must be used to determine GWP values for the baseline scenario refrigerant (GWP_BRefrig) in Equation 2 except where a provincial or territorial GWP limit or the value from Table 5 must be used.

Equation 1 must also be used to determine GWP values for project scenario refrigerant (GWP_PRefrig) in Equation 4.

8.1 Baseline scenario GHG emissions

The proponent must use the following methodology to quantify the baseline scenario GHG emissions for each full or partial calendar year covered by the reporting period, based on the included SSRs outlined in Table 3.    

To calculate annual emissions from a refrigeration system used in baseline scenario, the proponent must use Equation 2, which is derived from the methodology in Chapter 7 of the 2006 IPCC Guidelines for National Inventory Reports (PDF).

Equation 2: Annual GHG emissions for a baseline scenario refrigeration system (SSR B6 and SSR B8)

Default values to be used in Equation 2 above for refrigerant releases from each refrigeration system type are found in Table 4^{Footnote 6} below.

When there is no pre-existing refrigeration system:

1. the same type of refrigeration system that is installed in the project scenario used for baseline scenario emissions quantification if the new refrigeration system is listed is in Table 1; or,
2. a chiller must be used as the refrigeration system type for baseline scenario emissions quantification if an absorption or adsorption chiller is installed in the project scenario.
3. a heat pump must be used as the refrigeration system type for baseline scenario emissions quantification if an absorption or adsorption heat pump is installed in the project scenario.

For 1, 2 and 3 above, the proponent must select and justify a specific refrigerant and charge size for the refrigeration system type used to quantify baseline scenario GHG emissions as per section 8.1.2.

8.1.1 Baseline scenario refrigerant GWP value

The proponent must use the appropriate GWP value for baseline refrigerant GWP (GWP_BRefrig) in Equation 2 for annual GHG emissions quantification for a baseline scenario refrigeration system for each project activity, as follows:

1. System retrofit – The GWP value of pre-existing refrigeration system’s high-GWP refrigerant is used as the baseline refrigerant GWP, as calculated in Equation 1.
2. New system installation:
   1. When a GWP limit applies to the new system being installed, baseline scenario emissions are quantified using either the corresponding GWP outlined in Table 5 below, or the applicable provincial or territorial GWP limit, whichever is lower. This applies whether or not there is a pre-existing system.
   2. When no GWP limit applies to the new system being installed and there is a pre-existing refrigeration system, the GWP value of pre-existing refrigeration system’s high-GWP refrigerant is used as the baseline refrigerant GWP.
   3. When no GWP limit applies to the new system being installed and there is no pre-existing refrigeration system, the baseline refrigerant GWP for the refrigeration system type used to quantify baseline emissions is the corresponding value in Table 5 below.   

If at any time during the crediting period there is a change in the ODSHAR GWP limit or the provincial or territorial GWP limit applicable to the new refrigeration system being installed, the proponent must use the new GWP limit in the quantification of baseline scenario emissions from the day upon which the new GWP limit comes into force.

When a chiller is the new refrigeration system installed in the project scenario, the proponent must use 750 GWP for quantifying baseline scenario refrigeration system emissions in Equation 2 starting January 1, 2025 which is when the ODSHAR GWP limit for chillers comes into force. Prior to January 1, 2025, the proponent can use a GWP of 1400 to quantify baseline scenario refrigeration system emissions in Equation 2 when a new chiller, absorption chiller or adsorption chiller refrigeration system is installed in the project scenario.

8.1.2 Refrigerant charge size

When a pre-existing refrigeration system is retrofitted or replaced by a new system installation, proponents must use the actual charge size (Q) of the pre-existing refrigeration system for quantification of baseline scenario refrigeration system emissions in Equation 2.  In order to ensure baseline scenario refrigeration system emissions are conservative, charge size cannot be more than 90% of the manufacturer specifications when project activities include HFC destruction.

For new system installations where there is no pre-existing refrigeration system, baseline charge size, Q, must be justified by the proponent based on the charge size of refrigerant needed for the refrigeration system identified for use in the baseline scenario to achieve the same cooling capacity as the refrigeration system used in the project scenario.

8.1.3 Refrigerant disposal

Halocarbon venting is prohibited across Canada and high-GWP refrigerant can only be disposed of through reclamation or destruction under this protocol.

When high-GWP refrigerant is removed from a pre-existing refrigeration system and sent to an Authorized Reclamation Facility to be reclaimed, proponents must use a 99% value for Refrigerant Recovery Efficiency (RRE = 99%) in Equation 2.

If the proponent can demonstrate that the high-GWP refrigerant from a pre-existing refrigeration system has been destroyed at an Authorized Destruction Facility by means of a destruction certificate and chain of custody records, then RRE = 0 in Equation 2.

HFCs can only be destroyed once at the beginning of the project with emissions reductions spread over the crediting period. HFCs are considered to be destroyed at the time they are sent for destruction off-site after being extracted from the pre-existing refrigeration system on-site.

Destruction of HFCs from sources other than high-GWP refrigerant extracted from the pre-existing refrigeration system used in the baseline scenario are not eligible for generating emission reductions under this protocol.

8.1.4 Baseline scenario GHG emissions from a calendar year

Annual GHG emissions of baseline scenario refrigeration systems calculated in Equation 2 must then be adjusted using Equation 3 below to match the length of each full or partial calendar year covered by the reporting period.

Equation 3: Baseline scenario GHG emissions for a calendar year covered by the reporting period

8.2 Project scenario GHG emissions

The proponent must use the following methodology to quantify project scenario GHG emissions for each full or partial calendar year covered by the reporting period, based on the SSRs outlined in Table 3.

To calculate annual GHG emissions from a refrigeration system used in the project scenario, the proponent must use Equation 4, which is derived from the methodology in Chapter 7 of the 2006 IPCC Guidelines for National Inventory Reports.

Equation 4: Annual GHG emissions from a project scenario refrigeration system (SSR P4 or P5, SSR P6 and SSR P8)

For system retrofit project activities, installation losses (IL) in the project scenario represent any releases that might occur when extracting high-GWP refrigerant from a pre-existing refrigeration system and re-charging with the eligible refrigerant.

Annual GHG emissions from refrigeration systems used in the project scenario calculated in Equation 4 must then be adjusted using Equation 5 below to match the length of any full or partial calendar year covered by the reporting period.

Equation 5: Project scenario GHG emissions during a calendar year covered by the reporting period

8.3 GHG emission reductions

The GHG emission reductions (ER), determined in accordance with Equation 6, correspond to the GHG reductions generated by the project, determined in accordance with section 20 of the Regulations.

Equation 6: GHG emission reductions

8.4 Summary of quantification parameters

Tables 6.1 to 6.6 provide a summary of quantification equations and parameters for each equation as well as details regarding measurement and calculation frequency.

9.0 Measurement and data

9.1 Quality assurance and quality control

Quality Assurance / Quality Control (QA/QC) procedures must be implemented to ensure that all calculations have been made correctly and can be verified.

9.2 Missing data

In the event that data is missing, data may not be substituted using alternative estimation methods.

10.0 Records

In addition to the record keeping requirements in the Regulations, the proponent must retain records that support the implementation of a project, including invoices, contracts, refrigeration system equipment maintenance records, calculations, databases, photographs and chain of custody records for HFC transportation, at the location and for the period of time specified in the Regulations. These records apply to refrigeration system equipment at the project site and high-GWP refrigerant sent for disposal off-site.

Additional records include:  

• Manufacturer specifications regarding cooling capacity, charge size, installation procedures, operating conditions and/or maintenance requirements for all refrigeration system equipment included in the project.
• Identification of the refrigerant service provider, their service contract and description of their qualifications, or if a company, minimum qualifications of the company’s refrigerant service technicians.
• Contracts, invoices or certificates of completion from a contractor conducting system retrofit or new system installation that also indicate when retrofitted systems or new systems begin operating.
• In instances where the province or territory has set a GWP limit for refrigeration systems that differ from the values in Table 2, supporting documentation regarding this limit.
• Documentation showing the complete chain of custody of high-GWP refrigerant from the point at which it is extracted from a pre-existing refrigeration system to the point at which it arrives at an authorized reclamation facility or authorized destruction facility. The information includes:
  • Names, addresses and contact information of all parties in possession of high-GWP refrigerants sent for reclamation or destruction, if applicable.
  • The mass of high-GWP refrigerant in kilograms at each transfer in the chain of custody.
  • Details on the facility’s authorization from the relevant provincial or territorial government to handle, reclaim and/or destroy HFCs.
• For System Retrofit project activity:
  • Evidence to show which high-GWP refrigerants have been used in the refrigeration system for a minimum of 3 years preceding the system retrofit.
  • Supporting documentation to demonstrate the last day the pre-existing refrigeration system was in operation and the first day on which the retrofitted refrigeration system using an eligible refrigerant was used for refrigeration or air conditioning purposes.
• For New System Installation project activity:
  • Supporting documentation to demonstrate the first day on which refrigeration or air conditioning is provided at the project site from a new refrigeration system installation.
  • Identification of the manufacturer and the retailer from which new refrigeration system was purchased.
  • Date of purchase of new refrigeration system and if pre-charged, identification of the refrigerant contained within it at that time.
• For new system installation projects where there is no pre-existing equipment, the proponent must keep any records that provide justification for the selection of a baseline refrigeration system.

11.0 Reporting requirements

Beyond what is specified in the Regulations, proponents must include the following in a project report:

• The dates, duration and reason for each instance in which a refrigeration system used in the project scenario is not operating for a period of more than 10 consecutive days within a calendar year covered by the reporting period.
• The name and location of the Authorized Reclamation Facility or Authorized Destruction Facility, as applicable.
• For the first project report that includes GHG emission reductions resulting from destruction of HFCs in high-GWP refrigerant from a pre-existing refrigeration system, the amount of HFCs extracted from the pre-existing refrigeration system and the HFC destruction certificate that indicates the mass and type of each HFC in high-GWP refrigerant that has been destroyed, if applicable.
• The HFC destruction certificate for the first report for an aggregation of projects for which a new project that includes destruction of high GWP refrigerant from a pre-existing refrigeration system in baseline scenario GHG emissions has been added during the crediting period of the aggregation.