New carbon fees proposed for existing buildings in Metro Vancouver

New carbon fees proposed for large residential and commercial buildings in Metro Vancouver

Burnaby towers in Metrotown (background) and Brentwood (foreground). (StandbildCA/Shutterstock)

The operating costs of large residential and commercial buildings — especially older structures — across Metro Vancouver could increase starting towards the end of this decade from a new cost input: a new regionally-imposed annual excess carbon fee.

The Climate Action Committee of Metro Vancouver Regional District is proposing to initiate an annual registration and reporting fee for greenhouse gas (GHG) emissions of $500 per existing building.

Additionally, there would be an annual emissions fee of $350 per tonne of carbon dioxide from fossil-based natural gas combustion, which would be applied on emissions that exceed a building’s emissions limit.

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Both annual fees would apply to existing large residential and commercial buildings with over 25,000 sq ft of total building floor area. According to the regional district, this currently covers about 9,000 buildings, representing less than 2% of the region’s overall number of buildings, and 35% of all building-related greenhouse gas emissions.

The reporting requirements would be phased in, starting with office and retail buildings of over 100,000 sq ft in total building floor area in 2026, and then expanding to more building types and sizes down to 25,000 sq ft until 2028.

The annual excess emissions fees would start in 2028. Building owners and operators could pass such added annual costs to building users — residents and businesses.

The idea is to have building owners submit information each year on their building’s emissions, which would encourage them to make retrofits to improve building systems and operating strategies. After making the initial capital costs, building owners could see reduced operating costs over time from having more efficient building systems.

The initial emissions limits are proposed at 25 kg per carbon dioxide emitted per square metre for office buildings, and 14 kg per carbon dioxide emitted per square metre for retail buildings. The initial limits for other types of buildings, such as residential uses, will be determined at a later date following public consultation.

It is also noted that the initial and final emissions limits will exclude the inputs of cooking and district energy systems. As well, buildings that use renewable natural gas — not fossil-based natural gas — will see zero emissions in their excess emissions calculations, at least initially.

By 2045, the emissions limit for all building types will be lowered to zero emissions to meet the 2050 climate goal of zero-emission buildings.

The regional district anticipates more building owners will make the necessary steps to reduce their emissions over the next two decades. Currently, space and water heating equipment is replaced every 15 to 30 years, and upgrades on the building envelope — the building’s exterior for insulation considerations — are conducted every 30 to 50 years.

“Buildings last a long time, and decisions made today will impact building GHG emissions for decades,” reads the Climate Action Committee’s report.

“Given these long replacement cycles, it is critical to ensure that retrofits consider a long term view, and maximize GHG reductions and energy savings.”

The regional district states its proposal for new excess carbon fees on large buildings across all 23 jurisdictions in Metro Vancouver builds and expands on similar municipal policies enacted within the City of Vancouver, following a decision by the previous makeup of Vancouver City Council in July 2022 to require reporting and GHG reduction requirements for existing office and retail buildings with a total building floor area of over 100,000 sq ft.

“Metro Vancouver staff will continue working with member jurisdictions to develop a harmonized region-wide approach that addresses additional building types and sizes. Metro Vancouver and the City of Vancouver’s harmonized approach would also complement pending provincial requirements that are expected to require all new and replacement space and water heating equipment in BC to be at least 100% energy efficient after 2030,” continues the report.

“Metro Vancouver and City of Vancouver’s regulatory approach would go further and track the GHG emissions from the equipment at a building-level while encouraging a shift to zero-emission technology.”

After further public consultation, the board of directors for Metro Vancouver Regional District will make the final decision on the new policies and fees.

In late 2023, the regional district also approved a controversial strategy to significantly increase the development cost charges (DCCs) associated with new building developments to help fund multi-billion dollar utilities projects over the coming decades.

And in Spring 2023, the provincial government further elevated the green building standards of the BC Building Code, requiring 20% better energy efficiency for most new buildings across British Columbia.

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