B.C. output-based pricing system carbon tax exemption

B.C. output-based pricing system

Beginning April 1, 2024, large industrial operations regulated by the Ministry of Environment and Climate Change Strategy are subject to the B.C. Output-Based Pricing System (B.C. OBPS). Instead of paying carbon tax on qualifying facility-use fuels and combustibles, industrial operations registered in the B.C. OBPS pay a carbon price for their regulated emissions that exceed annual limits.

The B.C. OBPS program is administered by the Ministry of Environment and Climate Change (Environment), under the Greenhouse Gas Industrial Reporting and Control Act. For guidance on the B.C. OBPS program such as qualifying, registering, paying or offsetting annual OBPS charges, see Environment’s B.C. Output-Based Pricing System webpage or contact Environment at GHGRegulator@gov.bc.ca.

This webpage provides guidance on claiming the B.C. OBPS carbon tax exemption and refunds, which are administered by the Ministry of Finance under the Carbon Tax Act. If you require further carbon tax guidance, see Contact Information below.

On this page

• The B.C. OBPS carbon tax exemption
• How to claim the carbon tax exemption
• Refunds for purchasers
• Refunds for fuel sellers

The B.C. OBPS carbon tax exemption

Effective April 1, 2024, you may claim exemption from paying carbon tax on any fuel or combustible if:

• The fuel or combustible is used by a B.C. OBPS regulated operation to produce a regulated product, or by a B.C. OBPS new entrant, and
• Greenhouse gas emissions from the fuel or combustible will be attributable to the regulated operation or new entrant

How to claim the carbon tax exemption

To claim the exemption from carbon tax, complete a Certificate of Exemption - B.C. Output-Based Pricing System Registrants (FIN 467) (PDF, 180KB) and provide it to the seller at or before the time of purchase. On this this certificate, you must provide your six-digit B.C. OBPS Regulated Operation (BORO) ID number you received when you registered for the B.C. OBPS program with Environment.

You may make additional qualifying purchases using the same certificate if the information on the certificate applies to the additional purchases.

If you make exempt facility use of fuel that you import or manufacture, or exempt facility use of combustibles, you do not have to self-assess carbon tax on the fuel or combustibles. However, you must keep records that substantiate qualifying use and provide them to us if requested.

If you claim the exemption when purchasing fuel but use the fuel for a taxable purpose, you must self-assess and remit carbon tax on the fuel at the rate that applies for the period of use. For more information, see Reporting and Paying Tax in Self-Assessing Motor Fuel and Carbon Tax (MFT-CT 006) (PDF, 180KB).

Refunds for purchasers

If you pay or self-assess carbon tax on fuel or combustibles that are used on or after April 1, 2024 for an exempt facility purpose, you may apply for a refund of the carbon tax. To claim a refund, use the Application for Refund of Carbon Tax – Purchaser of Fuel (FIN 108) (PDF, 620KB).

Refunds for fuel sellers

If you sell fuel on or after April 1, 2024 to a purchaser who claims the B.C. OBPS exemption using the exemption certificate, you may apply for a refund of the security you pay on the fuel. Keep the exemption certificate in your records, to support the non-collection of tax and your refund claim.

If you are a deputy collector or retail dealer, apply for the refund using the Application for Refund of Carbon Tax – Deputy Collector or Retail Dealer (FIN 143) (PDF, 650KB).

If you are a carbon tax collector, claim the security refund using your carbon tax collector return (CTA) for the reporting period that includes the exempt sale. On your CTA return, report the following by fuel type:

• The total volume of fuel sold in B.C., including the volume of fuel sold to B.C. OBPS exemption claimants, on Line 1, Total Volume of Fuel Sold in B.C.
• The volume of fuel sold to B.C. OBPS exemption claimants—on Line 3, Non-taxable Volume Sold within B.C; and on Line 6, Volume Sold in the Reporting Period on which Security was paid

Note: Line 3 of the CTA return will be revised to include a new line for non-taxable sales to regulated operations.