Carbon Levy - FAQ for Producers in Alberta

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 What is the carbon levy?
  • The carbon levy will be included in the price of all fuels that emit greenhouse gases when combusted. These includes transportation and heating fuels such as diesel, gasoline, natural gas and propane. It will not apply directly to consumer purchases of electricity.
  • Starting January 1, 2017, the carbon levy will be applied to fuels at a rate of $20/tonne of CO2 emissions. One year later, the levy will increase to $30/tonne.
  • To find out more about the carbon levy and how the funds will be used, refer to the Climate Leadership Plan.
How will the carbon levy impact agricultural operations?
  • Marked fuels used by farmers in farming operations (diesel, gasoline) are exempt from the carbon levy.
  • Other fossil fuels such as natural gas, propane, heating oil and coal are not exempt from the carbon levy.
What can producers do to improve energy efficiency and lower the impacts of the carbon levy?
  • In December 2017, $1.4 billion in provincial Climate Leadership Plan funding was announced to continue the transition to a diversified, low-carbon economy. More than $81 million over the next four years is now being made available for the agriculture sector through the Climate Leadership Plan and the federal government. For more information on the Farm Energy Agri-Processing (FEAP) Program, click here.
How will marked fuel exemptions to the carbon levy be identified?
  • Eligibility criteria for both the carbon levy exemption and Alberta Farm Fuel Benefit (AFFB) program fuel tax exemption are the same.
  • The AFFB program registration number will also be used for carbon levy exemption certificate.
  • The carbon levy exemption is only on marked fuel (diesel and gas) used for farming operations. The levy will apply to propane, aviation fuel and heating fuel.
  • This information is also summarized in a radio interview on Call of the Land.
How will the carbon levy on non-exempt fossil fuels affect my operations?
  • Since farm operations vary widely, the effect of the carbon levy will be unique to individual operations.
  • Commonly used fossil fuels subject to the carbon levy are gasoline and diesel used for contracted transportation and hauling, and natural gas used for heating. The Alberta Climate Change Office has provided a summary of the impact of the carbon levy on each type of fuel.
Where can I find more information?
For the most current information, please refer directly to the Alberta Climate Leadership Plan.
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For more information about the content of this document, contact Tom Goddard.
This document is maintained by Laura Thygesen.
This information published to the web on December 15, 2016.
Last Reviewed/Revised on February 22, 2018.