Come by Chance refinery warns carbon tax could shut it down

The manager of North Atlantic Refining Limited (NARL) is warning that the federal government's mandate for a price on carbon could put it out of business.

Dan Harris says margins are already tight at the Come by Chance refinery, so adding extra costs would make operating it impossible.

"With the carbon tax the way it's written, if it's based on the total crude that we run, it will put us under," he told reporters Friday.

• 'Only the strongest will survive,' says refinery manager

"Today we're really not putting much money in the bank at all," he said.

The federal government has told all provinces they must put a price on carbon, rising to $50 a tonne by 2022.

Harris estimatesthat would cost the refinery about $50 million a year a cost it can't pass on to its customers.

Only 10 per centof the fuel the refineryproduces is used in Newfoundland and Labrador, as most of it is exported to the United States, where the refineries it competes against don't have to pay similar costs.

The refinery is facing other financial pressures as well,laying off more than 100 workersto tackle shrinking margins.

Harris said NARLis committed to reducingoutput of greenhouse gases.

In the last two years, the refinery has reduced emissions by 17 per cent, but unlike refineries elsewhere it doesn't have access to cleaner, cheaper natural gas to help in the refining process.

'Heck of a lotcheaper' option: minister

Minister of Environment and Climate Change Perry Trimpersaid he's aware of the refinery's unique situation, and the agreement signed with Ottawa allows a different option.

Trimper said the refinery will have caps on the emissions it puts out, if it doesn't meet those targets it will have to pay into a provincial innovation fund.

That money will be invested into other projects to reduce pollution and help the province meet its targets.

"It will be a heck of a lotcheaperthan just having a tax applied to everytonneof greenhouse gas emissions that you have," he said.

Trimper said those targets and penalties are stillbeing developed for the refinery and other big industrial polluters in the province.