4 years in the making, Canada releases Clean Fuel Standard draft regulations
The government of Canada published its draft regulations of the nation’s Clean Fuel Standard Dec. 18, a much-anticipated milestone since the development of the CFS was first announced four years ago.
The CFS requires reductions in carbon intensity of fuels. One way of achieving this is through higher blending of biofuels such as biobased diesel. According to Environment and Climate Change Canada (the government agency formerly known as Environment Canada), biobased diesel blending under the CFS could reach 11 percent by 2030.
The draft regulation, subject to a 75-day comment period, includes 2030 reduction targets of 12 gm CO2e/MJ for liquid fossil fuels, excluding jet fuel; biofuel sustainability criteria aligned with the U.S.’s Renewable Fuel Standard requirements; eligibility for gaseous and solid credits (up to 10 percent of annual obligation); and greater flexibility and generation of upstream and transportation-switching credits. The CFS is set to go into effect Dec. 1, 2022.
“Today’s release of the draft regulation is a critical signal to the fossil and clean fuels sectors that Canada is determined to have a leadership role in transitioning to a low carbon economy,” said Ian Thomson, president of Advanced Biofuels Canada, an association representing Canadian producers, distributors and technology developers of advanced biofuels. “Clean fuel standards are a proven approach to addressing the transportation sector’s rising emissions. Canada has a wealth of sustainable, renewable energy sources and, paired with our clean technology innovators, holds the opportunity to realize significant economic benefits from expanding our advanced biofuels sector.”
Thomson noted that Environment and Climate Change Canada also recently released a suite of policy and fiscal measures to complement the proposed CFS regulation.
Renewable Industries Canada, another Canadian association representing renewable fuels and technology producers, stated, “The draft regulations represent an important step forward in Canadian policy towards recognizing the full value of clean fuels like ethanol, biomass-based diesel, renewable natural gas, and green hydrogen in the fight against climate change,” stated “We continue to be encouraged by jurisdictions seeking to use more low carbon fuel which is a huge step forward in the continued fight against climate change.”
Organizations such as Advanced Biofuels Canada and Renewable Industries Canada have provided recommendations to the Canadian government on a variety of issues concerning the CFS, including the target and stringency for liquid fuels through to 2030, how credits are generated for low carbon fuels and how they can be traded, projections for biofuel use under the policy, and land use and biodiversity criteria, to name a few. “We are pleased to see that these recommendations were accepted by the government as it shows continued support for Canada’s growing biofuels industry,” Renewable Industries Canada stated.
Scott Lewis, executive vice president with World Energy, said, “Our biomass-based diesel delivers major reductions in greenhouse gas emissions—these reductions, and the compliance credits they generate, are is the most important product we sell. Today’s announcement of a federal Clean Fuel Standard reinforces how industry contributes to fighting climate change. California’s Low Carbon Fuel Standard proves that this kind of regulation will not only achieve carbon reductions but will also stimulate the economy. We look forward to seeing the government of Canada implement these measures.”
Andrea Kent, a board director and past president of Renewable Industries Canada, added, “The proposed Clean Fuel Standard is an exciting next chapter in Canada’s national environmental policy and will help ensure the liquid transportation fuels Canadians need have a reduced carbon footprint, all the way from production through to when used by consumers. As seen in other jurisdictions, a Clean Fuel Standard can attract and incent businesses to invest in clean fuel technologies, support increased domestic production, and ensure that more affordable and cleaner fuels, like biofuels, are available to serve consumers and preserve the planet.”
Modeling suggests Canada’s CFS could have an economic impact of up to $14 billion per year and create 8,000 jobs from the biofuels sector alone.