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Government of Canada to work with provinces, territories, and stakeholders to develop a clean fuel standard

The Government of Canada will consult with provinces and territories, Indigenous peoples, industries, and non-governmental organizations to develop a clean fuel standard. The standard would require reductions in the carbon footprint of the fuels supplied in Canada, based on lifecycle analysis. The overall objective of a clean fuel standard would be to achieve annual reductions of 30 megatonnes (Mt) of GHG emissions by 2030.

The approach would not differentiate between crude-oil types produced in or imported into Canada. These consultations would inform the development of a regulatory approach under the Canadian Environmental Protection Act (CEPA).

Currently, the average renewable-fuel blending in Canada’s fuels is more than 7% ethanol in gasoline, which exceeds the 5% level set out in the Renewable Fuels Regulations, and about 2% renewable content in diesel fuel, which meets the regulatory level.

A clean fuel standard would be flexible, and it would promote the use of clean technology, lower carbon fuels, and promote alternatives such as electricity, biogas, and hydrogen.

A variety of regulatory approaches are used throughout the world to reduce the emissions related to the use of fuel. The provinces of Ontario and Saskatchewan have been Canadian leaders with effective renewable-fuels requirements, since 2007.

Other provinces have followed, and they have adopted renewable-fuel mandates under which a minimum amount of renewable fuel is required to be blended into gasoline or diesel.

Some jurisdictions (e.g., Alberta, Ontario) also require that the renewable fuels utilized meet a specific greenhouse gas (GHG) performance standard. British Columbia has led by implementing low-carbon fuel standards that require a reduction in the lifecycle GHG-emissions intensity of the fuels supplied in a given year.

A clean fuel standard would address a broad suite of fuels, which could include liquid fuels (e.g., gasoline, diesel, and heavy-fuel oil); gaseous fuels (e.g., natural gas and propane); and solid fuels (e.g., petroleum coke).

The clean fuel standard would set requirements to reduce the lifecycle carbon intensities of fuels supplied in a given year, based on lifecycle analysis. By contrast to renewable-fuel mandates, this approach would not prescribe the particular low-carbon fuel or technology that must be used; instead, it would focus on emissions reduction. The clean fuel standard would result in decreased emissions while minimizing compliance costs.

This approach would foster the deployment of a broad range of lower-carbon fuels and alternative technologies such as electricity, biogas, hydrogen, and renewable fuels, the government said.

Carbon-intensity standards will be set to reduce the lifecycle carbon intensities of all fuels supplied, based on lifecycle analysis. The standards could be set at the facility level, at a sector-wide average, or set on some other basis.

The standard will be designed to provide maximum flexibility to fuel suppliers, and it may include provisions to take into account regional differences, similar to those that currently exist under the Renewable Fuels Regulations.

Environment and Climate Change Canada will publish a discussion paper in February 2017 to help guide consultations consisting of meetings, workshops, and technical-working groups that will help inform the development of Canada’s clean fuel standard.

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