Canada delays rollout of clean fuel standard

Source: By Argus Meda • Posted: Tuesday, July 24, 2018

Canada’s government has decided to push back the start of an ambitious program to reduce greenhouse gas (GHG) emissions from its use of fossil fuels in transportation, industries and buildings.

The environment ministry said yesterday it needs more time to develop its Clean Fuel Standard (CFS), a measure that aims to cut GHGs by 30mn metric tonne/yr by 2030. The ministry now expects work on the regulations to last into 2020 and 2021. It had originally planned to finish them next year.

“Canada’s updated approach for the Clean Fuel Standard will ensure it is developed in a way that supports the transition to lower carbon fuels while also supporting Canada’s competitiveness,” Canadian environment minister Catherine McKenna said.

The announcement included some significant changes to the draft CFS proposal shared in December. The government has decided to implement the liquid fuels portion first, followed by the regulations for gaseous and solid fuels. Compliance would begin in 2022 for liquid fuels and the following year for gaseous and solid fuels.

“While the delayed timeline is disappointing, it was not unexpected given the complexity of the CFS approach and the pace at which the process has moved to date,” Advanced Biofuels Canada president Ian Thomson said.

Thomson also said he supported the decision to advance a liquid-only regulation first, as it provides “greater potential to align with established regulatory designs and establish a more precise market signal for advanced biofuels use.”

He cited the low-carbon fuel standards of British Columbia, Oregon and California as examples of existing programs for possible alignment. All three cover only liquid transportation fuels.

The environment ministry plans to release a draft regulatory design paper in the fall that will lay out a tentative allocation of the 30mn t reductions between all three fuel streams. It will also publish a framework for a cost-benefit analysis around the same time.

The CFS would serve as an important part of Canada’s plan to reduce GHGs by 30pc from 2005 levels by 2030. The transportation sector accounted for nearly a quarter of the country’s emissions in 2015. Buildings and heavy industry were responsible for 12pc and 10pc, respectively.