Canada plan aims to reduce carbon content in fossil fuels

Source: By SHAWN MCCARTHY, The Globe and Mail • Posted: Monday, December 18, 2017

The federal government is moving to implement regulations to require all providers of fossil-fuel energy to reduce the carbon content of their fuels as part of its effort to meet Canada’s targets for greenhouse gas reduction.

Environment and Climate Change Canada on Wednesday released a broad framework under which it will set “Clean Fuel Standard” regulations for energy used in transportation, buildings and industry. After consultations with industry and other stakeholders, the government will introduce draft fuels regulations next year, with the coming-into-force date to be determined.

Under the plan, energy companies that provide oil-based or natural-gas fuels will have to find ways to reduce their overall carbon footprint. They can, for example, increase the efficiency of their energy supply chains and industrial processes; increase the use of ethanol or renewable natural gas; or invest in electric-vehicle charging stations.

The rules will be “technology-neutral, meaning that producers, importers and distributors will have the flexibility to meet the targets in many different ways, with actions or investments that make sense for them,” Environment Canada said in a background document released on Wednesday.

Ottawa expects the regulations will reduce greenhouse gas (GHG) emissions by 30 million tonnes a year by 2030, the equivalent of taking seven million cars off the road. The clean fuel standard is a major part of the government’s effort to reduce GHGs by 30 per cent from 2005 levels by 2030, as Canada pledged to do under the United Nations climate-change agreement signed in Paris two years ago.

“Without the standard, it would be difficult for Canada to meet its Paris climate commitment, and Canadian fuels would remain more polluting than necessary,” Environment Canada said.

Environment Minister Catherine McKenna was in Paris on Wednesday for the One Planet summit organized by French President Emmanuel Macron to mark the second anniversary of the UN deal. She has reiterated Ottawa’s desire to play a leadership role in the international effort to reduce carbon emissions, despite concerns among some in the business community that Canada is piling added costs on businesses even as the U.S. government is slashing regulations and taxes under President Donald Trump.

The federal government is also working on a “zero emissions vehicle” strategy, which is expected to be released in the new year and will support the use of electric vehicles and other low-emission options such as hydrogen vehicles and natural-gas-powered trucks. The fuels are also covered by federal and provincial carbon pricing plans.

The Ontario government recently announced it will increase its ethanol content requirement for gasoline marketers, boosting it to 10 per cent from 5 per cent by 2020. The ethanol industry wants the federal government to match Ontario’s increased ethanol mandate, but Ottawa says it will maintain the mandate “in the short term” and replace it with an increasingly stringent clean fuel regulations over the longer term.

“Maintaining and growing mandates as a complement to pricing carbon ensures continued local investment and innovation while creating jobs,” said Andrea Kent, spokeswoman for Greenfield Global, one of the country’s largest corn-based ethanol producers.