Question Period Note: Clean Fuel Standard

Clean Fuel Standard

• The Clean Fuel Standard plays a key role in Canada’s national climate change strategy. It will lower the carbon intensity of fuels resulting in significant emissions reductions while also stimulating investment and innovation in clean fuels.
• The Clean Fuel Standard will cover liquid fossil fuels, primarily used in transportation – a sector responsible for about one quarter of Canada’s GHG emissions.
• The Clean Fuel Standard will accelerate Canada’s transition to a low-carbon economy by helping Canadian companies develop innovative technologies that can deliver clean solutions at home and to global markets.
SUPPLEMENTAL
• Our work on the Clean Fuel Standard builds on the successful low-carbon fuel requirements that are already in place in California, B.C. and Europe.
 

• The Clean Fuel Standard will significantly reduce GHG emissions by lowering the lifecycle carbon intensity of liquid fossil fuels used mainly in transportation like gasoline and diesel. The regulations will take a market-based approach leading to investment and innovation in low-carbon fuels and technologies such as advanced biofuels, carbon capture and storage (CCS) and electric vehicles. A credit trading system will provide flexibility for fossil fuel producers to comply at lower costs in order to mitigate price impacts on fuel purchasers.
• When the Clean Fuel Standard was first announced in 2016, it was to be developed in a phased approach starting with regulations covering liquid fossil fuels followed by regulations covering gaseous and solid fuels. However, the scope of the Clean Fuel Standard has since been narrowed to liquid fossil fuels. This decision was made in light of several measures to support clean fuel production and consumption announced in the Strengthened Climate Plan and Budget 2021, including an increased carbon price and the $1.5B Clean Fuels Fund.
• In July 2021, the scope of the Clean Fuel Standard was further refined to focus on transportation fuels. There will be no regulatory obligation for heavy and light oil (which are predominantly used in stationary applications) and distillate fuel oils used in space heating. This will also help address affordability concerns in areas that presently rely heavily on home heating oil.
• Since its announcement in 2016, Environment and Climate Change Canada has engaged broadly with stakeholders and provinces.The proposed regulations were published in the Canada Gazette, Part I in December 2020 and final regulations are currently under development. Extensive comments were received from stakeholders and are being considered in the development of the final regulations. Carbon intensity requirements will become increasingly stringent reaching approximately 13% reduction below 2016 levels by 2030. In 2030, up to 20.6 million tonnes of GHG emission reductions are expected from the regulations.

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