Canada releases final Clean Fuel Regulations; combined with C$1.5B Clean Fuels Fund, CFR will incentivize increased production of low-carbon-intensity fuels, creating economic opportunities for biofuel feedstock providers such as farmers and foresters

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GATINEAU, Quebec , June 30, 2022 (press release) –

Putting in place smart climate policies that support innovative technologies will build a stronger Canadian economy as we drive down polluting emissions towards net zero. Today, the Government of Canada is sending a clear signal to investors and industry that now is the time to bring more clean technologies, energy efficiency practices, and affordable low-carbon fuels to market.

The Honourable Steven Guilbeault, Minister of Environment and Climate Change, announced the publication of the final Clean Fuel Regulations (CFR). The CFR set increasingly stringent requirements on producers and importers to reduce the carbon intensity of gasoline and diesel. Once fully implemented, the CFR will help cut up to 26.6 million tonnes of greenhouse gas pollution in 2030, or roughly the amount of GHGs currently generated by the entire Canadian economy in two weeks.

Economic opportunities

The Government of Canada expects the CFR to drive significant economic opportunities in the development and use of clean fuels and technologies.

The Clean Fuel Regulations replace the current federal Renewable Fuels Regulations. In moving to adopt regulations that focus on emissions throughout the lifecycle of fuels, Canada is following similar approaches that already exist in British Columbia, California and Oregon. These jurisdictions have benefited from the expansion of clean technology industries as a result of these regulations.

In combination with the Government of Canada’s $1.5 billion Clean Fuels Fund, the CFR will create incentives for the increased domestic production of low-carbon-intensity fuels (such as ethanol). This will create economic opportunities for biofuel feedstock providers, such as farmers and foresters. It will also help Canadian fuel producers to compete in the rapidly expanding global market for clean energy.

Working in tandem with pollution pricing and the forthcoming oil and gas emissions cap, the Clean Fuel Regulations will also help diversify energy choices and promote faster adoption of zero-emission vehicles by incentivizing the deployment of vehicle-charging infrastructure.

Maintaining affordability and competitiveness

The regulations have been designed to ensure there will be no immediate impact on fuel prices. In addition, the Clean Fuel Regulations come at a time when refining margins on gasoline in Canada are up more than 113 percent between June 2019 and June 2022, and oil and gas companies are experiencing record cash flows. In this context, it is an opportune time for industry to invest in new, clean technology.

Meanwhile, the federal government is moving to increase the availability and affordability of zero-emission vehicles, which cut pollution and make people’s daily commutes cheaper. The Government is also investing in charging infrastructure across the country, while also requiring that all new cars sold in Canada become more and more fuel-efficient.

The Government of Canada remains focused on making life more affordable through its $8.9 billion plan in new supports this year—that is going to put more money in the pockets of Canadians at a time when they need it most. This is how we are fighting climate change and building a strong economy for generations to come.

Quotes

The move to power our economy with more low-carbon and clean fuels is happening now across Canada. I am excited to see new investments that are creating sustainable jobs for workers and their communities. It just goes to show that we can deliver clean air, good jobs, and a strong economy all at once. The Clean Fuel Regulations help secure a foundation for more growth in the industries that will help Canada achieve net-zero emissions while continuing Canada’s role as a global supplier of energy.”
– The Honourable Steven Guilbeault, Minister of Environment and Climate Change

Quick facts

  • The oil and gas sector is Canada’s largest source of greenhouse gas (GHG) emissions. In 2020, it produced 27 percent of national emissions.

  • The Government estimates that about 2.2 billion litres of additional low-carbon-intensity diesel and 700 million litres of additional ethanol will be needed in 2030 under the CFR, creating economic growth and jobs for Canadians across the country.

  • The Government of Canada’s Clean Fuels Fund will invest $1.5 billion to build new or expand existing clean fuel production facilities. The Fund will help deliver on early actions outlined in the Hydrogen Strategy for Canada and help support the implementation of the Clean Fuel Regulations.

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Jason Irving
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