Canada proposes Clean Fuel Standard
21 December 2020
Environment and Climate Change Canada (ECCC) has released its proposed Clean Fuel Standard (CFS) regulation, intended to reduce the carbon intensity of liquid transportation fuels.
Under the proposed CFS, fossil fuel suppliers, including producers and importers, must gradually reduce the carbon intensity (CI) of the liquid fossil fuels they produce and import into Canada. For the top 5 fuels in Table 1, the required CI reduction is 12 gCO2e/MJ, to be achieved from December 2022 (the first compliance period) through 2030. No CI reduction is required for jet fuel, while aviation gasoline is explicitly exempted from the CFS.
| Liquid Fossil Fuel | Baseline | 2022.12 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 |
|---|---|---|---|---|---|---|---|---|---|---|
| Gasoline | 96 | 93.6 | 92.4 | 91.2 | 90.0 | 88.8 | 87.6 | 86.4 | 85.2 | 84.0 |
| Diesel | 96 | 93.6 | 92.4 | 91.2 | 90.0 | 88.8 | 87.6 | 86.4 | 85.2 | 84.0 |
| Kerosene | 87 | 84.6 | 83.4 | 82.2 | 81.0 | 79.8 | 78.6 | 77.4 | 76.2 | 75.0 |
| Light Fuel Oil | 95 | 92.6 | 91.4 | 90.2 | 89.0 | 87.8 | 86.6 | 85.4 | 84.2 | 83.0 |
| Heavy Fuel Oil | 98 | 95.6 | 94.4 | 93.2 | 92.0 | 90.8 | 89.6 | 88.4 | 87.2 | 86.0 |
| Jet Fuel | 88 | 88.0 | 88.0 | 88.0 | 88.0 | 88.0 | 88.0 | 88.0 | 88.0 | 88.0 |
The Clean Fuel Standard is a performance-based approach. Fuel suppliers can earn compliance credits in three ways:
- Compliance Category 1—Undertake projects that reduce the lifecycle carbon intensity of fossil fuels (e.g., carbon capture and storage, renewable electricity, enhanced oil recovery, co-processing of biocrudes in refineries and upgraders);
- Compliance Category 2—Supply low carbon fuels such as ethanol in gasoline or biodiesel in diesel; and
- Compliance Category 3—Support end-use fuel switching in transportation (when an end user of fuel changes or retrofits their combustion devices to be powered by another fuel or energy source, such as electricity in transportation).
Fuel suppliers would also be able to use compliance credits created following credit creation rules related to reducing the CI of gaseous or solid fuels, for up to 10% of their liquid class reduction requirement. The crediting opportunities for gaseous and solid fuels would include projects that reduce emissions in the lifecycle of solid and gaseous fuels, and the production or importation of low CI gaseous fuels including renewable natural gas, biogas, hydrogen and renewable propane.
To prevent adverse impacts on land use and biodiversity stemming from the increased harvest and cultivation of biomass-based feedstocks, the proposed regulations would establish land-use and biodiversity (LUB) criteria. Only biofuels made from biomass feedstock that adhere to the LUB criteria would be eligible for compliance credit creation.
ECCC is developing a lifecycle assessment (LCA) model to support the implementation of the CFS. In order to determine the carbon intensity of the various low carbon fuels produced in and imported into Canada, the model will set carbon intensity values, accounting for the amount of GHGs from all stages in a fuel’s lifecycle, from feedstock extraction to combustion, per unit of energy. The Fuel LCA Model will be launched in parallel with the publication of the final Clean Fuel Standard regulations.
The proposed text is subject to a 75-day public comment period. The final regulation is expected to be published in late 2021.
Source: ECCC | Canada Gazette