The Government of Canada, represented by the Honourable Steven Guilbeault, Minister of Environment and Climate Change, has announced the publication of the final Clean Fuel Regulations (CFR). Published on June 29, 2022, the CFR 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."
According to a statement, the Clean Fuel Regulations (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 (GHG) pollution in 2030, or roughly the amount of GHGs currently generated by the entire Canadian economy in two weeks.
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, Minister Guilbeault said.
Economic opportunities
The Candian Government expects the Clean Fuel Regulations to drive significant economic opportunities in the development and use of clean fuels and technologies.
The CFR replaces the current federal Renewable Fuels Regulations (RFR). 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 (BC), California (CA), and Oregon (OR).
These jurisdictions in Canada and the United States (US) have benefited from the expansion of clean technology industries as a result of these regulations.
In combination with the Government of Canada’s CA$1.5 billion Clean Fuels Fund, the CFR will create incentives for the increased domestic production of low-carbon-intensity fuels such as ethanol and biodiesel enabling new build or expansion of 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.
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.
Maintaining affordability and competitiveness
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.
According to Minister, the regulations have been designed to ensure there will be no immediate impact on fuel prices.
In addition, the CFR comes 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 the industry to invest in new, clean technology.
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, said Minister Guilbeault.
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.
