Finalized federal Clean Fuel Regulations lay foundation for decarbonized transport and the national transition to electric mobility

Bora Plumptre, Director of Research at Electric Mobility Canada, made the following statement in response to the official publication of final federal Clean Fuel Regulations [pdf / html] and associated Regulatory Impact Analysis Statement [pdf / html] in Part II of the Canada Gazette.  

  

Nearly six years after Environment and Climate Change Canada first announced its intent to regulate the carbon intensity of fuels, the federal cabinet has given official sanction to an essential pillar of Canada’s climate plan. Electric Mobility Canada (EMC) welcomes the finalization of the Clean Fuel Regulations (CFR) and salutes the diligence and dedication of officials and stakeholders across the country in bringing this important new policy to life. Few regulatory initiatives have received the level of scrutiny and consultative outreach afforded the CFR, but an extensive process of policy development has yielded a strong result with clear potential to drive growth and innovation in the Canadian market for low-carbon fuels, including electricity for transportation.  

  

The coming-into-force of the CFR puts Canada on a path to reducing emissions in transportation, our second-most-GHG-intensive economic sector, and to boosting the availability and affordability of clean fuels for consumers seeking to escape exposure to the volatile, escalating costs of fossil gasoline and diesel. By creating a new credit market for clean fuels, the CFR will support the deployment of electric vehicle (EV) charging infrastructure and make driving an EV more convenient; it will complement other policies and incentives in making EVs more accessible for Canadians to buy; and it will lay the groundwork to reach Canada’s zero-emission vehicle (ZEV) adoption targets for 2026 and 2030 (20% and 60% of vehicle sales, respectively). 

  

With a 15 per cent lifecycle greenhouse gas emission-reduction requirement now established for 2030—equivalent to 14 grams carbon-dioxide-equivalent removed or displaced from each megajoule of diesel and gasoline supplied for domestic use—the final regulations represent a marked improvement over previous versions of the policy. In addition to a higher level of stringency in its basic carbon-intensity reduction requirements, the CFR now also ensures that credits for cleaner fossil fuel projects are only awarded to such fuels consumed domestically, and not to fossil fuel exports. Along with other clean fuel colleagues and stakeholders, EMC has long advocated for this refinement to the policy design, which will protect demand in the compliance market for non-fossil clean fuel solutions. We applaud the Government of Canada for its leadership and responsiveness in adopting this provision, which levels the playing field between technologies and protects the long-term potential of the regulation to deliver deep benefits for the climate. 

  

While the CFR embodies, appropriately, a principle of technology-neutrality with respect to eligible compliance options, the long-run environmental effectiveness of the policy will depend on its ability to motivate additional investment and innovation toward the non-fossil clean fuels, like electricity, that must be the basis of a nationally decarbonized transportation system. EMC looks forward to tracking the evolution and administration of this crucial climate-industrial policy, to supporting EMC members’ ability to participate as voluntary credit creators within the CFR credit market, and, as compliance data becomes available, to evaluating CFR credit market dynamics against the benchmark of Canada’s long-term net-zero aspirations.  

  

We applaud the Government of Canada for reaching this major milestone, and urge it to move forward swiftly to design and implement other complementary climate policies—like zero-emission vehicle sales standards—that will be crucial to achieving the ambitious transport-sector emissions reductions (-22% from today’s levels by 2030) targeted in Canada’s 2022 Emissions Reduction Plan. The new CFR is a significant step forward for our national climate strategy, but time is of the essence to bring greater certainty to the pace of Canada’s transition to a highly electrified future.