Clean Electricity Regulations
Key findings of the strategic environmental assessment (SEA) conducted for the Clean Electricity Regulations, as published in the Canada Gazette, Part II, on December 18, 2024.
There is an urgent global need to address climate change and move towards a low-carbon economy. Greenhouse gases (GHGs) are primary contributors to climate change, and decreasing GHG emissions in all sectors, including electricity, is necessary to address the threat of climate change to the environment (e.g., extreme weather events, ocean acidification, sea level rise, floods, wildfires) and to reach the Government of Canada’s GHG emissions reduction targets.
In April 2021, the Government of Canada committed to a national target of reducing GHG emissions by 40-45% below 2005 levels by 2030. Building on this target and under the Canadian Net-Zero Emissions Accountability Act, in December 2024 the Government Canada committed to reducing GHG emissions by 45-50% below 2005 levels by 2035. The 2030 Emissions Reduction Plan (ERP) describes the many actions that are already driving significant reductions as well as the new measures that will ensure that we reduce emissions across the entire economy to reach our 2030 emissions reduction target, contribute to emissions reductions in 2035 and put us on a path to achieve net-zero emissions by 2050.
A prosperous net-zero economy will require far more electricity than we use today: to cut greenhouse gas emissions, households and businesses will increasingly switch from fossil fuels to using energy in the form of electricity. To prevent GHG emissions from increasing in the electricity sector as other sectors electrify, it is essential that Canada’s electricity be increasingly generated from low or non-emitting sources while remaining affordable and reliable for Canadian households and the economy.
In 2021, at the 26th United Nations Framework Convention on Climate Change Conference of the Parties, Prime Minister Trudeau stated Canada’s goal of establishing a net-zero emissions electricity system. This commitment was reflected in the mandate letters for the ministers of the Environment and of Natural Resources in December 2021. By 2024, all G7 countries had pledged to achieve a net-zero electricity grid.
In support of a net-zero electricity system, in December 2024, the Government of Canada published the Clean Electricity Regulations (CER or the Regulations), under the Canadian Environmental Protection Act, 1999 (CEPA). The Regulations are necessary to prohibit excessive emissions from fossil fuel fired electricity generation over the coming years, while providing flexibility to enable provinces and territories to continue providing reliable and affordable electricity to Canadians. This will ensure that by 2035 Canada’s electricity system is effectively positioned to contribute to the goal of economy-wide net-zero emissions by 2050.
Requirements to reduce emissions under the Regulations start in 2035 and reach net-zero in 2050. They achieve emission reductions by prohibiting emissions above an annual emissions limit for all covered electricity generating units, based on each unit’s electricity generation capacity. The Regulations are technology-neutral and include limited compliance flexibility mechanisms that adjust the scope of the prohibition to limit negative impacts on grid stability or disproportionately increasing compliance costs and therefore electricity prices.
Consistent with federal and provincial emissions regulations and other complementary measures, the electricity sector in Canada has taken very significant steps to reduce its emissions in recent years. Since 2005, the sector’s emissions have dropped by 55%, mainly from the national phaseout of unabated coal power. As reported in Part 3 of the National Inventory Report 1990-2022: Greenhouse Gas Sources and Sinks in Canada, electricity generation accounted for 56 megatonnes (Mt) of GHG emissions in 2022, nearly 8% of Canada’s total. Despite the sector’s progress, electricity emissions will need to fall further for Canada to reach net-zero. Without further regulatory action, Canada is expected to experience an increase in emissions from the electricity sector as more unabated natural gas would continue to be built and deployed to meet growing electricity demand. Some modelling shows that in a scenario with higher demand growth, electricity emissions could more than double by 2050 (relative to 2025 levels). With the Regulations, the buildout of new generation will be clean and is expected to only represent a small impact to the overall cost of maintaining and expanding the electricity system.
Environment and Climate Change Canada (ECCC) is responsible for the administration, implementation and enforcement of the Regulations. Natural Resources Canada, with support from several departments including ECCC, will lead on Powering Canada’s Future, the Government of Canada’s Clean Electricity Strategy. The Government of Canada has also announced significant support through investment tax credits, funding and low-cost financing to support the expansion of clean electricity generation and transmission infrastructure.
The SEA conducted for the CER concluded that the adoption of the CER will result in positive environmental effects. Based on numerous scientific studies, the United Nations Framework Convention on Climate Change has concluded that the global community will need to urgently put in place measures to avoid the irreversible and catastrophic effects of a greater than 1.5°C increase in temperature. Limiting global warming to below 1.5°C will significantly reduce the risks, adverse impacts, and related losses and damages from climate change. Failing to do so will lead to increasingly frequent and dangerous extreme weather events including heatwaves, droughts, wildfires, and heavy precipitation and flooding according to the Intergovernmental Panel on Climate Change. Extreme heat causes the greatest mortality of all extreme weather, with an estimated 489,000 heat-related deaths per year between 2000 and 2019 according to the World Meteorological Organization. Exceeding 1.5°C could also trigger multiple climate tipping points — such as breakdowns of major ocean circulation systems, abrupt thawing of boreal permafrost, and collapse of tropical coral reef systems — with abrupt, irreversible, and dangerous impacts for humanity according to the globally recognized peer reviewed journal Science.
The CER is anticipated to significantly reduce the electricity sector’s GHG emissions, which contribute to climate change. By accelerating the uptake of low- and non-emitting electricity generation, the Regulations also cut air pollution, reducing Canadians’ exposure to pollutants like nitrogen oxides, sulfur oxides, particulate matter, and mercury. This results in benefits to local air quality and to Canadians’ health. Since the Regulations are expected to increase deployment of low and non-emitting sources of electricity generation, potential secondary negative environmental effects could include the localized land-use impacts associated with new solar, wind and hydro projects. There are also considerations around the storage and disposal of spent fuel from nuclear power plants and the impacts of the replacement and disposal of wind turbines and solar panels when they reach the end of their life span. Wind turbines are 85-90% recyclable by mass and solar panels are 90% recyclable by mass, so options exist to mitigate these impacts. These potential negative environmental effects are expected to be limited compared to the positive environmental effects associated with reducing the amount of GHGs and air pollutant emissions from the electricity sector.
The Regulations may positively contribute to several of the goals of the 2022-2026 Federal Sustainable Development Strategy (FSDS), as well as related Sustainable Development Goals (SDGs) of the United Nations 2030 Agenda.
FSDS Goal 7 – Increase Canadians’ Access to Clean Energy and SDG 7 – Affordable and Clean Energy:
The CER will play a key role in reducing Canada’s electricity system emissions and reaching net-zero by 2050. While the Regulations are technology-neutral, it is expected that there will be much more deployment of non-emitting and low-emitting electricity generation resources, increasing access to clean energy across Canada. This is also expected to support SDG 7: Affordable and Clean Energy, since electricity from wind, solar, and other renewable sources is now often the cheapest source of electricity available. A number of recent analyses have looked at what using more electricity means for Canadians’ overall energy costs and have shown that most households in Canada can save money from electrification and increased access to clean energy.
FSDS Goal 9 – Foster Innovation and Green Infrastructure in Canada and SDG 9 – Industry, Innovation and Infrastructure:
Since the CER places limits on emissions from electricity generation units beginning in 2035, it is expected that more low- and non-emitting electricity generation and abatement technologies will be developed and deployed over the next couple of decades, which supports innovation and green infrastructure development in Canada. The Regulations, supported by Canada’s Clean Electricity Strategy and federal support, can also encourage provinces and territories, electricity system operators and utilities to explore and invest in other complimentary measures in support of a clean, reliable and affordable electricity system, such as energy efficiency, demand side management, distributed energy resources, energy storage, interties, and dynamic pricing and electricity market reform. This is also expected to support SDG 9 – Industry, Innovation and Infrastructure.
FSDS Goal 11 – Improve Access to Affordable Housing, Clean Air, Transportation, Parks, and Green Spaces, as well as Cultural Heritage in Canada and SDG 3 – Good Health and Well-being:
The CER is anticipated to significantly reduce the electricity sector’s GHG emissions, which contribute to climate change. By accelerating the uptake of low- and non-emitting electricity generation, the Regulations also cut air pollution, reducing Canadians’ exposure to pollutants like nitrogen oxides, sulfur oxides, particulate matter, and mercury. This results in benefits to local air quality and to Canadians’ health and reduces health care costs. This is also expected to support SDG 3- Good Health and Well-being.
FSDS Goal 13 – Take Action on Climate Change and Its Impacts and SDG 13 – Climate Action:
Electrification delivers a much greater climate benefit if it is powered by clean electricity. The CER will play an important role in reducing emissions from the electricity sector and reaching net-zero in 2050. This will support emissions reductions from other parts of the economy as other sectors look to electrification to decarbonize. Using clean electricity for transportation, to heat buildings and power an increasing number of industrial activities is key to reducing economy-wide emissions by 2050. The CER, combined with other ambitious climate actions in the 2030 ERP, will help Canada meet its emissions reduction targets. This will support SDG 13 – Climate Action.
ECCC has undergone extensive engagement since March 2022 to understand the viewpoints of a wide variety of interested parties. Interested parties include electric utility companies, provincial and territorial governments, Indigenous groups, industry associations, environmental non-governmental organizations, unions and labour organizations, researchers and academics in the fields of climate change or energy, and the general public. Engagement with over three hundred different interested parties through over 300 meetings and 7 webinars. ECCC received a total of over 850 unique submissions and received over 18,000 emails on the proposed Regulations as part of multiple letter-writing campaigns. Throughout these consultations, ECCC heard a variety of perspectives. During these engagements, provinces and interested parties brought forward compelling new evidence that the proposed Regulations as drafted would have significantly impacted reliability. In response to this evidence, significant changes were made to the regulatory design to provide more flexibility and support a more affordable and reliable net-zero transition while accounting for different starting points across the different regions in Canada and continuing to achieve significant emissions reductions.
The CER is one component of Canada’s ERP. This ERP is issued under the Canadian Net-Zero Emissions Accountability Act. Progress under the plan was reviewed in a 2023 progress report, with future reports to be produced in 2025 and 2027. In December 2024, Canada released its 2035 GHG reduction target of 45–50% below 2005 levels. Additional plans will be developed for 2035 through to 2050.