Regulations Amending the Sulphur in Gasoline Regulations
Introduction
Key findings from the strategic environmental and economic assessment (SEEA) conducted in respect of the Regulations Amending the Sulphur in Gasoline Regulations (the Amendments), as published in the Canada Gazette, Part II on July 1, 2026.
The Government of Canada published the Sulphur in Gasoline Regulations (the Regulations) in 1999 under the Canadian Environmental Protection Act (CEPA). Environment and Climate Change Canada (ECCC) administer the Regulations.
The Regulations limit the amount of sulphur in gasoline produced in and imported into Canada. This helps reduce air pollution from vehicles, leading to cleaner air and better health for Canadians.
In 2015, the Government of Canada amended the Regulations to further reduce the amount of sulphur in gasoline. These amendments lowered the annual gasoline pool average limit from 30 mg/kg to 10 mg/kg. They also aligned Canada’s gasoline sulphur requirements with the United States Environmental Protection Agency (U.S. EPA) Tier 3 standards. This allowed vehicle manufacturers to use the same vehicle and engine emission control technologies in both Canada and the U.S.
The 2015 Amendments gave gasoline importers and producers (primary suppliers) flexibilities to meet the new, lower sulphur limits. These flexibilities helped them adjust to the new requirements during the transition period. One of these flexibilities was a temporary trading system for sulphur compliance units (SCUs). Primary suppliers using an annual pool average could use this system from 2012 to 2019.
Primary suppliers could create SCUs when their yearly pool average sulphur concentration was below the limit. They could use these units to meet compliance requirements. They could also transfer the units once to another primary supplier.
In 2020, regulatory amendments reintroduced the temporary SCU trading system until 2025. The amendments addressed concerns raised by the Canadian Fuels Association (CFA), which represents fuel refiners in Canada. CFA members identified operational challenges at their facilities. Outages of desulphurization equipment caused some of these challenges. Delays to facility upgrades as a result of COVID-19 also created difficulties.
The Amendments finalized in 2026 extend the temporary SCU trading system until December 31, 2030. They do not change the sulphur limit and continue to support the original purpose of the Regulations. The objective of these amendments is to give primary suppliers more time and maintain flexibility as they transition to lower sulphur gasoline. Re-enacting the temporary SCU trading system will help primary suppliers continue their operations and maintain a reliable fuel supply. It will also give ECCC time to assess long-term regulatory options. This work supports ECCC’s commitment in the Red Tape Reduction Plan and Progress Report 2025. One initiative in this report is to combine five fuel quality regulations into a single set of requirements. The Regulations are included in this initiative.
Canada has committed to reduce air pollution under two international treaties on air pollution that crosses borders. These treaties are the bilateral Canada-U.S. Air Quality Agreement and the Convention on Long-range Transboundary Air Pollution and its multi-pollutant, multi-effects Gothenburg Protocol. Under both treaties, Canada has committed to reduce emissions of sulphur dioxide and nitrogen oxides, and other air pollutants. This includes reductions from vehicles and other mobile sources. The Regulations help Canada meet these commitments.
Anticipated environmental impacts
ECCC expects the Amendments to have minor effects on the environment and human health. This is because they will keep the current compliance regime in place. Some primary suppliers will use SCUs to offset gasoline with sulphur levels higher than the 10 mg/kg limit. The temporary credit trading system will lead to small regional increases in sulphur and associated air pollutant emissions. These emissions will come from vehicles and engines that use this gasoline. ECCC expects these increases to be limited. This is because the SCU trading system is temporary and will end in 2030.
Anticipated economic impacts
In accordance with guidance under the Cabinet Directive on Strategic Environmental and Economic Assessment, this proposal’s strategic environmental and economic assessment did not include a strategic economic analysis due to the nature and scope of the proposal.
Federal Sustainable Development Strategy and the United Nations 2030 Agenda
The Amendments support Goal 11 of the 2022-2026 Federal Sustainable Development Strategy. This goal aims to improve access to affordable housing, clean air, transportation, parks, and green spaces, as well as cultural heritage in Canada. The Amendments also support Goal 11 of the associated United Nations 2030 Agenda for Sustainable Development. This goal focuses on ensuring sustainable Cities and Communities.
Indigenous rights considerations
ECCC reviewed the Amendments for potential impacts on modern treaties. The review did not find any negative impacts on potential or established Indigenous or treaty rights. Section 35 of the Constitution Act, 1982 recognizes and affirms these rights.
The Amendments allow primary suppliers to use banked credits. As a result, some regions may experience small increases in sulphur levels. ECCC expects these increases to be limited in scope and to decrease over time. As a result, ECCC does not expect the Amendments to have measurable impacts on Indigenous Peoples.
Public perspectives
The Government of Canada published the proposed Regulations in the Canada Gazette, Part I on December 13, 2025. It also published a Regulatory Impact Analysis Statement that described the early and prepublication consultations. A 60-day consultation period followed.
Industry representatives supported the proposed approach. They said that the Amendments give fuel suppliers the certainty they need to plan and optimize their operations. The Canadian Environmental Law Association and The Three Fires Group / Chippewas of Kettle & Stony Point First Nation raised concerns about the proposal. They noted that temporary increases in sulphur levels could increase sulphur emissions. They also said these emissions could affect human health and the environment.
ECCC is reviewing long-term approaches for regulating sulphur in gasoline. This is to help fuel suppliers continue to meet sulphur limits. The objective is to maintain current environmental outcomes and improve them where feasible. This work will help protect the environment and human health in Canada.
ECCC also plans to combine fuel quality requirements in Canada. As part of this work, it will review the compliance flexibilities available for meeting sulphur levels in gasoline. ECCC will continue to work with interested parties to assess future options.
Follow-up and monitoring
The Amendments continue to provide a strong framework for tracking environmental results. Primary suppliers report sulphur levels, batch volumes, and pool average each year. This reporting helps ECCC maintain oversight and transparency.
The Government of Canada made the Amendments under CEPA. ECCC will implement and enforce the Amendments according to the Compliance and Enforcement Policy for CEPA. Enforcement officers will use this policy to verify that regulated parties follow the requirements.
The National Air Pollution Surveillance (NAPS) program also monitors air quality across Canada. ECCC publishes monitoring data every year.