Federal Renewable Fuels Regulation - Key Elements and Next Steps

Toronto, Ontario
May 15, 2009

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• In December 2006 the Government published the Notice of intent to develop a federal regulation requiring renewable fuels which announced that the regulation would require petroleum fuel producers and importers to have:
  • An average renewable fuel content of at least 5% based on the volume of gasoline, commencing in 2010
  • An average 2% renewable fuel content in diesel fuel and heating oil, upon successful demonstration of renewable diesel fuel use under the range of Canadian conditions
    • Not in place for 2010, but intended to come into effect by no later than 2012
• Regulation to be developed under the Canadian Environmental Protection Act, 1999 (CEPA, 1999)

• General approach based on U.S. Environmental Protection Agency Renewable Fuel Standard
  • With some simplifications
• Timing for the 5% requirement based on gasoline is the following:
  • Requirement will be effective September 2010
  • Draft Regulation targeted for publication in the Canada Gazette, Part I in December 2009
  • Final Regulation targeted for publication in the Canada Gazette, Part II in June 2010
• Implement 2% requirement in diesel fuel and heating oil by 2011 or earlier subject to technical feasibility
  • Will require an amendment to the regulation

• Required renewable fuel content to be based on the volumes of gasoline, diesel fuel and heating oil that a company produces or imports
• Regulation not to apply to individual facilities or provinces of import

• Not every litre of gasoline, diesel fuel and heating oil produced or imported would be required to contain renewable fuel

• Companies may acquire credits from other parties in lieu of having renewable fuel content in their gasoline and distillate pools
• Credits may be created by:
  • Blending renewable fuel into petroleum fuel
  • Importing fuel with renewable content
  • Producing fuel from bio-crude

• A broad range of liquid renewable fuels may be used to meet the requirements; not limited to ethanol and biodiesel.
• The 5% requirement for gasoline may be met by renewable fuel in gasoline, diesel or other liquid petroleum fuels
• The 2% requirement for diesel fuel and heating oil would have to be met through the use of renewable fuel in those products
• There is to be no regional requirement

Possible provisions to address regional implementation challenges will be considered through the development of the regulations.

• Companies producing or importing less than 400 m³ of fuel per year
• Fuel for use in competition vehicles, aviation applications and for scientific research
• Fuel for use in the Yukon, Northwest Territories and Nunavut

• Fuel quality specifications
• Differential weightings (biases) assigned to renewable fuels
  • Differential weightings may be considered in the future once there is a better knowledge base on the life cycle analysis of various fuels.

• Drafting the regulation
• Targeting the publication of proposed regulation in the Canada Gazette, Part I in December 2009
• Consulting on the proposed regulation
• Targeting publication of final regulation in the Canada Gazette, Part II in June 2010