1. Introduction

• 1.1 Background
• 1.2 Consultations to Date on the Canadian Regulations

Environment Canada is developing new requirements for the allowable level of sulphur in diesel fuel that is used in on-road vehicles. In alignment with requirements recently passed by the U.S. Environmental Protection Agency (EPA), Canadian on-road diesel fuel would be restricted to a maximum of 15 parts per million (ppm) commencing in mid-2006. This paper discusses options for the approach and design of the new Canadian diesel fuel regulations.

Specifically, Environment Canada is soliciting the views of interested parties on the design and approach of Canadian regulations to reduce the level of sulphur in on-road diesel fuel to 15 ppm, starting in 2006. Specific issues on which Environment is seeking views are listed in section 5.

The basic options for the Canadian regulations can be reduced to:

1. simple regulations requiring all Canadian on-road diesel fuel to meet a 15 ppm limit starting June 1, 2006; or
2. complex EPA-style regulations providing for some flexibility for a small portion of the on-road diesel fuel pool to exceed the 15 ppm limit during for a short transition period.

In conjunction with the new requirements for low-sulphur on-road diesel, Environment Canada also intends to develop new regulations for heavy-duty engines and vehicles.

Emissions from vehicles and engines are the largest contributor to air pollution in Canada. The resulting air pollution has significant negative health impacts on Canadians, contributing to premature mortalities, cardiovascular ailments and respiratory distress.

In cooperation with provincial governments, the federal government is putting in place a comprehensive cleaner vehicles and fuels program to reduce harmful emissions from vehicles. Actions over the past several years include federal regulations to reduce the allowable level of exhaust, evaporative and refueling emissions from new on-road vehicles, to control the sulphur content of diesel fuel, to reduce the amount of benzene in gasoline and to limit the dispensing rate of gasoline dispensing pumps. In addition regulations passed in 1999 will reduce the amount of sulphur in gasoline starting in 2002, with full implementation complete by the end of 2004. Most provinces control gasoline vapour pressure, and some are developing or have already introduced vehicle inspection and maintenance programs and scappage programs.

As part of the cleaner vehicles and fuels program, the federal Minister of Environment announced in May 2000 and again in February 2001 that Canadian standards for sulphur in on-road diesel fuel would be aligned with requirements that were being developed by the U.S., both for level and timing. On December 7, 2000, this commitment was reiterated when the governments of Canada and the United States signed an agreement on reducing transboundary movement of smog-causing pollutants (the Ozone Annex¹). This international agreement commits Canada to "develop and implement … a regulation under the Canadian Environmental Protection Act 1999 to reduce the allowable level of sulphur in on-road diesel fuel to align with future U.S. standards."

On December 21, 2000, the U.S. released its final rule setting emission standards for heavy-duty engines and vehicles and requirements for sulphur in on-road diesel fuel². The EPA program will reduce emission levels of particulate matter and nitrogen oxides by 90 percent and 95 percent respectively from the standard levels in effect today. Emissions of carbon monoxide, sulphur dioxide, and toxics such as benzene, 1,3-butadiene, formaldehyde, acetaldehyde, acrolein and dioxin will also be reduced.

The U.S. final rule sets a maximum level of 15 parts per million (ppm) for sulphur in diesel fuel that is used in on-road vehicles. The 15-ppm limit comes into effect on June 1, 2006. The U.S. rule is lengthy and complex, since it includes "safety valve" provisions to allow a small part of the US on-road diesel pool to meet the existing 500-ppm limit for a short period of time.

In April 2000, Environment Canada invited stakeholders to participate in developing the federal government's approach to cleaner vehicles, engines and fuels. The list of issues included the level and timing of any requirements for sulphur in on-road diesel fuel.

Consultations through this process showed near universal support by stakeholders for Canada to align with US requirements for sulphur in on-road diesel. Stakeholders supporting alignment included the Canadian Petroleum Products Institute, Imperial Oil, Sunoco, Petro-Canada, North Atlantic Refining, the Greater Vancouver Regional District, the Manufacturers of Emission Controls Association, Toronto Board of Health, Canadian Trucking Alliance, and the Canadian Vehicle Manufacturers' Association. A few stakeholders want sulphur levels to be lower than 15 ppm (e.g., Volkswagen and Friends of the Earth). Husky Oil, while supporting harmonization with US fuel standards and timing, noted that it is "unable to meet the contemplated 15 ppm sulphur in diesel mark without making significant capital investment", and recommended a level of 50 ppm.

In a letter to Environment Canada dated December 13, 2000, the Canadian Petroleum Products Institute reiterated its "commitment to our position of general alignment with the US [on-road diesel standard], including the end point for sulphur content".

On February 17, 2001, the federal Minister of Environment published the agenda for cleaner vehicles, engines and fuels as a Notice of Intent in Part I of the Canada Gazette³. The Notice of Intent states that "Environment Canada intends to align with the final US level and timing for sulphur in on-road diesel fuel… The Canadian regulatory process will be initiated shortly with a discussion paper soliciting views from stakeholders on the need for and the form of "safety valve" provisions similar to those in the US final rule." (This document is that discussion paper.)

¹ Protocol between the Government of Canada and the Government of the United States of America amending the "Agreement between the Government of Canada and the Government of the United States of America on air quality". December 7, 2000.
² US Government. "Control of air pollution from new motor vehicles: heavy-duty engine and vehicle standards and highway diesel fuel sulfur control requirements; final rule". US Federal Registry, vol. 66, no. 12, pp. 5001-5194, January 18, 2001. https://www.govinfo.gov/content/pkg/FR-2001-01-18/pdf/01-2.pdf (PDF 1.8 MB)
³ Minister of Environment. A Federal Agenda for Cleaner Vehicles, Engines and Fuels. Canada Gazette, Part I, February 17, 2001, pp. 452-457.