Reduction in the Release of Volatile Organic Compounds (Storage and Loading of Volatile Petroleum Liquids) Regulations

March 2025

The Government of Canada has finalized regulations to further reduce volatile organic compounds (VOCs) from a variety of petroleum sector facilities. The regulations were published in the Canada Gazette, Part II, on March 26, 2025. The VOC petroleum storage and loading regulations establish permanent national regulatory requirements for facilities of concern in communities across Canada.

These regulations covering petroleum storage tanks and loading operations represent a second phase of VOC regulations for the petroleum sector and respond to findings under Canada’s Chemicals Management Plan. The first phase of VOC regulations, the Regulations Respecting Reduction in the Release of Volatile Organic Compounds (Petroleum Sector), were finalized in 2020 to address emissions from process equipment at petroleum refineries, upgraders, and petrochemical facilities integrated with a refinery or upgrader.

The Government of Canada understands the importance of the energy sector to Canada’s economy. Developing Canada’s natural resources in cleaner, more sustainable ways will ensure our petroleum resources continue to contribute to the economy and support good jobs. Cost-effective technology solutions to meet the requirements are readily available, and industry will see cost savings over time through recovered petroleum products - that may be sold – once the vapour control equipment required under the Regulations is installed.

VOC emissions from upstream oil and gas extraction facilities are addressed by the federal Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) and corresponding provincial regulations under equivalency agreements.

Highlights of the VOC petroleum storage and loading regulations

The oil and gas sector is Canada’s largest source of VOC emissions. Sources of VOC emissions from petroleum and petrochemical facilities include leaks from process equipment, storage tanks, and loading activities. Total estimated VOC emissions from petroleum and petrochemical facilities covered by the VOC Phase 2 regulations are 55,841 tonnes, with approximately 63 per cent (35,287 tonnes) from storage and loading of petroleum products.

The Regulations introduce a nationally consistent approach to reducing VOC emissions from these sources. Current regulatory measures vary across the country, and jurisdictions with measures in place to control storage and loading emissions have significantly lower emissions than jurisdictions where no requirements are in place.

The Regulations require that petroleum liquid storage tanks and equipment that is used to load and unload petroleum liquids from pipelines, trains, trucks and ships (loading racks) be equipped with emissions control equipment. The operators of these facilities are required to install, inspect, maintain, and repair that equipment. The Regulations also include recordkeeping and reporting requirements for operators.

Facilities subject to the Regulations include petroleum refineries and upgraders; truck, rail, marine, and pipeline terminals; petrochemical facilities; bulk fuel facilities; and steel mills. It is estimated that about 434 facilities will be subject to the Regulations. These facilities are in every province and territory with many located in and around residential neighbourhoods.

Expiry of the May 2024 Interim Order

In May 2024, the Minister of Environment and Climate Change issued the Interim Order Respecting Releases of Benzene from Petrochemical Facilities in Sarnia, Ontario (the Interim Order) to address the urgent and significant danger of benzene emissions from nearby petrochemical facilities to human health. The Interim Order immediately applied specific requirements from the proposed regulations, including requirements for fully closed vents and vapour control systems on tanks that store benzene.

The requirements of the Interim Order complemented provincial actions, and together these measures resulted in a significant decrease in benzene emissions from the local facility, as well as lowered health risks for the Aamjiwnaang First Nation whose community is located in close proximity to numerous petrochemical facilities. Since the regulations are now in force and have the same effect to address emissions of benzene, the Interim Order is no longer in effect. These requirements apply to any facility that was subject to the Interim Order and to other facilities across Canada, to ensure continued reduction of health risks for local communities.

What we heard

The VOC petroleum storage and loading regulations were informed by extensive consultation and engagement.

This process included community and facility visits that began in May 2021 with the publication of a discussion paper which outlined a proposed approach to control VOC emissions from the storage and loading of petroleum liquids.

Proposed regulations were published for public comment in February 2024, and during the formal comment period (February 24, 2024, to April 24, 2024), 49 written submissions were received from a wide variety of industry associations and companies, non-governmental organizations, provincial, territorial and municipal governments, an Indigenous community and members of the general public. Since the publication of the proposed regulations, Environment and Climate Change Canada has also hosted technical webinars and held more than 70 bilateral meetings.

Some of the key comments received during consultations on the proposed regulations related to:

• The importance of the federal government taking accelerated and strong action to protect at risk communities and neighbourhoods located near facilities emitting harmful VOCs, including carcinogenic benzene.
• Competitiveness and cost considerations for industry, both from the perspective of cumulative impacts of numerous federal measures in Canada and in comparison to the United States where similar regulations have been in place for decades.
• Opportunities to clarify and refine vapour pressure criteria and test methods related to crude oil storage tanks.
• Implementation timelines for emissions control measures on benzene storage tanks and other sources of VOC emissions.
• Technical considerations related to large and complex facilities with many storage tanks.
• Considerations regarding bulk fuel facilities, in particular smaller facilities with lower emissions.
• Technical criteria for vapour destruction equipment.
• Supply chain considerations.
• Requirements for diluent and condensate tanks at upstream oil and gas facilities already covered by federal or provincial methane regulations.

The final regulations take into account the feedback received during consultations as well as information from engagement on technical aspects of the proposed regulations.

Health and environmental benefits

The impacts of VOC emissions on human health are well understood. They lead to the formation of ground-level ozone and particulate matter, notably particulate matter less than 2.5 micrometres in diameter (PM_2.5) that can travel deep into the human body. There is international consensus among leading health organizations including Health Canada that exposure to these pollutants increases the risks for a wide range of health problems, including asthma, lung cancer, heart and lung disease and heart failure, and contributes to premature deaths.

In addition, evidence shows that human exposure to certain VOCs, such as benzene, increases the risk of cancer. Benzene is included in the List of Toxic Substances under the Canadian Environmental Protection Act. The regulations will reduce emissions of benzene, a known human carcinogen. Health Canada recommends reducing exposure to carcinogens like benzene wherever feasible.

Preventative action to reduce emissions of VOCs including benzene will save lives, reduce health care costs, and lower the burden air pollution is having on the Canadian population. The regulations will generate significant environmental and health benefits:

• Actions required under these regulations are estimated to reduce VOC emissions by 488,000 tonnes over the 2025 to 2045 period. Once all control measures are in place, by approximately 2032, annual emissions of VOCs from covered facilities are expected to be about 25,545 tonnes lower than levels in the baseline scenario (2025).
• Between 2025 and 2045, it is estimated that air quality improvements from the regulations will result in approximately 150 fewer premature deaths, mainly associated with reduced exposure to PM_2.5 and ground-level ozone. In addition, better air quality is expected to result in 31,000 fewer days of asthma symptoms among youth and 91,000 fewer days of restricted activity among non-asthmatics. The total present value of health benefits resulting from these air quality improvements is estimated at $1.1 billion for the 2025 to 2045 period.
• Crude oil contains methane, which can evaporate during storage and loading operations. Reducing VOC releases from the storage and loading will also result in the reduction of methane emissions that contribute to climate change. In total, the regulations are expected to reduce methane emissions by 7,800 tonnes between 2025 and 2045, resulting in climate change benefits (reduced climate change damages) of about $24.3 million.
• The net benefits of the regulations are estimated to be about $299 million.

Costs and economic considerations

In order to minimize compliance costs, while still ensuring that health and environmental objectives are met, the regulations provide several flexibilities that prioritize work on higher-risk emission sources and allow facilities with lower emissions to use lower-cost or existing control measures. The requirements are also harmonized to the extent possible with existing requirements in other Canadian jurisdictions and longstanding regulations in the United States, where the petroleum industry has already implemented emission controls for VOCs.

An assessment by Environment and Climate Change Canada indicates that the incremental costs of compliance with the regulations represent a small fraction of the average annual operating expenditures for companies and fall within the typical variation of annual capital expenditures. This analysis indicates that compliance costs are not expected to significantly impact the competitiveness or profitability of covered sectors such as fuel production and distribution, crude oil storage, and petrochemical production. Sensitivity analysis was also completed, which indicated that the regulations would still deliver net benefits to Canadians, even with some potential increases under tested scenarios with higher compliance costs.

Impacts on the affordability of petroleum products is also expected to be minimal, with any increase in fuel prices for consumers expected to be well below one cent per litre.

The total compliance costs of the regulations for industry are estimated at approximately $1.2 billion between 2025 and 2045, with the majority of capital costs for the petroleum sector being incurred between 2026 and 2030.

However, the regulations will lead to recovered petroleum products, including gasoline, crude oil, and benzene by preventing their evaporation from storage tanks and during loading operations. The production benefits from recovered crude oil and gasoline associated with the regulations are estimated at $350 million, partially offsetting costs of the regulations for industry.

Protecting communities and environmental justice

Petroleum and petrochemical facilities in Canada are often located near urban areas, including Indigenous and low-income communities. This increases the local population’s risk of exposure to elevated VOCs, including benzene, emitted by these facilities in communities across Canada. Health experts agree there is clear evidence that exposure to benzene increases the risk of developing acute myeloid leukemia and other blood cancers over the long term. In numerous communities across Canada, elevated levels of benzene continue to be recorded in the air at the fenceline of facilities in the petroleum sector and are of particular concern for benzene exposure risk to nearby communities.

In 2023, the Government of Canada finalized a strengthened Canadian Environmental Protection Act that seeks to provide Canadians with better protection from exposure to toxic substances, including people at risk of developing health effects and those living in communities where exposure is high. These regulations are informed by that commitment, and the continuous efforts by communities like Aamjiwnaang First Nation and Sarnia to highlight the health risks of VOCs such as benzene, and to advocate for measures to reduce their exposure to this type of pollution.

Reducing benzene emissions from gasoline stations

In 2024, the Government of Canada published a notice of intent indicating that it is considering additional steps to limit benzene emissions that affect Canadians living around gasoline stations. Similar to health concerns related to emissions from the storage and loading of volatile petroleum liquids at terminals and bulk fuel facilities (addressed by the VOC regulations being published on March 26, 2025), a 2023 report by Health Canada concluded that Canadians living near gasoline stations may be at elevated risk to health from exposure to benzene emissions from underground gasoline storage tanks and other sources at gasoline stations.

Consultations on risk management options to address benzene emissions from gasoline stations were launched in the winter of 2024. Additional consultation and engagement are planned with provinces and territories, Indigenous peoples, industry, non-governmental organizations, the public and other interested parties.