Compliance with the Clean Fuel Regulations

Overview

The Clean Fuel Regulations take a performance-based approach to reducing greenhouse gas emissions in Canada. The Regulations are designed to incentivize innovation and adoption of clean technologies and expand the use of low carbon intensity fuels throughout the economy.

The Regulations give fuel suppliers flexibility to meet the requirements in a cost-effective way that works best for them. They also create an incentive for industries to innovate and adopt cleaner technologies to lower their compliance costs.

The Regulations establish a credit market, where each credit represents a lifecycle emission reduction of one tonne of CO₂e. For each compliance period (typically a calendar year), a primary supplier will demonstrate compliance with their reduction requirement by creating credits or acquiring credits from other creators, and then using the required amount of credits for compliance.

Compliance credits can be created in three ways:

• Compliance Category 1: Undertaking projects that reduce the lifecycle carbon intensity of liquid fossil fuels (e.g., carbon capture and storage, on-site renewable electricity, co-processing);
• Compliance Category 2: Supplying low carbon fuels (e.g., ethanol, biodiesel); and
• Compliance Category 3: Supplying fuel or energy to advanced vehicle technology (e.g., electricity or hydrogen in vehicles).

The Regulations will complement other climate policies and investments, including the price on carbon pollution, methane regulations, the forthcoming oil and gas emissions cap, and the recently announced carbon capture, utilization and storage (CCUS) investment tax credit.

Regulations and supporting documents

Certain components of the Clean Fuel Regulations (Canada Gazette, Part II publication date: July 6, 2022) are in force, including:

• registration for primary suppliers, registered creators, foreign suppliers and carbon intensity contributors,
• applications for recognition of CO₂-e emission-reduction projects,
• applications for approval of carbon intensity, and
• compliance credit creation.

The following documents support the Regulations. Please note these documents may be periodically revised and re-published, so we recommend bookmarking this page if you are regularly referencing this material. 

Regulations and Regulatory Impact Analysis Statement

• Clean Fuel Regulations
• Regulatory Impact Analysis Statement – Clean Fuel Regulations

Verification and Certification

• Methods for Verification and Certification

Quantification Methods

• Quantification Method Development Guidance Document
• Quantification Method for Low-Carbon-Intensity Electricity Integration
• Quantification Method for CO₂ Capture and Permanent Storage
• Quantification Method for Enhanced Oil Recovery with CO₂ Capture and Permanent Storage
• Generic Quantification Method
• Quantification Method for Co-processing in Refineries

Technical presentations

Please contact us at cfsncp@ec.gc.ca for copies of technical presentations pertaining to the Regulations and supporting documents.

Credit and Tracking System

The Clean Fuel Regulations Credit and Tracking System (CATS) is the information technology system underpinning the Regulations. The system consists of the following components: registration of parties, applications for recognition of CO₂e emission reduction projects, applications for approval of carbon intensity, reporting for parties, verification activities management for third-party verification bodies, and the management of compliance credit creation and their transactions.

Please find below links for accessing CATS and documents intended for the user:

• Credit and Tracking System
• User Guides: 
  • Clean Fuel Regulations: Credit and Tracking System User Guide for Primary Suppliers, Registered Creators and Foreign Suppliers Version 2.1 (PDF)

    • This document provides guidance to Primary Suppliers, Registered Creators and Foreign Suppliers and their Authorized Agents, Authorized Administrators and Read/Write users on using the CATS for the purpose of conducting their report or notice submission activities under the Regulations.

      The second version of the CATS platform, released January 30, 2023, adds the following features:

      • create and submit credit-creation reports for registered creators
      • transfer credits for participants
      • track compliance credits
      • minor updates to existing features were also made.

      These features are in addition to the following existing features:

      • account creation
      • registration report submission
      • applications submission for: recognition of CO₂e-Emission-Reduction Project, Approval of Carbon Intensity, and Approval of New Pathway.
      • Administrative functions include adding users and performing other general functions according to the level of permission granted for each user role.

      More functions are expected in future releases.

  • Clean Fuel Regulations: Credit and Tracking System User Guide for Verification Bodies Version 2.1 (PDF)

    • This document provides guidance to Verification Body Organizations and their authorized agents on creating an account in CATS, and providing registration and accreditation information. At this time, no additional users are able to be on boarded.

      In order to complete a registration in CATS, a valid accreditation certificate meeting the requirements of the Clean Fuel Regulations is required.

      For any verification required for the 2023 reporting period, a verification body does not have to be registered in CATS prior to engaging in verification services, or to complete and submit their verification report to their client. This is to be done outside of CATS.

      The requirement to register in CATS will come into effect following the next update of CATS, planned for mid-2023.

      A verification body does however, need to be accredited according to the Clean Fuel Regulations to undertake verification activities for this reporting period in 2023, and towards that end, we encourage verification bodies to stay in close touch with their accreditation body to be prepared to apply to have the CFR-specific program added to the scope of accreditation.

      More functions are expected in future releases.

• Frequently Asked Questions

Carbon Intensity Determination

Fuel Life Cycle Assessment Model

The Government of Canada's Fuel Life Cycle Assessment (LCA) Model is a tool to calculate the life cycle carbon intensity of fuels and energy sources used and produced in Canada. Registered creators, foreign suppliers and carbon-intensity contributors may use the Fuel LCA Model for the purpose of creating credits under the Clean Fuel Regulations.

There are three main components of the Fuel LCA Model that are available in the Environment and Climate Change Canada (ECCC) Data Catalogue:

1. Fuel LCA Model Database: Contains a library of carbon intensity datasets and fuel pathways developed to model a carbon intensity specific to a fuel or an energy source.
2. Fuel LCA Model Methodology: Describes the methodology, data sources and assumptions that were used in the development of the Fuel LCA Model, and provides the rationale supporting the methodological approach.
3. Fuel LCA Model User Manual: Provides information on general definitions and concepts related to LCA from the perspective of the LCA Model. Also provides technical guidance on how to perform basic operations in the openLCA software that are required for the carbon intensity calculations.

For more information on the Fuel LCA Model, please contact the Fuel LCA Model team at modeleacvcarburant-fuellcamodel@ec.gc.ca.

Specifications for Fuel LCA Model CI Calculations and CFR Data Workbook

There are two other main components, specific to the Clean Fuel Regulations, that stakeholders can use in order to determine a carbon intensity. These are also available in the Environment and Climate Change Canada (ECCC)'s Data Catalogue:

1. CFR Specifications for Fuel LCA Model CI Calculations: Provides instructions for calculating carbon intensity values of fuels, energy sources and material input for the purpose of creating credits under the Regulations.
2. CFR Data Workbook: A spreadsheet that helps convert applicant data to ensure compatibility with the Fuel LCA Model. For the purpose of the Regulations, it must be used to carry out all calculations (i.e. unit conversion, calculation of allocation factors, etc.) prior to data entry in the Fuel LCA Model. 

For more information on the specifications and data workbook, please contact us at cfsncp@ec.gc.ca.

Engagement and consultation

From late 2016 to spring 2022, Environment and Climate Change Canada extensively engaged stakeholders, provinces and territories, Indigenous peoples, industries, and non-governmental organizations during the development of the Clean Fuel Regulations. Past engagement documents are available on engagements and consultations.