Compliance options to meet the Clean Fuel Standard

Overview

The Clean Fuel Standard is a performance-based approach. It is designed to incentivize innovation and adoption of clean technologies and expand the use of low carbon fuels throughout the economy.

The Clean Fuel Standard gives fuel suppliers flexibility to meet the requirements in a cost-effective way that works best for them. It also creates an incentive for industries to innovate and adopt cleaner technologies to lower their compliance costs.

Compliance credits can be created in three ways:

• Undertake projects that reduce the lifecycle carbon intensity of fossil fuels (e.g., carbon capture and storage, renewable electricity);
• Supply low carbon fuels – like ethanol in gasoline or biodiesel in diesel; and
• Support switching from fossil fuels to lower carbon fuels or energy like electricity or hydrogen in vehicles.

The Clean Fuel Standard will complement other climate policies and investments, including carbon pollution pricing.

How it drives innovation and economic growth

The demand for credits under the Clean Fuel Standard will create a market signal for investment in low-carbon-intensity fuels and technologies. Statistics Canada found that Canada’s low carbon economy was already generating over $66 billion and jobs for more than 317,000 Canadians in 2018.

Timelines to implement the standard

• December 18, 2020: Publication of proposed Regulations for the Clean Fuel Standard in the Canada Gazette, Part I, followed by a 75-day formal comment period.
• Late 2021: target to publish final Regulations.
• December 1, 2022: The Clean Fuel Standard  reduction requirements come into force.

Supporting documents

This information will be published on December 18, 2020, and is meant to support the formal 75-day consultation period that ends on March 4, 2021. Updated versions will be published alongside the final regulations.

• Proposed Clean Fuel Regulations
• Regulatory Impact Analysis Statement - Proposed Clean Fuel Regulations
• Method for Validation, Verification and Certification
• Quantification Method Development Guidance Document
• Quantification Method for Low Carbon-Intensity Electricity Integration 
• Quantification Method for CO₂ Capture and Permanent Storage
• Fuel LCA Model Methodology

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

Life cycle assessment model

Information for industry, voluntary participants, and facilities regulated by the Clean Fuel Standard

A robust, transparent, and modern lifecycle assessment (LCA) model is being developed to support the implementation of the Clean Fuel Standard. In order to determine the carbon intensity of the various low carbon fuels produced in and imported into Canada, the model will set carbon intensity values, accounting for the amount of GHGs from all stages in a fuel’s lifecycle, from feedstock extraction to combustion, per unit of energy.

The timelines for the model’s development are:

• Late 2019 to early 2020: critical review of the fossil fuel methodology.
• Late 2020 to early 2021: critical review of the low carbon fuel methodology.
• Late 2020: publication of the Fuel LCA Model Methodology, followed by a 75-day formal comment period.
• 2021: public launch of the Fuel LCA Model in parallel with the publication of the final Regulations for the Clean Fuel Standard in Part II of the Canada Gazette.
• Post-CGII:
  • launch of Stakeholder Technical Advisory Committee to provide technical feedback and support to the ongoing development of the Fuel LCA Model.
  • ongoing maintenance and technical updates to the Fuel LCA Model.

Engagement and consultation

Environment and Climate Change Canada has engaged stakeholders, provinces and territories, Indigenous peoples, industries, and non-governmental organizations to seek views on the design for the development of the Clean Fuel Standard. See engagements and consultations.