Clean Fuel Standard: timelines, approach and next steps

Clean Fuel Standard Update: July 2018

Approach and regulatory development timeline

The Government of Canada is committed to developing a Clean Fuel Standard that will reduce carbon emissions from all fuels by 30 million tonnes in 2030. The standard works by setting lifecycle carbon intensity requirements for liquid, gaseous and solid fuels used in transportation, industry and buildings that become more stringent over time. The Clean Fuel Standard is one of the largest emissions-reduction policies in our climate and clean growth plan.

Since announcing the policy in late 2016, Environment and Climate Change Canada (ECCC) has engaged broadly and listened to stakeholders about the design of the policy. ECCC recognizes the need for additional time to work with interested parties to conduct robust technical and economic analysis to ensure that the Clean Fuel Standard achieves its goal while maintaining Canadian competitiveness.

As a result, ECCC is adjusting its timelines for the development of the Clean Fuel Standard. The revised timelines will allow the standard to support the transition to lower-carbon fuels while maintaining Canada’s competitiveness, encouraging growth in Canada’s low-carbon fuels industry and creating new economic opportunities across the country.

The revised approach starts with the development of the standards for liquid fuels, followed by gaseous and solid fuels together. The new timelines are:

  • for liquid fuels:  publish proposed regulations in spring 2019 and final regulations in 2020, with requirements coming into force by 2022
  • for gaseous and solid fuels:  publish proposed regulations in fall 2020, final regulations in 2021 with requirements coming into force by 2023

In fall 2018, ECCC plans to publish two documents to guide further engagement on the design of the standard:

  • a regulatory design paper that will provide more information about the design of the policy, including the proposed allocation of the overall 30-million-tonne target among the three fuel streams.
  • a cost-benefit analysis framework outlining the proposed analytical approach (models, data and key assumptions) for assessing the costs and benefits of implementation of the Clean Fuel Standard for the liquids stream.

Lifecycle assessment model

A robust, transparent, and modern lifecycle assessment model is required to support the development and implementation of the Clean Fuel Standard. The model will calculate greenhouse gas emissions using a lifecycle approach, in order to determine the carbon intensity of the various fuels used in Canada.  Environment and Climate Change Canada has issued a request for proposals on the Government of Canada’s Buy and Sell web site to develop the model. The timelines for the model’s development are:

  • request for proposals on the Government of Canada’s Buy and Sell: July 2018
  • draft model and values: spring 2019
  • interface and final software model: spring 2020
  • independent review launched: mid 2020
  • public launch of model: end of 2020

Next steps

Environment and Climate Change Canada will continue technical regulatory design consultations through the Clean Fuel Standard Technical Working Group and the Multi-stakeholder Consultative Committee.

On regulatory design: ECCC will continue consultations on the regulatory design of the liquid stream through to spring 2019, followed by consultations on the proposed regulations in the summer and fall 2019. Consultation on the regulatory design for the gaseous and solid fuel stream will continue through 2020, but at a slower pace initially, with more frequent discussions starting in winter 2020.

On economic impacts: ECCC will begin consultations on the cost-benefit analysis framework for liquid fuels in fall 2018 and conclude those consultations in the winter of 2019.  For the gaseous and solid fuel streams, consultations will be undertaken in early 2020 on the cost-benefit analysis framework for the Regulatory Impact Analysis Statement to be used for these streams.

Feedback on this update or on the Clean Fuel Standard in general, is welcome at ec.cfsncp.ec@canada.ca.

Timeline summary

  • Summer 2018: Environment and Climate Change Canada will issue a request for proposals (Government of Canada’s Buy and Sell) to develop a modern lifecycle assessment model to support the Clean Fuel Standard
  • Fall 2018: publication of a regulatory design paper for public comment, including the proposed allocation among the three streams of the 30 million tonne reduction target
  • Fall 2018: publication of a cost benefit analysis framework, outlining the proposed analytical approach (models, data and key assumptions) to be used for the cost benefit analysis for the liquid stream
  • Fall 2018 to winter 2019: consultations with stakeholders on the design of the regulations
  • Spring to summer 2019: proposed regulations for the liquid fuel stream of the Clean Fuel Standard published in Canada Gazette, Part I
  • 2020:  final regulations for the liquid fuel stream of the Clean Fuel Standard published in the Canada Gazette, Part II
  • 2020: ongoing consultations with stakeholders on the design of the gaseous and solid fuel stream regulations
  • Late 2020: proposed regulations for the gaseous and solid fuel streams of the Clean Fuel Standard published in the Canada Gazette, Part I
  • 2021: final regulations for the gaseous and solid fuels streams of the Clean Fuel Standard published in the Canada Gazette Part II
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