Canada’s Clean Fuel Standard: how it will work

The Clean Fuel Standard is a major element of Canada’s climate strategy.

Once implemented, the Standard will help drive clean growth in Canada, while reducing greenhouse gas emissions by 30 million tonnes annually by 2030 – equivalent to taking 7 million cars of the road.

The Clean Fuel Standard will require producers, importers or distributors to reduce the carbon intensity of fuels, also known as the carbon footprint. Carbon intensity is the measure of the greenhouse gas emissions associated with production, processing, distribution and use of a fuel.

The Clean Fuel Standard will set different pollution-reduction targets for gas, liquid and solid fuels. These targets will drive investments in clean energy and clean technologies that will cut carbon pollution further and create new opportunities for Canadian clean fuels producers and other clean technology providers.

The Clean Fuel Standard will be technology-neutral, meaning that producers, importers and distributors will have the flexibility to meet the targets in many different ways, with actions or investments that make sense for them.

Actions can include reducing emissions along the fuel supply chain, substituting carbon-based fuel with renewable fuel, and making investments that support cleaner options such as electric vehicles.

On December 13, the Government of Canada published a Regulatory Framework, outlining the key parts of the Clean Fuel Standard, which include:

• the fuels to which it applies;
• how it will apply to liquid, gaseous and solid fossil fuels used in transportation, industry and buildings, including homes;
• the industries it will regulate; and
• how the regulated industries will be able to comply.

The Clean Fuel Standard will be designed in a way that results in minimal costs for ordinary Canadians. Other jurisdictions that have put similar fuel standards in place have reported minimal increases in costs such as those associated with fuelling cars.

Without the standard, it would be difficult for Canada to meet its Paris climate commitment, and Canadian fuels would remain more polluting than necessary. With this standard, Canada will benefit from the investment that is needed to achieve emissions reductions and that will promote innovation and create new jobs in many of Canada’s clean technology sectors. No other jurisdiction has a standard that will achieve emissions reductions from fuels used by all sectors. This groundbreaking approach is ambitious but achievable, and will help to drive clean growth in communities across Canada.

By consulting with stakeholders, the government will make sure the design of the Clean Fuel Standard Regulations is efficient and effective.

What happens next?

With the publication of the Regulatory Framework, officials from Environment and Climate Change Canada will engage industry, other governments, non-governmental organizations and other stakeholders to work through the technical details of the Clean Fuel Standard. Our aim is to publish draft regulations by late 2018.

The government is committed to ensuring that interested and affected parties have the opportunity to take part in open, meaningful consultations.

The Pan-Canadian Framework on Clean Growth and Climate Change

In December 2016, the Government of Canada, along with most provinces and territories agreed to a made-in-Canada climate plan called the Pan-Canadian Framework on Clean Growth and Climate Change, to meet our Paris climate target and grow the economy.

In the Pan-Canadian Framework, territorial governments and the Government of Canada committed to work together to find clean growth and climate solutions that address the unique circumstances of the territories.

Other federal actions to address climate change and support a clean healthy environment

Implementing a Clean Fuel Standard is just one way the Government of Canada is addressing climate change. The government is also investing in Canada’s communities, transportation and electricity systems, businesses, industries, innovators and entrepreneurs, and research and development projects.

Global momentum is driving a move towards cleaner economic growth. Canadian businesses are already taking advantage of this opportunity. The government is making investments and adopting regulations like the Clean Fuel Standard that enable Canadian businesses and workers to participate in this opportunity.