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| 01/10/18

Ottawa unveils clean fuel standard affecting all sectors, not just transport


Ottawa has unveiled its plan for a national clean fuel standard targeting all use of fuels, not just within transportation, that aims to close 10 percent of the gap the country faces between its projected emissions by 2030 and its international climate pledges.

The strategy aims to achieve a cut in greenhouse gas emissions of 30 million tonnes (Mt) by the end of the next decade.  To put this in perspective, Canada needs to cut just under 300 Mt on its projected total emission levels (to 524 Mt from 815 Mt) by that time to keep our Paris Agreement pledge. If the fuel standard meets its goals, it would get us about a tenth of the way there.

Following a yearlong consultation, Environment and Climate Change Canada in December unveiled a regulatory framework outlining key elements of future legislation. What makes the federal standard truly a first of its kind in the country is that it will cover all fuel uses including by buildings and industry, not just transport, and not just liquid fuels but gaseous and solid ones (such as petroleum coke used in cement kilns). The framework even aims to deliver greater emissions mitigation than current carbon pricing rules are projected to achieve, echoing recommendations from some researchers that more politically acceptable policy options than taxation can achieve similar results.

There are two types of regulation that attempt to clean up fuels: renewable fuel mandates and clean fuel standards (CFS). The first attempts to increase the amount of renewable fuel being used in an economy. The second targets emissions intensity—the amount of greenhouse gases emitted per unit of energy. A CFS is more flexible than a mandate as it is indifferent to which fuel or technology. If alternatives such as electricity, natural gas, or hydrogen from biogas can deliver the same low-carbon standard that a renewable fuel can, that’s fine.

Five provinces already have mandates that require gasoline and diesel to contain a certain percentage of renewably-sourced fuel, most often supplied by ethanol, as does Canada (5% renewable content in gasoline; 2% in diesel).

But until now, only British Columbia had a CFS as well, both implemented in 2008. As of 2016, in the province, the carbon intensity of fuels must decline by 10 percent by 2020 and 15 percent by 2030.

The precise reduction target and baseline for a federal CFS has not yet been decided, but the government is considering an overall life-cycle carbon intensity reduction of 10 to 15 percent by 2030, and ratcheted up over time. In other words, unless the ambition is raised between now and when draft regulations are formally unveiled later this year, Ottawa will be asking the rest of the country to catch up to BC.

The federal government wants to track the full life-cycle emissions of a fuel, from extraction through to disposal, not just what is released during the combustion of a fuel. However, emissions from “indirect land-use change”—displacing agricultural production leading to land-use changes elsewhere—are hard to measure, although some jurisdictions such as California do put in the extra effort to do so.

Ottawa has decided not to consider these impacts. This presents an emissions reduction challenge as indirect land-use change is one of the key factors that makes the GHG emissions of many biofuels worse than fossil fuels, according to a UK Royal Academy of Engineering meta-analysis released last July assessing 250 studies on the topic globally.

In depth

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