Articles related to the Clean Fuel Standard

CIAC welcomes Federal Government’s decision to delay Clean Fuel Standard for further analysis

On July 19, the Federal Government announced an adjusted timeline for the Clean Fuel Standard (CFS), stating, “Environment and Climate Change Canada (ECCC) recognizes the need for additional time to work with interested parties to conduct robust technical and economic analysis to ensure that the CFS achieves its goal while maintaining Canadian competitiveness.”

CIAC welcomes the decision to delay the CFS and supports the government’s efforts to work with stakeholders on the regulation. As it is currently being proposed, the CFS will include standards for industry and buildings along with transportation, making it the first of its kind in the world. It is a complex regulatory piece requiring thorough engagement and careful development to ensure that it complements, and does not duplicate, current provincial and federal carbon pricing policies.

The new approach will first develop standards for the liquid fuel stream followed by gaseous and solid fuel streams. The timeline has been adjusted as such:

  • For liquid fuels:  Publish proposed regulations in spring-summer 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

This fall, we can expect the release of the regulatory design paper and a cost-benefit analysis framework. These documents will allow industry to better understand the economic breakdown and implementation of the regulation. CIAC is supportive of carbon pricing and reducing emissions, however, the CFS has many direct and indirect implications and costs for the chemistry industry.

We are hopeful that the extended timelines for the CFS will provide for better consultation and cooperation between industry and the government to create a regulation that supports a low-carbon economy, competitiveness and innovation for the future of Canadians.

CIAC will continue to advocate on behalf of our member-companies and looks forward to working with the federal government to ensure the CFS framework is realistic, effective, and addresses industry concerns on competitiveness and feasibility.

CIAC appears before Senate Committee studying Bill C-74 to discuss carbon-pricing legislation

Isabelle Des Chênes, CIAC Executive Vice-President, and Shannon Watt, Director of Environment and Health Policy, appeared before the Senate Committee on Energy, the Environment and Natural Resources on May 3, 2018. Senators are conducting a pre-study of the provisions of Bill C-74, the budget implementation bill, that deal with the government’s plan to price greenhouse gas emissions.

CIAC and its members support efforts to reduce global carbon emissions and have worked collaboratively with both provincial and federal officials to ensure that carbon policies and pricing mechanisms improve environmental performance, avoid double-regulation and maintain Canada’s competitiveness.

Ms. Des Chênes noted that “Canada should support a carbon policy that recognizes emission-intensive, trade-exposed sectors and encourages investments in the Canadian chemistry sector. Additionally, given the incredible investments in innovations and technologies to improve performance around air emissions and climate change, Canada’s proposed output-based allocation process should focus on benchmarking Canadian chemistry operations and performance against global competitors.”

Additionally, Ms. Watt reinforced the point that government needs to provide a comprehensive analysis of the cumulative impacts of the suite of climate change policies including the proposed Clean Fuel Standard.

Watch the CPAC recording: Fuel Suppliers Discuss the Carbon Tax

Uncertainty of federal Clean Fuel Standard problematic for industry

As part of Alberta Chemistry Day, the Chemistry Industry Association of Canada (CIAC) hosted a panel on how the proposed federal Clean Fuel Standard (CFS) for industry could work within Alberta’s Climate Leadership Plan.  Dave Sawyer of EnviroEconomics and Bob Savage, Assistant Deputy Minister for Alberta Environment and Parks, shared concerns about the uncertainty for industry of the policy interactions of a federal CFS with provincial climate change programs.

The proposed CFS would be a first-of-its-kind globally as it would include fuels used in industry, buildings, and homes along with those used in transportation. Panelists commented that implementation will be complicated given the multiple layers of provincial and federal regulation already in place, and could lead to duplication of incentives and/or penalties for industry. 

One of the panelists suggested that consideration should be given to a phased-in approach to CFS for each sector starting initially with transportation. This would allow provincial-level regulatory frameworks to be established and to better understand their impact on greenhouse gas (GHG) reductions.  Going forward, greater transparency on the CFS development would also be important. 

CIAC member-companies expressed concerns that reducing the carbon intensity of feedstocks and some combustion fuels may be complex and may result in costly, if not prohibitive, modifications that might not lead to the most cost-effective carbon reductions. If not handled thoughtfully and transparently, a poorly designed CFS could affect profits, operations, and opportunities to invest and to modernize within Canada.

The chemistry industry is supportive of carbon pricing and remains committed to working with governments to develop effective long-term regulatory policies that successfully achieves GHG emissions reductions without impeding innovation, investments, jobs, and economic growth.

CIAC seeks an exemption for industrial uses from the Clean Fuels Standard proposal

In late 2016, the Minister of the Environment and Climate Change Canada, Catherine McKenna, announced the government’s intention to introduce a Clean Fuel Standard (CFS). Since then, the Chemistry Industry Association of Canada (CIAC) has been engaged with the government through the stakeholder consultation process.  

The goal of the proposed standard is to achieve a 30 megatonnes of annual reductions in greenhouse gas (GHG) emissions by 2030. At the end of February, the government distributed a focused discussion paper to support their work on establishing the scope and key attributes of the regulation. That discussion paper can be found at: http://www.ec.gc.ca/lcpe-cepa/default.asp?lang=En&n=D7C913BB-1.

There are both competitiveness issues relating to the potential costs of this regulation, and potential technical barriers to its implementation. There is also an issue on the interplay of this proposal with several other GHG and air quality regulations which are in various stages of development. It not clear how this regulation will interrelate to other GHG regulations, provincial cap and trade requirements and the establishment of the national carbon price.

As it stands right now, CIAC is engaged with other industrial sectors on a position seeking an outright exemption for industrial uses from the CFS proposal.

The government has a robust consultation plan, and they expect to have a draft regulation in place mid-2018, with a final regulation expected for mid-2019.