Ottawa proposes Clean Fuel Regulations changes

The federal government is proposing changes to the Clean Fuel Regulations that it says would help Canadian low-carbon fuel producers compete in the domestic market, Environment and Climate Change Canada said in a news release issued Oct. 27.

The amendments are to be published in the Canada Gazette, Part I, on Oct. 30, followed by a 75-day public consultation. Environment Minister Julie Dabrusin said the changes are meant to support the sector and ensure “resilient long-term emissions reductions.”

The department said the amendments would close a competitiveness gap facing Canadian low-carbon fuel producers, such as ethanol makers. They would also create conditions for more investment in projects such as carbon capture at ethanol plants and co-processing of bio-based feedstocks, including canola oil, alongside crude oil at refineries. A third aim is to make it easier and cheaper for companies to comply with the rules.

The Clean Fuel Regulations push companies to cut emissions across the fuel supply chain. Environment and Climate Change Canada said the credit market created by the rules has grown to more than $3 billion since they took effect. It said the rules have generated more than $185 million in credits for residential and public electric vehicle charging.

Canadians use almost 200 million litres of gasoline and diesel a day, according to the department, which said a strong domestic low-carbon fuel industry is needed to cut those emissions over time. Co-processing projects are now running at six refineries across the country, it said, and new canola crush plants have been built to supply feedstock.

A separate Biofuels Production Incentive program is open for applications until December 2027. It offers up to $372 million in production-based support for biodiesel and renewable diesel producers.

The release did not say how much the amendments would cost industry or government, or how much they would change emissions. Those details are expected in the regulatory text published with the Gazette notice. Companies, provinces, territories and Indigenous partners can comment during the consultation period.

The proposal comes as fuel costs remain a political issue. Canada News Media has reported on Statistics Canada figures showing fuel sales rose one per cent and on the European carbon border tariff that exposes Canadian metals exporters.

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