RFA, USGC, Growth Energy comment on Canada’s CFS proposal

By Erin Voegele | March 05, 2021

The Renewable Fuels Association, U.S. Grains Council and Growth Energy on March 4 submitted joint comments to Environment and Climate Change Canada in support of proposed regulations for the country’s Clean Fuel Standard.

The government of Canada on Dec. 18 published proposed regulations for its CFS and opened a 75-day public comment period.  Final regulations are expected to be published later this year, which the CFS scheduled to come into force on Dec. 1, 2022.

The proposed CFS would require fossil fuel primary suppliers, including producers and importers, to reduce the carbon intensity of the liquid fossil fuels they produce and import into Canada from 2016 carbon intensity (CI) levels by 2.4 grams of carbon dioxide equivalent per megajoule (gCO2e/MJ) in 2022, increasing to 12 gCO2e/MJ in 2030.

The CFS takes a performance-based approach to reducing greenhouse gas emissions. The program is designed to incentivize innovation and adoption of clean technologies while giving fuel suppliers to meet requirements in a cost-effective way that works best for their businesses. It also creates an incentive for industries to innovate and adopt cleaner technologies to lower their compliance costs.

Under the program, compliance credits can be created in three ways, including by undertaking projects that reduce the lifecycle carbon intensity of fossil fuels, such as carbon capture and storage (CCS) or renewable electricity; supplying low carbon fuels, such as ethanol and biodiesel; or supporting the switch from fossil fuels to lower carbon fuels or energy, such as electricity or hydrogen in vehicles.

In their comments, the RFA, USGC and Growth Energy expressed support for the proposed regulations. “The proposed regulation takes a market-based approach to driving carbon reductions in the Canadian fuels market, providing an attractive model for other countries to follow,” the organizations said. “Canada should be applauded for showing global leadership on the implementation of a clean fuel standard, and it is encouraging to see both the United States and Canada taking steps to slash greenhouse gas emissions from transportation. Renewable fuels have already played a crucial role in jump-starting decarbonization efforts in both countries, and policy initiatives like Canada’s clean fuel standard will further accelerate those efforts.”

The organizations also noted the importance of allowing renewable fuel producers to account for carbon capture and sequestration in their carbon intensity scores, regardless of whether the fuel is produced in Canada or the United States.

In addition, the organizations stated that the regulation should adopt an aggregate compliance approach for applying land use and biodiversity criteria for all U.S. and Canadian biofuel feedstocks.

Finally, the groups commented about the fuel lifecycle analysis model used to calculate the carbon intensity value for the regulation. The decision to create yet another new lifecycle analysis model, and how it will be different than the methods already in use, has caused uncertainty. Releasing the details of the proposed lifecycle analysis approach now—even if not complete—would be beneficial to the public stakeholder process.

This regulation, coupled with the recent announcement in the United Kingdom that it is moving from E5 to E10 by September, shows that more countries are committed to expanding the role of biofuels in meeting their Paris Agreement commitments and their long-term environmental goals, the groups noted.