Feds consider clean-fuel policy

The renewable fuels industry has a powerful ally in its attempt to maintain or increase biofuel mandates.

The Conference Board of Canada has come out in favour of doing just that in a recent briefing entitled Renewable Fuel Standards Within a Low-Carbon Fuel Strategy.

Environment and Climate Change Canada is in the process of developing a draft regulatory framework for a clean fuel standard (CFS).

It held a workshop in March in Ottawa to receive feedback on issues identified in a discussion paper it prepared on the subject.

One of the issues raised at the workshop was whether the existing ethanol and biofuel mandates should remain in place under a new clean fuel standard.

The objective of the clean-fuel standard is to achieve 30 million tonnes of annual greenhouse gas reductions by 2030. | File photo

Currently, gasoline must have five percent renewable content and diesel must have two percent.

Len Coad, author of the Conference Board briefing, believes the mandates should remain intact.

“Biofuels blending is how we are currently achieving reductions in greenhouse gas emissions, so to remove that in favour of a low carbon fuel standard that we don’t yet know how it would be structured or met could be a challenge for the industry,” he said.

In the briefing Coad goes further, suggesting a CFS is not attainable without mid- to high-level blending of renewables, such as E15 and E85 ethanol blends.

A renewable fuel standard or mandate sets a minimum renewable fuel content in gasoline and diesel fuel.

A CFS sets a maximum carbon content in fuel and allows suppliers to determine how to meet that standard.

“It is not at all focused on how that content is achieved,” said Coad.

California, Oregon and British Columbia are the only jurisdictions with existing clean fuel standards. Renewable fuels account for 75 to 99 percent of the greenhouse gas emission reductions under the CFS in those jurisdictions.

“If you look at British Columbia in particular, the low carbon fuel standard and the blend mandate are both in place and they appear to be working well together,” said Coad. “So then the question is: why would anyone feel the need to remove the blend mandate?”

Jeremy Moorhouse, senior analyst with Clean Energy Canada, said biofuel use in B.C. grew 73 percent under the CFS between 2010 and 2016 and in California it has gone up 41 percent over that same timeframe.

What happens in Canada will depend on how the regulations are crafted.

“If it’s designed like B.C. and California to really target the transportation sector, clearly biofuels could compete and you would see an increase in demand for those fuels,” he said.

But if Canada’s CFS takes a broader approach it could favour other fuels instead, such as renewable natural gas.

Farmers should be concerned about which direction the policy takes because Canada’s biofuel sector consumes 3.25 million tonnes of corn, one million tonnes of wheat, 200,000 tonnes of canola oil and 150,000 tonnes of soybean oil annually.

“It’s an important policy to weigh in on and comment on because we’re in the design period right now,” said Moorhouse.

Clean Energy Canada believes the biodiesel and ethanol mandates should remain in place, at least during the implementation phase of the CFS.

“Once the standard is in place you might consider removing them if the clean fuel standard is working as you’d expect,” he said.

Canada’s Ecofiscal Commission estimates the five percent ethanol mandate reduces greenhouse gas emissions (GHGs) by 2.1 million tonnes per year, or just over 1.5 percent of total road transportation emissions.

The objective of the clean fuel standard is to achieve 30 million tonnes of annual GHG reductions by 2030. Canada has committed to reduce total GHGs by 220 million tonnes annually by that same date under the Paris Agreement.

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