Clean Fuel Standard delay seen as opportunity

COVID-19 is forcing a delay in the implementation of Canada’s proposed Clean Fuel Standard (CFS).

Regulations for the liquid fuel class of the standard will now be published in the fall of 2020 rather than June 2020.

Implementation of the standard has been pushed back four months from the original timeline of Jan. 1, 2022.

“We can work with that kind of delay,” said Ian Thomson, president of Advanced Biofuels Canada.

“None of this is surprising to anybody.”

He noted that Ottawa had previously telegraphed that all new federal regulatory processes were going to be delayed because of the pandemic.

The important thing is that the Liberal government appears to be as committed as ever to implementing the standard, said Thomson.

He sees the delay as an opportunity to work with Environment Canada on hashing out the details of the standard to ensure they have a meaningful impact on the government’s climate objectives.

The federal government has been working on the CFS since it was announced in late-2016.

The objective of the standard is to achieve 30 million tonnes of annual reductions in greenhouse gas (GHG) emissions by 2030.

It will provide an “important contribution” to the government’s commitment of reducing national emissions 30 percent below 2005 levels by 2030, stated the government.

Thomson said the impact the CFS will have on grains- and oilseeds-based biofuel demand depends on the wording contained in the regulation.

Specifically, the biofuel industry wants to know if the 30-million-tonne reduction in GHG emissions will be new reductions or if the government plans to double-count reductions from other federal and provincial programs.

“If you’re going to be counting what goes on in a provincial regulation that’s going to happen anyway, there is no new demand for us,” he said.

“How they do the details really does matter to us.”

Thomson said if it is a genuine reduction, that would represent a 10 to 12 percent decrease in carbon intensity over the eight-year period of the CFS and that would be significant.

Canada needs a program of that clout if it is going to meet its stated target of reducing emissions by 30 percent over 2005 levels by 2030, he said.

California and British Columbia are two jurisdictions that have implemented clean fuel standards and in those two cases, biofuels have provided the vast majority of the GHG reductions.

Thomson said the biofuel sector has done some modelling showing the federal CFS could be a big boon for the crops sector if it is properly designed.

He noted that the canola industry is particularly enthused about the CFS because it is harder to electrify the diesel pool than it is the gasoline pool.

An estimated 24 percent of Canada’s GHG emissions come from the transportation sector.

The Canola Council of Canada estimated that expanding the current national biodiesel mandate to five percent from two percent will reduce GHG emissions by 4.8 million tonnes per year or 16 percent of Environment Canada’s CFS objective if it was all canola biodiesel.

It estimated that would generate an additional $1.6 billion per year in direct farm income.

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