On December 13, the Government of Canada released its Clean Fuel Standard Regulatory Framework, the latest stage in the development of regulations to complement the Pan-Canadian Framework on Clean Growth and Climate Change, by achieving 30 megatonnes of annual reductions in GHG emissions by 2030. The standard will apply to all fuels – gasoline and diesel, but also aviation fuel, natural gas for heating, and metallurgical coal. It will also apply to the full life cycle of fuels – the first jurisdiction in the world to do so, according to the Pembina Institute . The Clean Fuel Standard process began in November 2016, with consultations held throughout 2017, largely focused on the government’s Discussion Paper (February 2017). Comments received in that consultation were compiled in a November report: Clean fuel standard: Summary of stakeholder written comments on the Discussion Paper. In response to the December Framework release, comments on the technical details will be accepted from industry, provincial governments, non-governmental organizations until January 19, 2018. Draft regulations are promised for late 2018.
The Pembina Institute reaction highlights three noteworthy aspects of the proposed Canadian Fuel Standard Framework: 1. Sustainability and indirect land-use change issues are sidelined – which is “concerning and unacceptable” ; 2. Canada’s existing federal Renewable Fuels Regulations will remain in place for a short-term transition period, and the new GHG-intensity-based clean fuel standard will eventually replace them – ( an approach Pembina has previously recommended in its April 2017 submission to the government ); and 3. Pembina urges “the importance of timelines” – i.e. the longer it takes to implement these regulations, the more stringent they must be if Canada is to meet its emissions reduction target for 2030.
How important is the Clean Fuel Standard? It has been called the single most important policy tool to achieve Canada’s emissions reductions target for 2030. And in November 2017, Clean Energy Canada published “What a Clean Fuel Standard can do for Canada” in which Navius Research used two in-house models to simulate the impact of different Clean Fuel Standard designs on Canada’s economy. The report concluded, among other beneficial effects : “The policy would increase economic activity in clean fuels in Canada by up to $5.6 billion a year in 2030. It would also create up to 31,000 jobs for the skilled workers needed to build, operate and supply new clean fuel facilities.” A separate Technical Report explains the modelling and provides much more detail about all projections, including employment projections.
Also of interest: From the EcoFiscal Commission, A delicate (im)balance: policy interactions and the federal clean fuel standard and an April 2017 Submission to the Clean Fuels Standard consultations from the Pembina Institute, Equiterre, Environmental Defence, and the Conservation Council of New Brunswick.
The provincial government released the consensus report of Phase 1 of the Alberta Oil Sands Advisory Group on June 16 – proposing a process to comply with the the legislated 100 megatonne emissions limit for oil and gas production, as required by the Climate Leadership Plan. The recommendations for early action focus on encouraging lower emission intensity production through technological innovation, and building information and reporting systems to drive improvements. Those information systems could also trigger reviews and possible penalties if emissions approach 80% or 95% of the 100 megatonne limit. According to an article in Energy Mix, “The industry is staking its future on the hope that it can simultaneously increase production and reduce production emissions, an approach that is seen as favouring the largest operators in the tar sands/oil sands over smaller companies. ” An article in the Edmonton Journal provides commentary from the oil industry perspective.
The Executive Summary of the report is here ; the full Report is here . The government will start consultations with key stakeholders immediately, before proceeding with Phase 2 of policy design. The goal is to have regulations in place by 2018.
The Report from the Canadian Commissioner of the Environment and Sustainable Development states that, in addition to failing to develop a national framework, enact any legislation that targets climate change, or release long-awaited oil and gas regulations, Canada’s tar sands monitoring is inadequate, neglects cumulative impacts, and lacks a plan beyond next year. The tar sands are Canada’s fastest growing source of emissions. Commissioner Gelfand also highlighted uncertainty surrounding which projects are subject to an environmental assessment and inadequate public and aboriginal consultation following the introduction of Bill-C45 in 2012, which profoundly altered environmental legislation in Canada. She also noted the dire need to improve planning in the Arctic, as shipping increases in the absence of updated navigation information or emergency response strategies.
Read the 2014 Fall Report of Commissioner of the Environment and Sustainable Development at: http://www.oag-bvg.gc.ca/internet/English/parl_cesd_201410_e_39845.html (English), and http://www.oag-bvg.gc.ca/internet/Francais/parl_cesd_201410_f_39845.html (French). The Commissioner appeared before the House of Commons Standing Committee on the Environment and Sustainable Development to discuss her report on October 8; see the transcript at:
http://www.parl.gc.ca/HousePublications/Publication.aspx?DocId=6723122&Language=e&Mode=1&Parl=41&Ses=2(English), and http://www.parl.gc.ca/HousePublications/Publication.aspx?DocId=6723122&Mode=1&Parl=41&Ses=2&Language=F (French). See “Highlights of the Environment Commissioner’s Fall Report” from the CBC at: http://www.cbc.ca/news/politics/highlights-of-environment-commissioner-s-fall-report-1.2790164.
For reaction see “Commissioner’s report shows Canada must do more for environment” from the David Suzuki Foundation at: http://www.davidsuzuki.org/blogs/science-matters/2014/10/commissioners-report-shows-canada-must-do-more-for-environment/; “Treading Water on Climate Change: Sierra reacts to Environment Commissioner’s Report” from Sierra Club Canada at: http://www.sierraclub.ca/en/report-fail; and “No Overall Vision:” Scathing New Audit from Environment Commissioner Exposes Canada’s Utter Climate Failure” from Desmog Canada at: http://www.desmog.ca/2014/10/07/no-overall-vision-scathing-new-audit-environment-commissioner-exposes-canada-s-utter-climate-failure.
The Petroleum Services Association of Canada has unveiled a new voluntary fracking code of conduct, signed by 11 companies. The code, which covers technical and environmental standard practice and guidelines for company engagement with stakeholders, comes after six months of nation-wide meetings with environmental and community groups, local governments and land owners. Industry representatives claim that most companies already follow the standards in the code, and that compared to other jurisdictions, Canada has long had stricter regulations on fracking. Read the press release by the Petroleum Services Association of Canada at: http://www.psac.ca/wp-content/uploads/PSAC_Media_Release_October_30.pdf and the Statement of Principles and full Code of Conduct from a link at: http://www.oilandgasinfo.ca/working-energy-commitment/hydraulic-fracturing-code-of-conduct/.
While Canada waits for the new oil and gas regulations promised for Spring 2013 by Environment Minister Kent, the Pembina Institute has released its own recommendations for what it calls this “make-or-break moment for Canada’s climate credibility”. Author Claire Demerse recommends: the oil and gas industry reduce emissions intensity by 42 % ; the technology fund levy for those who don’t meet the emissions reduction target should increase to at least $100 per tonne by 2020; the current unlimited access to offset credits for companies should end.
Read Getting on Track to 2020: Recommendations for Greenhouse Gas Regulations in Canada’s Oil and Gas Sector from links at:http://www.pembina.org/pub/2427 .
In Alberta, discussion is underway for reform of the provincial carbon pricing system, with the media reporting proposals of a 40% target to improve emissions intensity, and a compensating payment of $40 per tonne if that is not achieved.
Read “Carbon levy talks in early stages, Alberta environment minister confirms” in the Edmonton Journal, April 4, 2013 at:http://www.edmontonjournal.com/technology/Alberta+reviewing+climate+change+policy+McQueen+confirms/8195862/story.html, and See What you need to know about Alberta’s 40/40 carbon pricing proposal, by Simon Dyer (April 5, 2013) at the Pembina website: http://www.pembina.org/blog/707.