B.C. Proposes Significant Changes to Low Carbon Fuel Standard

The Government of British Columbia (B.C.) has introduced Bill 15, the Low-Carbon Fuels Act (LCFA), to replace the Greenhouse Gas Reduction (Renewable and Low Carbon Fuel Requirements) Act (the GGRA) and update the Renewable and Low Carbon Fuel Requirements Regulation, which together are known as B.C.’s low carbon fuel standard (LCFS). The government indicated that the new LCFA is meant to make its greenhouse gas (GHG) reduction legislation easier to understand, administer, and enforce. This bulletin briefly highlights key changes to the LCFS.

Proposed changes to the LCFS include:

• Fuel for Aviation and Marine Use. The LCFA would include fuel supplied for aviation and marine use, thereby ensuring that all fossil-derived transportation fuels supplied in B.C. are subject to carbon-intensity requirements and generate market opportunities for a wider range of low-carbon fuels.
• Direct Air Capture and Sequestration. The LCFA would authorize the provision of compliance credits for direct air-capture and permanent sequestration of GHGs, which is intended to support investments in technologies that remove CO₂ from the atmosphere.
• Increase Use of Low-Carbon Products, including EVs. The LCFA would require some utilities to use a portion of their revenues from the sale of low-carbon fuel credits for programs dedicated to increasing the use of low-carbon products. This is intended to further supports the purchase of electric vehicles.
• Expand Access for Credit Trading. The LCFA would expand access for earning low-carbon fuel credits and engaging in credit trading to persons other than fuel suppliers. The government indicated that this will provide a new funding mechanism for businesses, communities, academic institutions, and others that may commercialize new fuel production methods or develop clean-energy technologies that reduce GHG emissions.
• Provide Clarity. The LCFA is intended to make the LCFS easier to administer and enforce, enhance understanding, and provide regulatory certainty for fuel suppliers and those making investments in low-carbon fuels.

The LCFA includes several transitional provisions including affirming that a person who has a balance of validated credits under the GGRA immediately before its repeal has a starting balance under the LCFA that is equal to the amount of those credits.

For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.