March 2025

The Government of Canada on Saturday published an extra edition of Canada Gazette, Part II to eliminate the “consumer-facing” carbon price (i.e., the federal fuel charge), effective April 1, 2025. The change was originally announced by new Prime Minister Mark Carney on Friday as his first official act. The new regulations amend the Greenhouse Gas Pollution Pricing Act (GGPPA) and related regulations. This bulletin briefly summarizes the amendments and highlights key aspects of the associated Regulatory Impact Analysis Statements (RIASs). The amendments most consequentially set the rate of charge applicable after March 31, 2025 set out in Table 5 of Schedule 2 to the GGPPA to “zero” dollars for all 22 types of fuel. The rates previously set out in that table represented a carbon price of $80 per tonne in 2024-25. The Governor in Council (i.e., the Governor General acting on the advice of Cabinet) has the authority to set the fuel charge rates to zero under section 166(4) of the GGPPA. The government has also made related amendments to the Fuel Charge Regulations (particularly around removal of registration requirements after March 31, 2025) and coordinating amendments to the Output-Based Pricing System (OBPS) Regulations. The RIASs note that: The government estimates that the elimination of the fuel charge will lead to a loss of 12.57 Mt cumulative GHG emissions reductions from 2025 to 2030 (p. 12). The monetized cost of foregone emissions reductions over the 2025-2030 period of the elimination of the fuel charge is estimated to be about $3.83B (in 2024 dollars, discounted at 2% to 2025-26), using social cost of carbon figures for 2025 to 2030 (p. 13). The elimination of the fuel charge increases Canada’s GDP by 0.5% in 2030 (p. 14). The total welfare gains, not accounting for the social cost of carbon, for households would be equivalent to a 0.3% increase in household consumption in…

The European Commission (EC) yesterday announced its first “Omnibus” package of proposals aimed at simplifying EU rules, boosting competitiveness, and unlocking additional investment capacity. The package consists of two main proposals: (i) “Omnibus I”, which focuses on reducing reporting and compliance burdens and costs of the Corporate Sustainability Reporting Directive (CSRD) and the EU taxonomy for sustainable activities (EU Taxonomy), postponing the entry into application of the Corporate Sustainability Due Diligence Directive (CSDDD), and simplifying the carbon border adjustment mechanism (CBAM); and (ii) “Omnibus II”, which would amend the regulations for the InvestEU Program to increase its size, efficiency, and accessibility. If adopted, these measures are expected to generate annual administrative cost savings of approximately €6.3 billion and mobilize an additional €50 billion in public and private investment through InvestEU. This bulletin summarizes key amendments included in Omnibus I and Omnibus II: CSRD and EU Taxonomy. The proposed changes in sustainability reporting under the CSRD and EU Taxonomy include: Narrower CSRD scope. Removing around 80% of companies from CSRD requirements, focusing obligations on the largest companies with the greatest environmental and social impact. The reporting requirements would only apply to large undertakings with more than 1,000 employees on average (i.e., undertakings that have more than 1,000 employees and either a turnover above €50 million or a balance sheet above €25 million) Protection for smaller companies. Ensuring large companies’ reporting requirements do not create excessive burdens for smaller businesses in their value chains. Delayed compliance. Postponing CSRD reporting requirements by two years (until 2028) for companies originally scheduled to report in 2026 or 2027. Limit on EU Taxonomy reporting. Reducing the reporting burden and limiting mandatory EU Taxonomy reporting to the largest companies (aligning with the CSDDD), while allowing voluntary reporting for others. Proportionate standard for voluntary reporting. Issuing a recommendation on voluntary sustainability reporting as soon as possible, based on European Financial Reporting Advisory Group’s (EFRAG) sustainability reporting standard for…

Carney Government Eliminates Consumer Carbon Price

European Commission Proposes Major Simplification of Sustainability Reporting and Disclosure Rules and Expansion of EU Investments