Environment and Climate Change Canada (ECCC) published a discussion paper to invite views and information related to targeted amendments to the Clean Fuel Regulations (CFR) on December 3, 2025. The proposed amendments are largely intended to complement Canada’s Biofuels Production Incentive (announced in September), which is expected to provide more than $372 million over two years to support the stability and resiliency of domestic producers of biodiesel and renewable diesel. This bulletin provides a brief summary of the discussion paper. Background. The CFR require producers and importers of gasoline and diesel (i.e., primary suppliers) to reduce the life cycle carbon intensity of gasoline and diesel produced and imported for use in Canada, with the intent of reducing GHG emissions. A life cycle approach considers the GHG emissions involved in multiple stages of the fuel’s production process, from feedstock extraction or cultivation to fuel combustion. CFR credits can be created by: compliance category 1 – undertaking projects that reduce the life cycle carbon intensity of liquid fossil fuels (e.g., carbon capture and storage, renewable electricity, co-processing) compliance category 2 – supplying low-carbon intensity fuels (e.g., ethanol, biodiesel) compliance category 3 – supplying fuel or energy to advanced vehicle technology (e.g., electricity or hydrogen in vehicles) The discussion paper notes that the majority of credits created to-date under the CFR come from the supply of low-carbon intensity fuels. While an important share of these credits comes from fuel produced in Canada, Canada does not currently produce enough low-carbon intensity fuels to meet the total domestic demand. As such, a large share of CFR credits for low-carbon intensity fuel supply reportedly come from imports, mostly from the United States (see Annex 1). Policy goal. The stated goal of the CFR amendments is to strengthen the resiliency and support the development of Canada’s low-carbon fuel sector, while maintaining the Regulations’ primary focus on…
