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Canada’s Minister of Environment and Climate Change has announced the publication of the final Clean Fuel Regulations (CFR) to replace the federal Renewable Fuels Regulation (RFR). The final CFR was approved by Cabinet on June 20, which will now also be the date that early crediting commences. The official version of the CFR will be published in Canada Gazette Part II on July 6. The federal government intends for the CFR to reduce Canada’s greenhouse gas (GHG) emissions by up to 26.6 million tCO2e by 2030. An unofficial version of the Regulatory Impact Analysis Statement has also been released. This bulletin briefly highlights key details and recent changes to the CFR, which repeal and replace the RFR while retaining the minimum volumetric requirements of at least 5% low CI fuel content in gasoline and 2% low CI fuel content in diesel fuel and light fuel oil. Compliance requirements. The CFR will require gasoline and diesel primary suppliers (producers and importers) to reduce the carbon intensity (CI) of the gasoline and diesel they produce in, and import into, Canada from 2016 CI levels by 3.5 gCO2e/MJ in 2023, increasing at a rate of 1.5 gCO2e/MJ to 14 gCO2e/MJ in 2030 (up from 12 gCO2e/MJ in prior iterations). The annual CI reduction requirements that primary suppliers must meet for the gasoline and diesel fuels they supply to Canada is the difference between a baseline CI value and a CI limit for gasoline and diesel. Compliance requirements under the CFR will come into effect on July 1, 2023, with the first compliance review in December 2023.  Credit market. The CFR will also establish a credit market providing for three main categories of credit-creating action: Actions that reduce the CI of the fossil fuel throughout its lifecycle through GHG reduction projects (e.g., carbon capture and storage); Supplying low-carbon…

Environment and Climate Change Canada (ECCC) today announced the launch of Canada’s Greenhouse Gas Offset Credit System, with the publication of the final regulations in Canada Gazette II. As part of the announcement, ECCC also announced that municipalities and other landfill operators will now be able to generate offset credits under the finalized Landfill Methane Recovery and Destruction protocol (see our earlier bulletins here and here) for recovering landfill gas from their operations and either destroying it or repurposing it into energy with technologies such as flares, boilers, turbines, and engines. ECCC is currently developing the following federal offset protocols: Reducing GHG Emissions from Refrigeration Systems; Improved Forest Management; Enhanced Soil Organic Carbon; and Livestock Feed Management.  ECCC has also indicated that over the summer it will begin development of a Direct Air Carbon Capture and Sequestration protocol, after which it will start work on the following new protocols: Improved Forest Management on Public Lands; Bioenergy Carbon Capture and Sequestration; Livestock Manure Management; and Anerobic Digestion. ECCC also announced that it is looking for interested individuals to provide input as external technical experts and assist with the development of the Direct Air Carbon Capture and Sequestration protocol. Interested individuals are invited to visit the GHG Offset Credit System website for more information on how to submit their candidacy packages by July 31, 2022. For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

Environment and Climate Change Canada (ECCC) today released a discussion paper, “A Clean Electricity Standard in support of a net-zero electricity sector” (the Discussion Paper), as part of its first steps in developing and consulting on a Clean Electricity Standard (CES) under the Canadian Environmental Protection Act, 1999. This bulletin summarizes key details of the Discussion Paper and provides important information on ECCC’s consultation on developing a CES.   Purpose. The Discussion Paper indicates that its purpose is to support the government’s intention to introduce regulations to achieve a net-zero electricity system by 2035 and invite comments regarding the scope and design of the CES. The Discussion Paper notes that Canada’s electricity system is currently 82% non-emitting but remains Canada’s 4th largest source of emissions, accounting for 8.4% of total greenhouse gas (GHG) emissions in 2019.   Proposed CES Regulations. The Discussion Paper notes that carbon pricing will be insufficient to ensure that the electricity sector achieves net-zero emissions by 2035 or likely even by 2050. Therefore, a nation-wide CES regulation will complement carbon pricing by requiring the phase-out of all conventional fossil fuel electricity generation and incentivizing fuel switching in other sectors. The scope and design of the CES regulations will also need to provide enough compliance flexibility to allow for the use of natural gas for emergency events, back-up power to complement renewables, and supplying power during seasonal peaks of demand. The proposed CES regulations may, among other things: apply to all sources of emitting electricity generation that sell to the grid; transition the electricity sector to net-zero by 2035 while providing increased supply of electricity to support electrification and the role of available technologies in the provision of clean power to Canadians; be stringent enough to achieve its objectives while including compliance flexibility, such as robust GHG offsets, and allow for the…

Environment and Climate Change Canada (ECCC) yesterday published draft Federal GHG Offset Protocols for Landfill Methane Recovery and Destruction and Reducing Greenhouse Gases from Refrigeration Systems (the Draft Protocols) for a 30-day comment period (read our earlier bulletin announcing the development of draft protocols here). ECCC is in the process of developing protocols to advance the Federal GHG Offset System under Part 2 of the Greenhouse Gas Pollution Pricing Act and in accordance with proposed Greenhouse Gas Offset Credit System Regulations published last year.   Public Consultation ECCC is seeking public comment on the Draft Protocols to help inform the development of the final protocols. ECCC intends to publish the final versions mid-2022. Interested stakeholders have until February 18, 2022 to submit feedback on the Draft Protocols by emailing the Offsets and Emissions Trading Section of ECCC.    Future Protocols ECCC is also currently working on developing Federal GHG Offset Protocols for the following: Improved Forest Management Enhanced Soil Organic Carbon Livestock Feed Management We anticipate draft protocols on the above to be published later this year. For assistance with comments, further information, or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

Prime Minister Justin Trudeau yesterday announced a new Cabinet following the September 20, 2021 election. The priorities for the new Cabinet include creating jobs, growing the middle class, homeownership, accelerating the fight against climate change, $10-a-day childcare, and truth and reconciliation. We expect that the Prime Minister’s Office will issue new mandate letters for the ministers in the coming days.   The new Cabinet is gender-balanced and reflective of Canada’s diversity.  It is noteworthy that three of the most significant ministries (Finance, Foreign Affairs, and National Defence) are now held by women.  The climate agenda is also likely to be bolstered by a strong pairing of Minister Wilkinson, a former environmental innovator, at Natural Resources and Minister Guilbeault, a former environmental advocate, at Environment and Climate Change. The elevation of Edmonton Centre MP, Randy Boisonneault, to Cabinet as Associate Minister of Finance and Minister of Tourism is likely to add a more geographically-diverse perspective to Cabinet decisions in and around energy infrastructure.  Minister Hajdu’s move from her strong leadership at Health during the pandemic to Indigenous Services is also consistent with the government’s stated priority on Indigenous reconciliation.   The new confirmed Cabinet is as follows: Steven Guilbeault becomes Minister of Environment and Climate Change Jonathan Wilkinson becomes Minister of Natural Resources Chrystia Freeland remains Deputy Prime Minister and Minister of Finance Mélanie Joly becomes Minister of Foreign Affairs David Lametti remains Minister of Justice and Attorney General of Canada Marc Miller becomes Minister of Crown-Indigenous Relations Omar Alghabra remains Minister of Transport Anita Anand becomes Minister of National Defence Carolyn Bennett becomes Minister of Mental Health and Addictions and Associate Minister of Health Marie-Claude Bibeau remains Minister of Agriculture and Agri-Food Bill Blair becomes President of the Queen’s Privy Council for Canada and Minister of Emergency Preparedness Randy Boissonnault becomes Minister of Tourism and Associate Minister of Finance François-Philippe Champagne remains Minister of…