National clean fuels strategy will affect all forms of fuels in Canada

Canada's national clean fuels strategy will apply to every kind of fuel — be it liquid, solid or gas, Environment Minister Catherine McKenna said Wednesday.

McKenna released the broad brushstrokes of the standard, which aims to eliminate at least 30 million tonnes of greenhouse gas emissions annually by 2030.

It is the single biggest-ticket item in Canada's national climate change framework, and gets about one-sixth of the way to meeting the current international commitment to reduce emissions to 30 per cent below 2005 levels by 2030.

The standard was first promised in the climate framework a year ago, and was followed by a discussion paper last February. This regulatory framework document will be followed up in the next year with draft regulations to set the actual standards. Final regulations are to come by the middle of 2019.

Jeremy Moorhouse, a senior analyst with Clean Energy Canada, said he was glad to see the government is going to apply the standard to all types of fuel, not just those for transportation.

That would include automobile fuels, diesels, jet fuel, natural gas for heating or electricity, and coal used for other purposes, such as producing steel. Coal used in electricity plants is exempt, only because it will be addressed by regulations phasing out coal as a source of electricity.

Moorhouse said his main disappointment was that the framework doesn't say when the standard will start to be implemented.

The standard will apply to the full life-cycle of a product, which means there have to be efficiencies found right from production until end use.

That could address the concern that creating additional biofuels, such as ethanol, wouldn't end up reducing emissions, since the carbon generated by cultivating the corn used to make the ethanol would negate any gain realized from blending the biofuel with gasoline.

The standard would not dictate the kind of technology that has to be used on any fuel type to make it cleaner, leaving it open to innovation and flexibility.

Moorhouse said there is a lot in the document released Wednesday that will help industry and the government develop the required regulations.

He said he thinks the technology is already commercially available to allow Canada to hit the targeted 30 million tonnes of reductions.

Earlier this year Clean Energy Canada estimated the standard could add $5.6-billion in annual economic activity, including 31,000 new jobs, by 2030, largely from building and operating renewable fuels plants.

The same report estimated the standard could increase the price of a litre of gasoline about five cents a litre, on top of the 11.6 cents a litre the $50 per tonne carbon tax is expected to add.