Low Carbon Fuel Standards for Canadian Transportation Sector?

Between 2010 and 2014, provincial governments from Ontario westward, as well as the federal government, implemented renewable fuel standard (RFS) regulations.  Targeting both gasoline and diesel, the stated goal for these standards has been the presumed greenhouse gas emission reductions that come with ethanol and renewable distillate content, with rural economic opportunity to supply the mandated renewable content often mentioned as an ancillary benefit.

This importance to the local agricultural economies of RFS can be seen in their provincial implementation.  The highest ethanol content standards in Canada come from the prairie provinces of Manitoba and Saskatchewan while from Quebec eastward, as well as the territories, no such standards exist.

Disconnect Between RFS And GHG Emissions Reductions 

While the design and regulatory justification for RFS regulations usually cited the pressing need for GHG emissions reductions in the transportation sector, most RFS regulations don’t actually specify any GHG reduction requirements in determining which renewable fuels may be eligible under those standards.   (There are two notable exceptions:   Alberta’s RFS requires renewable fuels to have a 25% lower GHG emissions rate than baseline fossil fuels and Ontario’s Greener Diesel regulations, which is similar).

LCFS Flexibility in GHG Reductions 

In contrast to the RFS regulations, British Columbia has adopted a low carbon fuels standard (LCFS), consistent with that existing in California.  Under the LCFS, transportation GHG emissions may be reduced using a number of options, from natural gas, hydrogen and electricity, to ethanol and renewable distillate.   (The regime, in fact, includes other market mechanisms to also bring down GHG emissions reduction costs).

Nationwide Transportation GHG Reductions Through LCFS 

If the goal of RFS is truly GHG emission reductions, and the recent announcement of a national carbon price surely reaffirms its sincerity, in spite of some sabre-rattling to the contrary, then BC’s LCFS and not conventional RFS, would seem to be the path towards cross-country implementation.

Jonathan D. Cocker heads the Firm’s Environmental Practice Group in Canada and is an active member of firm Global Consumer Goods & Retail and Energy, Mining and Infrastructure groups. Mr. Cocker provides advice and representation to multinational companies on a variety of environment, health and safety matters, including product content, dangerous goods transportation, GHS, regulated wastes, consumer product and food safety, extended producer responsibilities and contaminated lands matters. He appears before both EHS tribunals and civil courts across Canada. Mr. Cocker is a frequent speaker and writer on EHS matters, an active participant on EHS issues in a number of national and international industry associations and the recent author of the first edition of The Environment and Climate Change Law Review (Canada chapter) and the upcoming Encyclopedia of Environmental Law (Chemicals chapter).