David Schick
Vice President, Canadian Fuels Association

August 2020

The Clean Fuel Standard is Ambitious – Here’s How We Can Make It Work

When the federal government introduced the idea of a national Clean Fuel Standard (CFS) in 2016, the Canadian Fuels Association and its members were quick to support the concept and understood the importance of a national climate change strategy.  Since then, we have focused on working with the government and other stakeholders on ‘getting it right.’

Those Canadian companies and facilities that are responsible for producing, distributing and marketing transportation fuels across the country are defined as the ‘obligated parties’ under the liquids component of the CFS.  This standard is the largest emissions-reducing initiative in Canada’s climate plan, with a goal eliminating 30 million tonnes of annual greenhouse gas emissions by 2030.

While this is an ambitious goal, Canadian Fuels Association members (the ‘obligated parties’) are up to the task and are focused on solutions that will contribute to the success of the CFS.  For the past 125 years, transportation fuels sector has been the lifeblood of the Canadian economy and we have a proud history of applying technology and innovation to improve our products and operations. 

We have been active participants throughout the CFS development process and believe that leveraging and adapting our existing national fuels infrastructure will need to play a significant role in meeting the targets outlined in the standard.  In order for the emission reductions identified in the CFS to be achieved, all compliance alternatives will need to be explored.   There is no ‘one-size-fits-all’ solution that will result in successful implementation of the CFS, so policy flexibility and technology-neutrality  are essential elements of the CFS for governments, industry and Canadians. 

For obligated parties, compliance with the CFS will require billions of dollars of investment to adapt our existing infrastructure and reconfigure or build new systems and processes in order to significantly reduce emissions.  While costly, leveraging the existing infrastructure is a less costly alternative to starting from scratch with entirely new systems, at the scale necessary to achieve CFS goals and lay the foundation for deeper, longer-term and sustainable emissions reductions.  Significant investments that address complex issues like CFS compliance take time to plan and implement.  While our economy recovers from the impacts of COVID-19, the capital required to support CFS will be in short supply and hamper the ability to comply with overly tight timelines. 

For example, the amount of ethanol in gasoline is important to the success of the Clean Fuel Standard.  To meet proposed average ethanol levels of 15 %, significant investments will be needed across the supply chain, at refineries, terminals and service stations.  Further, many vehicles and other engines aren’t designed to work with the high ethanol levels anticipated in the plan.  This ethanol aspect of CFS is just one example of Fuels Association members’ many challenges to figure out the “how’ of CFS.  Similar practical challenges exist for every proposed CFS compliance pathway.  All are complicated by multiple external factors, most of which are outside fuel suppliers’ control.   Yet, our customers deserve and expect continued reliable access to supply of transportation fuel that meets their varied needs, at reasonable cost.  

We also know that any changes to liquid fuels will result in impacts across many different sectors and stakeholder groups.  Ensuring the continued mobility of people and goods across a country as large as Canada, requires careful consideration of regional differences in climate, availability of products, existing fleets and appropriate modes of transportation for both urban and rural settings.  As a national policy, CFS must ensure that it considers the needs of consumers across Canada, both during transition to lower-emission products and over the long-term.

While we continue to support the concept of the Canadian Fuels Standard and its ultimate objectives, there are some practical considerations that need to be made in order for this policy to succeed now and into the future.  The success of the CFS will be measured by not only its ability to reduce emissions, but also by its contribution to a strong, resilient economy.  This is the key challenge for government in ‘getting it right’.  The Canadian Fuels Association and its members remain committed to doing their part and continuing to fuel a prosperous Canada and a low carbon future.

Canadian Fuels Association