Clean Fuel Regulations
What Are the Clean Fuel Regulations?
Canada’s Clean Fuel Regulations (CFR) are a set of rules and requirements implemented by the Federal government to reduce greenhouse gas (GHG) emissions from the transportation sector. These regulations aim to encourage the use of cleaner fuels and technologies to mitigate climate change and help lower our collective environmental impact.
The CFR is a performance-based regulation that sets progressively more stringent annual reduction requirements, or targets, for the carbon intensity of transportation fuels used in the Canadian market. Carbon intensity (CI) refers to the amount of carbon emissions produced throughout the lifecycle of a fuel, including its extraction, production, distribution and use.
Complying with the Clean Fuel Regulations
As of July 1, 2023, the CFR mandates a reduction in the carbon intensity of transportation fuels; suppliers and importers can comply with these regulations in several different ways:
1
Emissions Reduction Strategies
Conventional fuel production facilities, including refineries, can implement various strategies to reduce the carbon intensity of their process. These include adopting more energy-efficient technologies and investing in activities to reduce carbon emissions at the facilities, such as carbon capture utilization and storage (CCUS).
2
Supplying more low-carbon fuels like biofuels and other renewable fuels
Companies can also supply renewable fuels and biofuels including ethanol, biodiesel, renewable diesel, sustainable aviation fuel (SAF) and other advanced biofuels derived from renewable feedstocks such as agricultural residues, algae, or waste materials.
3
Fuel switching to advanced vehicle technology
It is also possible to earn credits through end-use fuel switching, for example moving from a gasoline vehicle to an electric vehicle through the installation of electric charging stations. Other examples include moving to renewable natural gas (RNG), renewable propane or hydrogen refueling.
4
Emissions Reductions Fund
Up to 10% of the annual reduction requirement can also be met by contributing to an emissions reduction funding program.
5
The Credit Trading System
The CFR introduces a credit trading system to provide flexibility for fuel producers and suppliers. Meaning a company can generate credits that can be traded to other companies who may not have achieved their targets to help them meet the requirements of the regulations.
Collaboration and Innovation are Key for Cleaner Fuels
While the release of the CFR was an important milestone in Canada’s decarbonization journey the Canadian Fuels Association (CFA) and its members have not waited until now to demonstrate how we can support the transition to a low-carbon economy.
Our current fuels network – consisting of hydrogen and biofuel production, refineries, fuel terminals and retail locations – is a strategic asset for Canada that can be leveraged and adapted to support our climate change goals, meaning we are not starting from scratch when it comes to building a low-carbon transportation system.
Learn more about how Canadian Fuels members are helping reduce emissions from transportation and reach our collective climate goals.
