Clean Fuel Standard – Supplementary Details

Achieving the goal of lower average fuel carbon intensity will involve significant changes to the composition of Canada’s fuel market, notably through increased blending of biofuels (such as ethanol, biodiesel, and renewable diesel) and through greater use of next-generation or advanced biofuels, biogas, electricity, hydrogen, and other emerging low-carbon fuel technologies. In turn, increasing the penetration of low-carbon fuel requires progress along a number of fronts, including (i) increasing low-carbon fuel production capacity; (ii) investing in delivery systems to transport low-carbon fuels to markets and fuel terminals; (iii) increasing the availability of the fuels at retail stations; (iv) increasing the market share of alternative fuel vehicles; and (v) increasing consumer demand for alternative fuels. Achieving progress in all these ways will require investment in advanced fuel technologies from governments, firms, and consumers.  In fact, recent modelling has shown that, by 2030, a fully implemented CFS would increase annual economic activity in clean fuels by $4.9 billion to $5.6 billion (2015 CAD) and increase employment through the net addition of between 11,000 and 16,000 direct and indirect jobs. A clean fuels budget strategy would help ensure this positive economic outcome. The strategy could include measures such as a fund to support the commercial deployment of clean fuels, reforms to excise taxation (to align with carbon pricing), and new support for research and development and infrastructure (e.g. blender pumps, electric vehicle chargers).   The GBC recommends that the federal government review current federal funding for low-carbon fuel producers and other clean transportation initiatives, including funding allocated during previous federal budget cycles, and re-profile aligned portions of this spending so as to explicitly support CFS objectives, including increased clean fuel supply.

Funding for CFS administration and Canadian ILUC values

Recent peer-reviewed research into barriers faced by the Canadian advanced biofuels sector suggests that the Canadian government needs to “augment its personnel, expertise and budgetary resources for advanced biofuels policymaking, and strengthen its interdepartmental and intergovernmental coordination mechanisms.”1 

1. Mondou, Matthieu, Grace Skogstad, and Julia Bognar. “What Are the Prospects for Deploying Advanced Biofuels in Canada?” Biomass and Bioenergy 116 (September 1, 2018): 171–79