Canadian Government Releases Draft Clean Fuel Regulations

The development of a Canada-wide clean fuel standard took a major step forward on December 19, 2020, with the federal government's release of draft Clean Fuel Regulations which, once finalized, will come into force in December 2022.

The Clean Fuel Regulations will apply to producers or importers of gasoline, diesel, kerosene and light and heavy fuel oils (referred to as "primary suppliers"). Each fuel type is assigned a lifecycle carbon intensity value, expressed in grams of carbon dioxide equivalent per megajoule of energy (gCO2e/MJ), which is meant to represent the emission intensity of such fuel throughout its entire lifecycle. The carbon intensity values serve as a baseline, against which primary suppliers will be required to make annual reductions. Beginning in 2022, each primary supplier must reduce the carbon intensity of the fuels it produces or imports by a minimum amount that increases each year, starting at 2.4 gCO2e/MJ in 2022 and culminating in a 12