Draft Canadian Renewable Fuels Requirements No Longer Align With U.S.

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By Peter Menyasz


OTTAWA--Environment Canada published May 18 draft amendments to its Renewable Fuels Regulations to provide a permanent exemption for home heating oil from the 2 percent minimum renewable content requirement for diesel fuel and heating distillate oil sold in Canada. The updated standards would not be fully aligned with those in the United States.

The amended Renewable Fuels Regulations would implement relief announced in December 2012 from the higher home heating costs the requirements could produce, particularly in Eastern Canada, the department said in a regulatory impact analysis published with the draft changes in the May 18Canada Gazette, Part I (36 INER 80, 1/16/13).

The amendments would also legally implement the commitment to extend by six months, to July 1, 2013, application of renewable content requirements in Nova Scotia, New Brunswick, and Prince Edward Island.

The draft amendments are open to public comment through July 17, after which final regulations will be published, with any changes deemed necessary, in the Canada Gazette, Part II.

Environment Canada noted that the regulations do not align with current standards in the United States. They were originally designed to generally align with the Environmental Protection Agency's Renewable Fuels Standard (RFS1), but EPA has since implemented updated standards (RFS2) that differentiate between renewable fuels based on life-cycle greenhouse gas emissions, it said.

“Environment Canada did not include mandates or differential treatment of renewable fuels based on GHG emissions. Though Canada's regulations are not strictly aligned with those of the United States, they do not discriminate between domestic and imported fuels,” it said.

The department acknowledged concerns raised by renewable fuel producers that the exemption for home heating oil could reduce demand for biofuels, but stressed that the remaining requirements would continue to create demand for renewable content in diesel fuel.

The changes are projected to yield about 100,000 metric tons of greenhouse gas emissions per year between 2013 and 2035 that would not have occurred without the exemption. But while the current regulations don't provide a value for the anticipated net emissions reduction, the original regulatory impact analysis statement, issued in 2007, projected life-cycle greenhouse gas reductions of 2.7 million metric tons per year. In addition, the regulations will still produce a total net benefit to the Canadian economy estimated at C$236 million ($229 million) over the 2013 to 2035 time frame, Environment Canada said.

The Renewable Fuels Regulations, which also require average 5 percent renewable content in all gasoline sold in Canada, are part of the Canadian government's efforts to meet its Copenhagen Accord commitment to reduce greenhouse gas emissions 17 percent below 2005 levels by 2020.


The draft regulatory amendments are available at http://bit.ly/17UhSle.

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