Clear Vitality Canada is a clear power assume tank on the Morris J. Wosk Centre for Dialogue at Simon Fraser College. By way of media briefs, we purpose to offer helpful factual and contextual info associated to Canada’s clear power transition. Please use this as a useful resource, and tell us if there are any matters that you simply want to see for future media briefs.
The federal authorities’s Clear Gas Laws, finalized in June 2022, took impact this month. The next media transient explores the aim of the rules and the affect they may have on customers and the Canadian fuels trade.
What are the Clear Gas Laws?
- The Clear Gas Laws set more and more stringent necessities on gasoline producers and importers to cut back the carbon depth of transportation fuels akin to gasoline and diesel with the eventual aim of reducing the carbon depth by roughly 15% (under 2016 ranges) by 2030.
- The brand new regulation, which got here into impact this month (July 2023), is at present at only a quarter of its full stringency in 2030. This implies the carbon depth of fuels have to be decreased by lower than 4% this 12 months (in comparison with 2016 ranges), rising to fifteen% by 2030.
- B.C., California, Oregon, and Washington state have related rules in place.
- The federal authorities has additionally launched a complementary program, the $1.5 billion Clear Fuels Fund, to assist clear gasoline manufacturing in Canada, together with superior biofuels and hydrogen tasks.
Why is the coverage wanted?
- The transportation and oil and fuel sectors every accounted for 150 and 189 megatonnes of emissions respectively in 2021—simply over half of Canada’s whole. The federal authorities’s 2030 Emissions Discount Plan, which might see Canada meet its worldwide local weather commitments, means that transportation emissions would wish to be decreased to 143 megatonnes and oil and fuel emissions to 110 megatonnes by 2030.
- In keeping with Setting and Local weather Change Canada, the Clear Fuels Laws will assist lower as much as 26.6 megatonnes of greenhouse fuel air pollution in 2030, one of many largest reductions from Canada’s portfolio of local weather insurance policies.
- Business affiliation Superior Biofuels Canada estimates the annual financial contribution from home clear gasoline manufacturing might be $14.1 billion in 2030, nearly triple the sector’s $5.3 billion in 2020.
What does it imply for fuel costs?
- In seven years, when the regulation is in full power, the federal authorities estimates the measure so as to add between 6 to 13 cents per litre of gasoline. Worth impacts within the earlier years of the coverage are anticipated to be minimal.
- Equally, Superior Biofuels Canada estimates, primarily based on actual world knowledge, that the Clear Gas Laws would add round 9 cents per litre to the price of gasoline and diesel in Canada by 2030.
- A current Parliamentary Price range Officer’s report estimated that the regulation may add as much as 16 to 17 cents per litre respectively to the value of gasoline and diesel bought in Canada in 2030. Nonetheless, the PBO acknowledges that its “estimates must be considered higher sure estimates.” The PBO additionally signifies it doesn’t account for the know-how change the coverage is designed to incentivize, which may decrease the regulation’s financial affect. Superior Biofuels Canada says the PBO’s estimate overstates compliance prices by 80% to 95% and that the methodology is just not supported by actual world proof from jurisdictions the place related insurance policies have already been applied.
The shift to EVs
- The Clear Gas Laws are accompanied by different federal insurance policies to make electrical automobiles extra reasonably priced and out there. These embrace:
- A current Clear Vitality Canada evaluation in contrast the whole possession prices of plenty of widespread electrical automotive fashions with gas-powered equivalents. With only one exception, the electrical model of each automotive analyzed was cheaper, often considerably so. The evaluation discovered that the electrical Hyundai Kona, Canada’s second best-selling EV in 2021, is $17,800 cheaper to personal than the gas-powered Kona when fuel costs are $2 per litre.