Canada & Low Carbon Fuels

For the last few weeks, we’ve been pretty deep in the weeds on low carbon fuels and the opportunities and bottlenecks for Canada. This has taken place in two arenas: Vancouver, with a focus on the maritime sector, and Ontario, with a broader market perspective.

From a policy incentive standpoint, domestically we’ve been digging into:

• The BC Low Carbon Fuel Standard,

• Ontario’s Cleaner Transportation Fuel regulations,

• Federal Clean Fuel Regulations (including its soon-to-be announced proposed ‘targeted amendments’), 

• The National Electricity Strategy, and

• The industrial carbon pricing systems.

These all have implications on the conceivable credit stack for available fuels. Keeping close tabs on further developments on the Canada-AB MOU and Implementation Agreement can have material outcomes on the what, where, when, and how of low carbon fuel facilities we build in Canada.

The international backdrop this takes place against is:

• CUSMA negotiations (as US biofuels have historically had significant market penetration into Canada),

• The EU’s FuelEU regulations,

• Neighbouring low carbon fuel markets like Washington’s Clean Fuel Standard, and

• Broader developments for carbon markets:

  • The EU Carbon Border Adjustment Mechanism

  • Persistent and growing trade missions of federal and provincial delegations to Asia that explicitly include clean energy and the intersection with growing trade and investment, as well as

  • Last week’s announcement of linkage between California, Quebec, and Washington’s cap-and-invest systems under the Western Climate Initiative umbrella.

We’re hoping we’re not the only ones tracking these dots and how they all connect…but so far, it seems to at least be reasonably rare.