Clear Vitality Canada is a clear vitality assume tank on the Morris J. Wosk Centre for Dialogue at Simon Fraser College. Via media briefs, we goal to supply helpful factual and contextual info associated to Canada’s clear vitality transition. Please use this as a useful resource, and tell us if there are any subjects that you just wish to see for future media briefs.
The federal authorities’s Clear Gas Rules, finalized in June 2022, took impact this month. The next media transient explores the aim of the laws and the influence they may have on shoppers and the Canadian fuels business.
What are the Clear Gas Rules?
- The Clear Gas Rules set more and more stringent necessities on gasoline producers and importers to scale back the carbon depth of transportation fuels comparable to gasoline and diesel with the eventual aim of reducing the carbon depth by roughly 15% (beneath 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 diminished by lower than 4% this yr (in comparison with 2016 ranges), rising to fifteen% by 2030.
- B.C., California, Oregon, and Washington state have related laws 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 initiatives.
Why is the coverage wanted?
- The transportation and oil and gasoline 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 diminished to 143 megatonnes and oil and gasoline emissions to 110 megatonnes by 2030.
- In accordance with Atmosphere and Local weather Change Canada, the Clear Fuels Rules will assist minimize as much as 26.6 megatonnes of greenhouse gasoline air pollution in 2030, one of many largest reductions from Canada’s portfolio of local weather insurance policies.
- Trade 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 gasoline costs?
- In seven years, when the regulation is in full pressure, 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 information, that the Clear Gas Rules would add round 9 cents per litre to the price of gasoline and diesel in Canada by 2030.
- A current Parliamentary Finances Officer’s report estimated that the regulation might add as much as 16 to 17 cents per litre respectively to the value of gasoline and diesel bought in Canada in 2030. Nevertheless, the PBO acknowledges that its “estimates needs to be thought to be higher sure estimates.” The PBO additionally signifies it doesn’t account for the know-how change the coverage is designed to incentivize, which might decrease the regulation’s financial influence. 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 carried out.
The shift to EVs
- The Clear Gas Rules are accompanied by different federal insurance policies to make electrical automobiles extra inexpensive and accessible. These embrace:
- A current Clear Vitality Canada evaluation in contrast the whole possession prices of quite a lot of fashionable electrical automobile fashions with gas-powered equivalents. With only one exception, the electrical model of each automobile 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 gasoline costs are $2 per litre.
