Clear Power Canada is a clear power suppose tank on the Morris J. Wosk Centre for Dialogue at Simon Fraser College. By way of media briefs, we intention to supply helpful factual and contextual data 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 wish to see for future media briefs.
The federal authorities’s Clear Gas Laws, finalized in June 2022, took impact this month. The next media temporary explores the aim of the rules and the influence they are going to have on customers and the Canadian fuels business.
What are the Clear Gas Laws?
- The Clear Gas Laws set more and more stringent necessities on gas producers and importers to cut back the carbon depth of transportation fuels resembling gasoline and diesel with the eventual purpose of lowering 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 the moment 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 yr (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 help clear gas 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 complete. 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 gasoline emissions to 110 megatonnes by 2030.
- In response to Atmosphere and Local weather Change Canada, the Clear Fuels Laws 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.
- Business affiliation Superior Biofuels Canada estimates the annual financial contribution from home clear gas manufacturing can be $14.1 billion in 2030, virtually 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 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 information, that the Clear Gas Laws would add round 9 cents per litre to the price of gasoline and diesel in Canada by 2030.
- A latest Parliamentary Funds 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. Nonetheless, the PBO acknowledges that its “estimates ought to be considered higher certain estimates.” The PBO additionally signifies it doesn’t account for the expertise 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 isn’t supported by actual world proof from jurisdictions the place related insurance policies have already been carried out.
The shift to EVs
- The Clear Gas Laws are accompanied by different federal insurance policies to make electrical autos extra inexpensive and accessible. These embody:
- A latest Clear Power Canada evaluation in contrast the entire possession prices of various common 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 gasoline costs are $2 per litre.
