Atlantic PMs call on federal government to delay clean fuel regulations

Atlantic Canadian prime ministers who requested a delay in the adoption of nationwide regulations aimed at curbing greenhouse gas emissions received a swift response from the federal government on Thursday.

The four premiers, from New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador, issued a statement saying federal clean fuel regulations, which take effect July 1 along with the carbon tax, impose a burden unfair to the region. They said the regulations should not be implemented “until a plan can be developed to address the disproportionate impact of the regulations on Atlantic Canadians.”

Hours later, Environment and Climate Change Minister Steven Guilbeault said clean fuel regulations are central to Canada’s emissions reduction plan. They require companies to gradually reduce the carbon content of their fuels, leading to a decrease of about 15 percent below 2016 levels in carbon intensity (how much carbon is released during production and consumption). of gasoline and diesel by 2030. The feds say approach is similar to low carbon British Columbia fuel plan and “will increase support for domestic production and adoption of low-carbon fuels, such as hydrogen and biofuels.”

Liquid fossil fuel producers selling to the Canadian market will have to reduce the carbon intensity of their fuel by blending ethanol, also known as biofuel, with regular gas, for example. In BC, gasoline must be five percent ethanol, while diesel must be four percent.

The other part of the plan is a credit market, where fuel producers and importers have to create or buy credits to meet carbon reduction targets. If a company exceeds the target, it has credits that it can sell or bank for future years. Carbon credits are supposed to contribute to the growth of the renewable fuels sector, such as the manufacturing of electric vehicles.

According to Guilbeault, the regulations translate into an overall eight percent reduction in the country’s total greenhouse gas emissions. This is necessary to help meet Canada’s goal of reducing emissions by 40 to 45 percent from 2005 levels by 2030.

The prime ministers insist that Atlantic Canadians will struggle with rising gasoline and diesel prices at the pump, along with “inflationary pressures that will increase the costs of other goods imported into the region.” But Guilbeault said that’s not the case.

“Under clean fuel regulations, oil companies and refineries have the time and ability to invest to upgrade their operations to meet the very small incremental costs that clean fuel regulations require. There’s just no reason they need to increase costs to consumers on July 1.”

Guilbeault noted that refiners in Atlantic Canada are reaping “huge profits and have the ability to be part of the solution.” Between 2019 and 2022, refinery margins in Atlantic Canada went from just over 10 cents a liter to almost 50 cents a liter, she said.

The four premiers, from New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, issued a statement saying clean fuel regulations place an unfair burden on the region.

He expressed the same sentiment in a letter to the president of the Nova Scotia Public Service and Review Board. According CBCGuilbeault said regulators capable of raising fuel prices should first look at the profit margins of oil companies, specifically Irving Oil.

The prime ministers’ call follows a heated debate in the region over the federal carbon tax, which will also be implemented on July 1. In November 2022, it was announced that the federal government will impose fuel charges on gasoline, diesel, and home heating in Nova Scotia. , Newfoundland and Labrador, and Prince Edward Island, provinces that failed to come up with their own plans that meet climate standards.

Similar concerns about affordability were raised when that measure was taken, even though rebate checks will be mailed to families before the tax is imposed to offset price increases. Eight out of 10 households will receive more money from refund checks than they pay, Guilbeault said at the time.

Last week, the Parliamentary Budget Officer published an analysis of the clean fuel regulations, which concluded that the rules could add up to 17 pence per liter to fuel by 2030 and cost Canadian households between $231 and $1,008 a year, depending on income. The report was criticized by the Liberals, the NDP and the Greens for ignoring the cost of climate change impacts. Jason Dion, senior director of research at the Canadian Climate Institute, tweeted that the PBO “compares costs against a scenario that doesn’t exist: where Canada does nothing about climate change and faces no trade or competitiveness consequences for doing so.”

‘Transition is coming’

While environmental and political groups have criticized the clean fuel regulations for not going far enough, Evan Wiseman, senior climate policy manager at the Atmospheric Fund, said the policy should still be fully operational by July.

While July is the official start of the regulations, Wiseman notes that the past year has been a “compliance period” to prepare for credit trading.

“To start a market, you must have credits for the market. So you have to have a compliance period, which is about to end… The July 1st date is not the start date. It has started,” he said.

Development of the regulations began in 2016 and have since been watered down, Wiseman explained, noting that many climate-focused groups “are not very happy with the ambition of this programme.” Notably, the regulations initially included natural gas and home heating oil, which were eventually excluded, making transportation fuels the focus of the final regulations.

Meanwhile, the regulations also encourage growth in the biodiesel sector and other low-carbon fuels. Guilbeault said a refinery at Come By Chance, NL, for example, will be compliant with regulations. The refinery has grown from an aging oil operation to one that will produce diesel and jet fuel from waste oils of vegetable origin and animal fats.

Early analysis of the regulations from clean energy think tank Pembina Institute, which have since changed, found that the regulations will create up to “30,000 jobs as new clean fuel facilities are built, supplied and operated.” While Wiseman said that number isn’t as high after the changes, further innovation in the clean fuels sector will create new jobs and present an opportunity for Canada to boost local fuel industries, rather than rely on imports.

“It is important to know that the transition is coming… It is meant to target a sector that is very difficult to decarbonise, but the sector is decarbonising and we need to build infrastructure to accommodate this massive change that is happening globally,” he said. Wise man.

Cloe Logan / Local Journalism Initiative / National Observer of Canada

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