In comments submitted today to Environment and Climate Change Canada (ECCC), the Renewable Fuels Association expressed strong support for Canada’s Clean Fuel Regulations (CFR) and shared its view on potential amendments to the program.
The comments respond to a December ECCC discussion paper that laid out potential targeted amendments meant to “strengthen the resiliency and support the development of Canada’s low-carbon fuel sector, while maintaining the Regulations’ primary focus on lowering GHG emissions and transitioning to a low-carbon economy.”
Specifically, RFA voiced its support for the potential addition of a CFR compliance credit “multiplier” for low-carbon fuels made in Canada as a means of harmonizing biofuel production incentives on both sides of the border.
“The credit multiplier – which acts as an incentive – is a market-based, flexible approach that prioritizes logistical and economic efficiency and protects consumers from the potential for higher fuel prices,” wrote RFA General Counsel and Vice President of Government Affairs Edward S. Hubbard, Jr. “This is the measure that we would recommend, as it achieves ECCC’s objective of protecting and incentivizing domestic biofuel production without undermining the efficient operation and fungibility of the highly integrated North American liquid fuels market.”
Since the inception of Canada’s Clean Fuel Regulations, U.S. grain-based ethanol imports have contributed greatly to the success and effectiveness of the program, Hubbard noted; in 2024, the share of ethanol imports used to comply with the CFR rose to 61 percent.
Another proposed option would establish a minimum domestic content requirement in Canada, which RFA said would create logistical problems and undermine the economic efficiency of the current CFR program. RFA also expressed opposition to another concept under discussion, which would discount the CFR credit generation associated with imported fuels in the Canadian market. This approach would discourage the free flow of clean fuels in the Canadian market and would be viewed by the marketplace as a negative signal and strong disincentive.
