Land-use restrictions reduced significantly in pending Clean Fuel Standard, say sources

The proposed rules for the federal government’s new Clean Fuel Standard (CFS) are set to be published this week, and will include changes aimed at addressing some of the concerns farmers and farm groups raised regarding an earlier proposal, according to a government document and government sources familiar with the file.

Several farm and commodity groups, including the Canola Council of Canada and Grain Farmers of Ontario, have voiced optimism about potential new demand for crops as feedstock for fuels with lower carbon intensity under the CFS, but they’ve also voiced major concerns about land-use rules previously proposed by Environment and Climate Change Canada.

A draft version of the CFS presented to farm groups this past summer included land-use and biodiversity requirements that would disqualify biofuel feedstocks grown on farmland that’s been converted out of wetland, grassland, or forest since a certain date — possibly the year 2008, and require riparian areas for specific distances along waterways.

Farm groups raised concern that the requirements would dramatically limit the number of eligible acres, as well as the opportunity for Canadian farmers to supply biofuel and renewable fuel producers with necessary feedstocks to meet the CFS targets.

Full details will only be known when the CFS regulations are published in Canada Gazette, which is slated to occur on December 18, but at least two significant changes to the land-use and biodiversity requirements can be expected, according to two government officials who spoke with RealAgriculture — one with Environment and Climate Change Canada and another with Agriculture and Agri-Food Canada. (Update: The changes are also described in a CFS annex document that has since been published by ECCC.)

Rather than ensuring compliance with the environmental requirements on an individual farm or forest lot basis, the federal government is planning to assess compliance for each feedstock on an aggregate national or provincial basis, removing the need for individual on-farm verification.

The baseline or reference year for changes to land use will also be changed versus the draft proposal in summer. Instead of looking at land use retroactive to 2008, making land converted into crop production since then ineligible, the baseline will be set in 2020, according to the sources and the Clean Fuel Standard annex document.

“If a country shows that there has been no net land use expansion, there will be no need for individual farmers or foresters to undertake any further action,” states the annex. Palm oil has already been identified as a high-risk feedstock, and deemed ineligible to create credits under the CFS.

Ultimately, what these changes mean for potential crop feedstock demand still hinges on the details that have not yet been announced, including the full land-use criteria and more details on other ways fuel suppliers can generate credits under the CFS.

In addition to the land-use changes, the annex refers to updates that could make it easier for fuel suppliers to meet their CFS obligations earlier in the oil and gas supply chain, by implementing carbon capture technology, for example.

While farm groups have yet to publicly weigh in on the changes, Agriculture Minister Marie-Claude Bibeau tweeted “Farmer concerns on land use criteria resolved” following the announcement of the plan on Friday.

After the proposed regulations are published, there will be the regular 75-day comment period. The government plans to publish the final CFS regulations in late 2021.

The CFS is being implemented as part of the federal government’s larger climate plan announced on Friday, which also includes increases to the federal carbon tax to $170/tonne by 2030.

Editor’s note: This story was updated on Dec. 14 to reference the Clean Fuel Standards Annex document posted on the federal government’s website.

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