The federal government’s Clean Fuel Standard (CFS) could create a new market equal in size to that of Japan’s for Canadian canola, according to the Canola Council of Canada.
The draft regulations supporting the new fuel standard, which would require fuel companies reduce the lifecycle carbon intensity of their fuels, were published in Canada Gazette on December 18.
“We’ve been working on this for many, many months, and certainly what we saw come out Friday is very positive for producers and the industry to seize this opportunity without having added costs and regulations put on them,” says Brian Innes, the Canola Council’s vice-president of public affairs, in the interview below.
Compared with an earlier proposal discussed this past summer, the draft regulations remove the need for farm audits and feedstock certification, as long as net land use in Canada does not increase, explains Innes.
“A lot of those details that created a significant amount of discussion in the agriculture community we don’t see as applying to Canadian agriculture going forward because we’re going to be complying on an aggregate basis across the country,” he says.
The regulations would also align Canada with the U.S. renewable fuel standard.
“That’s a really positive thing because it keeps our biofuel market aligned in North America in the requirements that farmers need to meet in order to sell their feedstocks and grain into the ethanol and biofuel markets,” notes Innes. “As long as we keep complying with the requirements in the United States, we’ll keep complying with the requirements forthcoming under the Clean Fuel Standards.”
The CFS does not include a specific biofuel mandate, but Environment and Climate Change Canada’s modelling shows renewable content in diesel reaching approximately 11 per cent by 2030. Extrapolating based on canola’s current share of the renewable content in diesel, Innes says this would create annual demand for an additional 2.6 million tonnes of canola — in line with annual demand from Japan.
“It’s a real opportunity for the sector to feed into the country’s priority to reduce greenhouse gas emissions, and for agriculture to really benefit as a biofuel feedstock,” he says, noting it would also diversify demand — reducing reliance on unstable export markets — and likely result in more value-added processing.
One of the pivotal details that has yet to be determined is the carbon intensity value that environment officials will assign to biofuel made from canola.
“We certainly want to see the details on how you calculate the amount of carbon in canola biofuel,” says Innes. “That’s a really critical component to achieving those positive blend levels that would drive demand for what farmers produce.”
The council is also keeping a close eye on changes that were made in the proposed regulations that could potentially make it easier for companies in the oil and gas sector to meet their carbon intensity reduction requirements within their own operations, reducing the need for low-carbon biofuel later in the supply chain.
The Canola Council, and other stakeholders, now have 75 days to submit their formal comments on the proposed regulations. The government has said it plans to publish its final rules for implementing the CFS in late 2021.
After years of discussions, the proposed fuel standard was rolled out this month as part of the Liberal government’s new climate plan — the same plan that includes a $170 per tonne carbon tax by 2030. Many farmers and farm groups have blasted the Liberals’ carbon tax agenda, saying it will dramatically hurt farm profitability, while also criticizing the government for failing to acknowledge the carbon sequestration that occurs in agriculture.
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