Fuel standard reduced for short term

OTTAWA — The federal government’s planned Clean Fuel Standard is being scaled back in the short term to give the fossilfuel industry a bit more time to recover from the pandemicinduced economic collapse.

But to make up for less stringent emissions reductions in the beginning, Environment Minister Jonathan Wilkinson said, fuel producers will have to do more to green up their gasoline and diesel fuels starting in 2026.

“We think that’s appropriate in the context of the current environment where firms are having to come through a very difficult time,” Wilkinson said in an interview. The overall effect, he said, will not reduce the impact the standard is to have by the time it is fully rolled out in 2030.

With demand for oil in particular down sharply amid the COVID-19 economic slowdown, and market prices plummeting to record lows in April because of a production war between Russia and Saudi Arabia, Canada’s fossilfuel sector is in rough financial shape, making it difficult, if not impossible, to make the kind of investments needed to meet the new fuel standards.

At the end of March, the Canadian Association of Petroleum Producers asked the government to put off the Clean Fuel Standard entirely by three years, pushing the start date back from 2022 to 2025 for liquid fuels such as gasoline and diesel, and from 2023 to 2026 for gaseous fuels such as propane.

Wilkinson said he understands the need to be flexible, but “climate change is not going away” so weakening the standard overall was not a consideration. Acknowledging that firms need more time to be able to comply with the standard is a good compromise, he said.

The Clean Fuel Standard requires fuel companies to reduce the carbon intensity of their products. Specifically, that means cutting down the amount of carbon dioxide produced when fuels are burned to run vehicles, furnaces and machinery.