Research
Summary
We describe the Clean Fuel Regulations (CFR), previously known as the Clean Fuel Standard (CFS), and share insights from recent work conducted about the policy for industry and governments across Canada. We review the Canada Gazette Part I version of the CFR, published in December 2020. We find that the CFR will create a multi-billion dollar credit market that is sensitive to external market dynamics (e.g., electric vehicle adoption, benchmark oil prices etc.) and to changes in policy design.
Highlights:
- The credit market is sensitive to changes in macroeconomic conditions such as variations in global oil prices, and to different technology evolution pathways like the rate at which battery costs may decline in the future.
- CFR impacts are also sensitive to policy design variations like changing the limits on credits generated via fuel switching to electricity, which provides policymakers with a powerful lever to adjust policy outcomes in response to unforeseen market developments.
- Credit prices are likely to rise in the earlier years of compliance, stabilizing between 2025 and 2027 as the impacts of other policies begin to increasingly interact with the CFR.
- The policy creates a multi-billion dollar credit market, providing funding for multiple low-carbon reduction initiatives, including biofuels supply, carbon capture and storage deployment, transport fuel switching to electricity and hydrogen, among other actions.
Download the CFR policy design and insights summary here.
To learn more about the policy and how we can help understand it, please contact us.
Other Research
2023
2022
Damage Control: Reducing the costs of climate impacts in Canada
Animal-sourced food consumption and Canada’s emissions targets
Simulating Canada’s 2030 Emissions Reduction Plan
Potential of small modular reactors in hard-to-decarbonize industries
Hitting Canada’s climate targets with biogas & RNG
Under Water: The costs of climate change for Canada’s infrastructure
2021
Informing a strategy for reducing agricultural greenhouse gas emissions in British Columbia
The role of carbon capture and storage in Canada’s net zero future
Canada’s clean energy economy to 2030
Canada’s Clean Fuel Regulations explanation and insights
Towards Canada’s fair share: New modeling and analysis on achieving a stronger climate target
Assessing the impacts of the Conservative Plan to Combat Climate Change
2020
2019
Meeting Canada’s climate mitigation commitments under the Paris Agreement
Quantifying Canada’s clean energy economy
California and Québec’s ZEV mandates description
Reversing carbon leakage in the Canadian aluminum sector
Supporting the development of CleanBC
Saskatchewan’s carbon tax numbers are in and the answer is … reporting errors
Older
Review of British Columbia’s RLCFRR energy effectiveness ratios
Refining margins and fuel policy in British Columbia
Analysis of the proposed Canadian Clean Fuel Standard
Electrification best practices in Canada
A review of ECCC’s method for estimating upstream GHGs
Refining margins in British Columbia
Greenhouse gas emissions resulting from the Energy East pipeline project
The Renewable and Low Carbon Fuel Requirement Regulation
How do industrial GHG reduction efforts affect demand for skilled labour?
Is British Columbia’s carbon tax good for household income?
How resilient are the Canadian oil sands to carbon constraints?