Navius Research was hired by Clean Energy Canada (CEC) to conduct a quantitative analysis of the Clean Fuel Standard (CFS) to support CEC’s ongoing participation in the policy consultation process. The CFS is a low-carbon fuel standard that will be applied nationally with the objective of reducing Canadian greenhouse gas (GHG) emissions by 30 Mt CO2e per year in 2030. This analysis uses two of Navius Research’s in-house models, CIMS and OILTRANS, to forecast the impact of the CFS on Canada’s energy consumption and GHG emissions in 2030. EnviroEconomics used these modeling results to further explore how the CFS may affect jobs and GDP.
Increased biofuel consumption is the main driver of transportation GHG abatement under the CFS. Renewable electricity and carbon capture and storage are the main drivers of abatement in stationary energy consumption.
The price of transportation compliance credits under the CFS will be 150-180 $/tonne and the price of stationary credits will be around 40 $/tonne (2015 CAD). Because the CFS is a GHG intensity-based policy, the full value of the CFS carbon price will not be reflected in energy prices.
The impact of the CFS on fossil fuel prices will be an order of magnitude smaller than the potential impact of the price of crude oil and natural gas.
The CFS will likely double the quantity of biofuels consumed in Canada in 2030, which will be supplied by increased imports (56% of the supply) and increased domestic production (44%).
The CFS creates a net-increase of 11,000 direct and indirect jobs and a net-increase of $2.7 billion in GDP in 2030 (2015 CAD).