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Clean Fuel Regulations (SOR/2022-140)

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Regulations are current to 2024-05-01

Verification (continued)

Requirements Respecting Verification Bodies (continued)

Marginal note:Team leader

  •  (1) Each verification must be conducted by a team that includes a team leader who is an employee of the verification body.

  • Marginal note:Mandatory team members

    (2) Each verification must be conducted by a team that includes

    • (a) in the case of the verification of an application or report that relates to low-carbon-intensity fuel that is produced using an eligible feedstock referred to in paragraph 46(1)(c),

      • (i) a specialist in forestry or agriculture, as the case may be, who is recognized as a forestry engineer, professional forester, agricultural engineer or agrologist by

        • (A) a Canadian professional association, in the case of forestry or agriculture that occurs in Canada, or

        • (B) a relevant national authority of the country in which the forestry or agriculture occurs, in any other case, or

      • (ii) a specialist in biodiversity who holds a bachelor’s degree in biology, natural sciences or environmental sciences granted by a Canadian university, or an equivalent degree granted by a university outside Canada;

    • (b) in the case of the verification of an application or report that relates to the sequestration of CO2e emissions in geological land formations, whether or not those emissions are used to enhance oil recovery, a specialist in geological carbon storage who is recognized as a geologist by

      • (i) a relevant Canadian professional order of geologists, in the case of sequestration in Canada, or

      • (ii) a relevant national authority of the country in which the sequestration or use occurs, in any other case;

    • (c) in the case of the verification of an application referred to in section 130 or a carbon-intensity pathway report submitted under section 123, a specialist life-cycle assessment critical reviewer who

      • (i) has knowledge of the requirements set out in ISO Standard 14040 and ISO Standard 14044 with respect to life-cycle assessment and set out in Technical Specification ISO/TS 14071, entitled Environmental management — Life cycle assessment — Critical review processes and reviewer competencies: Additional requirements and guidelines to ISO 14044:2006, published by the International Organization for Standardization,

      • (ii) has knowledge of

        • (A) the Specifications for Fuel LCA Model CI Calculations and current practices with respect to the life-cycle assessment,

        • (B) the creation and review of life-cycle assessment data sets,

        • (C) the critical review of life-cycle assessments,

        • (D) all scientific disciplines relevant to life-cycle assessment,

        • (E) the relevant performance aspects of the product system that is being assessed, including environmental and technical performance aspects,

      • (iii) has conducted at least two life-cycle assessments, and

      • (iv) within the preceding 10 years, has conducted at least one critical review of a life-cycle assessment as an internal expert, or at least two critical reviews of a life-cycle assessment as an external expert; and

    • (d) in the case of the verification of a report submitted under section 125, 127 or 128, a specialist in financial accounting who

      • (i) has credentials that are recognized by a competent Canadian professional order of accountants, and

      • (ii) has knowledge of the accounting basis used for the entity that they are auditing and is proficient in the application of that accounting basis.

  • Marginal note:Definition of specialist

    (3) For the purposes of paragraphs (2)(a) to (d), specialist means an individual with at least four years of work experience, acquired over the most recent 10 years, in the field of the specialization.

Marginal note:Subcontract — conditions

  •  (1) Any activities that are conducted as part of the verification of an application or a report, other than those conducted by a team leader referred to in subsection 141(1) and by an independent reviewer referred to in section 139, may be subcontracted to another person if

    • (a) that other person has entered into a written contract with the verification body to conduct those activities;

    • (b) that other person has entered into a written confidentiality agreement with respect to information obtained during the conduct of those activities; and

    • (c) the verification body has put in place processes that permit it to evaluate the work of that other person.

  • Marginal note:Applicable requirements

    (2) Subsections 141(2) and (3) and sections 145 to 153 apply in respect of any activities subcontracted to another person under subsection (1).

Marginal note:Outsourcing of verification — conditions

  •  (1) Any activities that are carried out as part of the verification of an application or report, or any part of those activities, may be outsourced to any other verification body that is accredited in accordance with section 138 if

    • (a) the total number of hours of work performed by other verification bodies in carrying out the outsourced activities, in proportion to the total number of hours of work performed for the purposes of the verification, does not exceed the percentage specified in the Methods for Verification and Certification;

    • (b) the verification body has entered into a written contract with any verification body to which those activities are outsourced;

    • (c) any verification body to which those activities are outsourced is accredited as competent in the areas referred to in subsection 140(1) that are applicable to the application or report being verified;

    • (d) the verification report is prepared in accordance with section 133 by the verification body that is outsourcing those activities; and

    • (e) the verification body that is outsourcing those activities remains responsible for ensuring that the verification is carried out in full, including any outsourced activities.

  • Marginal note:Applicable requirements

    (2) Section 137, subsections 138(1) and (2), section 140, subsections 141(2) and (3) and sections 145 to 153 apply in respect of any activities that are outsourced to another verification body.

Marginal note:Other verification report

 A verification report that was prepared by another verification body may be relied on for the purposes of a new verification if

  • (a) the number of hours of work performed by the other verification body, in proportion to the total number of hours of work performed for the purposes of the new verification, does not exceed the percentage specified in the Methods for Verification and Certification;

  • (b) the verification body that relies on the other verification body’s verification report prepares the new verification report in accordance with section 133;

  • (c) the verification body that relies on the other verification body’s verification report remains responsible for the entirety of the new verification report, including the opinion referred to in section 154; and

  • (d) the other verification body’s verification was conducted in accordance with the applicable requirements of these Regulations.

Marginal note:Conflicts of interest

  •  (1) A person who carries out any verification activities with respect to an application or report or who acts as an independent reviewer of a verification must be independent of

    • (a) the employees of the federal public administration who administer or implement these Regulations or carry out any related activities; and

    • (b) the person who is making the application or is required to submit the report.

  • Marginal note:Informing Minister of conflict

    (2) Before a verification body begins the verification of an application or report, the person who is making the application or is required to submit the report must inform the Minister of whether a conflict of interest exists between them or any employee referred to in paragraph (1)(a) and any individual who will conduct the verification or act as the independent reviewer.

  • Marginal note:Discovery of conflict

    (3) If the verification body discovers a conflict of interest, it must inform the Minister within five days after the day on which it discovers it.

  • Marginal note:Measures taken to manage conflict

    (4) A person or verification body that informs the Minister of a conflict of interest under subsection (2) or (3) must provide a description of the conflict of interest and the measures that will be taken to manage it.

Marginal note:No work without decision by Minister

  •  (1) If a conflict of interest has been discovered, the person who has the conflict of interest must not conduct any verification work and the verification must not be the subject of an independent review, unless the Minister decides that the measures taken under subsection 145(4) will effectively manage the conflict.

  • Marginal note:Decision within 20 days

    (2) The Minister must inform the person who is making the application or is required to submit the report of the Minister’s decision within 20 days after the day on which the Minister is informed of the conflict of interest.

Marginal note:Five consecutive verifications

  •  (1) An individual who acts as an independent reviewer with respect to the verification of an application or a report or who carries out any verification activities for the person who is making the application or submitting the report must not act as an independent reviewer or carry out any verification activities for that same person with respect to the same type of application or report for more than five consecutive compliance periods.

  • Marginal note:Three compliance periods

    (2) An individual who, for five consecutive compliance periods, has acted as an independent reviewer with respect to the verification of an application or a report or carried out verification activities for the person who made the application or submitted the report must not act as an independent reviewer or carry out verification activities for that same person for three consecutive compliance periods beginning on the day on which the most recent verification report was submitted to the Minister.

  • Marginal note:Limitation — five compliance periods

    (3) A person who has made an application or submitted a report must not act as an independent reviewer with respect to the verification of the same type of application or a report or carry out verification activities for the same type of application or report unless five compliance periods have elapsed between the day on which they made the application or submitted the report and the day on which the independent review or the verification, as the case may be, begins.

  • Marginal note:Employees of federal public administration

    (4) An employee of the federal public administration who administers or implements these Regulations or carries out any related activities must not carry out any activity that is part of a verification of an application or report or an independent review of a verification, unless five compliance periods have elapsed between the day on which their employment ends and the day on which the independent review or the verification, as the case may be, begins.

  • Marginal note:Verification of reports related to applications

    (5) An individual must not carry out verification activities for a report submitted under any of sections 120 to 123 or act as an independent reviewer with respect to the verification of such a report if, during the five preceding years, they carried out verification activities, or acted as the independent reviewer, with respect to an application made under subsection 80(1) or 91(1) for the approval of a carbon intensity that is referred to in the report.

  • Marginal note:Verification of certain reports

    (6) An individual who carried out verification activities for a report that was submitted under section 123 or acted as an independent reviewer with respect to the verification of such a report must not, during the same compliance period, act as an independent reviewer or carry out verification activities with respect to a report that was submitted under section 120, 121 or 122 if the report was submitted by the same person who submitted the report under section 123 and it relates to the same carbon intensity.

Applicable Standards

Marginal note:Verification of application and report

  •  (1) The verification of an application or report must be conducted by a verification body in accordance with

    • (a) ISO Standard 14064-3:2019, at a reasonable level of assurance; and

    • (b) the Methods for Verification and Certification.

  • Marginal note:Audit of financial information

    (2) The verification of an application or a report that includes any financial information must include an audit of the information that is conducted in accordance with Canadian auditing standards, the primary source of which is the CPA Canada Handbook – Assurance, at a reasonable level of assurance.

  • Marginal note:Critical review

    (3) The verification of an application referred to section 130 or report submitted under section 123 that includes any information relating to the life cycle of a fuel must include a critical review of the life-cycle assessment that is conducted in accordance with ISO Standard 14044.

Marginal note:Criteria

 For the purposes of ISO Standard 14064-3:2019, a reference to “criteria” in subclause 3.6.10 of that Standard is to be read as

  • (a) in the case of an audit of financial information referred to in subsection 148(2), the International Financial Reporting Standards, published by the International Accounting Standards Board, or the Accounting Standards for Private Enterprises, published by the Accounting Standards Board;

  • (b) in the case of a critical review of a life-cycle assessment referred to in subsection 148(3), ISO Standard 14044; and

  • (c) in any other case, a reference to these Regulations and the applicable emission-reduction quantification method established under subsection 31(1) or 32(1).

Marginal note:Materiality quantitative threshold

 For the purposes of subclause 5.1.7 of ISO Standard 14064-3:2019, the quantitative materiality thresholds are equal to,

  • (a) in the case of a carbon intensity,

    • (i) 1 gCO2e/MJ, if the absolute value of the carbon intensity is less than 20 gCO2e/MJ,

    • (ii) 5%, if the absolute value of the carbon intensity is between 20 and 100 gCO2e/MJ, and

    • (iii) 5 gCO2e/MJ, if the absolute value of the carbon intensity is greater than 100 gCO2e/MJ; and

  • (b) in any other case, 5%.

Marginal note:Material qualitative misstatements

 The verification body must assess any qualitative misstatements contained in an application or report to determine if they are material qualitative misstatements.

Marginal note:Site visits

  •  (1) In addition to meeting the requirements set out in ISO Standard 14064-3:2019 in relation to site visits, the verification of an application or a report must include,

    • (a) in the case of a verification of an application or a report that relates to no more than five sites, a visit by the verification body to each site at least once every five years after the first site visit; and

    • (b) in the case of the verification of an application or report that relates to more than five sites, a visit by the verification body to each material site if there is a high risk of misreporting and the likely cause of any misreporting is at the site and if remote evidence-gathering activities would not reduce the risk to a reasonable level.

  • Marginal note:Interpretation of ISO Standard 14064-3:2019

    (2) For the purposes of ISO Standard 14064-3:2019, a reference to a “site” in subclause 3.6.13 of that Standard is to be read as a reference to

    • (a) the facility at which a fuel, material input or energy source is produced;

    • (b) the location where a CO2e-emission-reduction project described in section 30 is carried out;

    • (c) the location where a feedstock used to produce a low-carbon-intensity fuel is harvested;

    • (d) the point of import into Canada of a low-carbon-intensity fuel;

    • (e) a charging station or fuelling station; or

    • (f) the location of a centralized computer data management system that relates to an application or report.

 

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