Clean Fuel Regulations (SOR/2022-140)
Full Document:
- HTMLFull Document: Clean Fuel Regulations (Accessibility Buttons available) |
- XMLFull Document: Clean Fuel Regulations [915 KB] |
- PDFFull Document: Clean Fuel Regulations [1507 KB]
Regulations are current to 2024-10-14 and last amended on 2024-09-30. Previous Versions
Compliance Credits (continued)
Use (continued)
Marginal note:December 15 — gasoline
14 (1) For the purposes of subsection 12(1), if a primary supplier, on the August 1 that follows the end of a compliance period, has not complied with the volumetric requirement set out in subsection 6(1) for that compliance period, the primary supplier must, no later than the following December 15, comply with that requirement by using the compliance credits transferred to them under section 112.
Marginal note:December 15 — diesel
(2) For the purposes of subsection 12(2), if a primary supplier, on the August 1 that follows the end of a compliance period, has not complied with the volumetric requirement set out in subsection 7(1) for that compliance period, the primary supplier must, no later than the following December 15, comply with that requirement by using the compliance credits transferred to them under section 112.
Marginal note:Other credits
(3) For the purposes of section 11 and subject to subsection 15(1), if a primary supplier, on the August 1 that follows the end of a compliance period, has not satisfied the reduction requirement for that compliance period, the primary supplier must, no later than the December 15 that follows the end of that compliance period, use the compliance credits that were transferred to them under section 112, or that they created by contributing to a registered emission-reduction funding program in accordance with paragraph 118(1)(b), to satisfy that reduction requirement.
Marginal note:Compliance — December 15
(4) Subject to sections 16 to 18, a primary supplier must, no later than the December 15 that follows the end of a compliance period, use the compliance credits in their accounts opened under section 28 to satisfy the total reduction requirement and comply with the volumetric requirements set out in subsections 6(1) and 7(1) for that compliance period.
Marginal note:December 16 — cancellation
(5) On the December 16 that follows the expiry of a compliance period, if any of the compliance credits that are referred to in subsection (3) have not been used by the primary supplier, the Minister must cancel those credits.
Marginal note:Non-application — subsections (1) to (4)
(6) Subsections (1) to (4) do not apply in respect of any compliance period that ends before July 1, 2023.
Marginal note:Limits on credit use — funding program
15 (1) The primary supplier must ensure that the total number of compliance credits created under subsection 19(2) — that are used in accordance with subsections 13(3) and 14(3), paragraph 18(1)(a) and subsection 18(3) during the calendar year that follows the end of a compliance period — does not exceed 10% of the primary supplier’s total reduction requirement.
Marginal note:Limit — paragraph 28(b)
(2) The primary supplier must ensure that the total number of compliance credits in their account opened under paragraph 28(b) — that are used in accordance with subsection 13(4) and paragraph 18(1)(b) during the calendar year that follows the end of a compliance period — does not exceed 10% of the primary supplier’s total reduction requirement.
Marginal note:Limit — generic quantification method
(3) The primary supplier must ensure that the total number of compliance credits created under paragraph 19(1)(a) in respect of a project for which a generic emission-reduction quantification method is applicable — that are used in accordance with subsection 13(4) and paragraphs 18(1)(b) and (c) during the calendar year that follows the end of a compliance period — does not exceed 10% of the primary supplier’s total reduction requirement.
Marginal note:Deferral of reduction requirements
16 (1) A primary supplier may, no later than the December 15 that follows the end of a compliance period, defer satisfaction of their reduction requirements for that compliance period by any number of compliance credits that does not exceed the greater of zero and the result of the formula
10% x Rcurrent − Rdeferred
where
- Rcurrent
- is the sum of their reduction requirements in respect of gasoline and diesel for that compliance period; and
- Rdeferred
- is the sum of all deferred portions of the reduction requirements in respect of gasoline and diesel for previous compliance periods.
Marginal note:Conditions for deferral
(2) The primary supplier may defer a portion of their reduction requirements for a compliance period under subsection (1) only if
(a) the Minister has sent a notice in accordance with subsection 111(2) for that compliance period or the primary supplier has acquired by transfer through the compliance-credit clearance mechanism the number of compliance credits determined in accordance with paragraph 112(5)(b) for that compliance period; and
(b) the primary supplier has created enough compliance credits by contributing to a registered emission-reduction funding program to satisfy 10% of the total reduction requirement for that compliance period in respect of all types of fuels.
Marginal note:Compliance required after five years
(3) A primary supplier who defers under subsection (1) a portion of their reduction requirements for a compliance period must satisfy the deferred portion no later than the December 15 that follows the fifth anniversary of the end of that compliance period.
Marginal note:Increase to deferred portion
17 On each December 16 that follows the end of a compliance period for which a portion of the reduction requirements is deferred under subsection 16(1) and that precedes the fifth anniversary of the end of that compliance period, the deferred portion of the reduction requirements is to be multiplied by 1.05.
Marginal note:Reduction — July 31
18 (1) In order to reduce a deferred portion of the reduction requirements in accordance with section 11, the primary supplier must, during the period that begins on the day after a compliance period expires and ends on the July 31 that follows that day, use the following compliance credits that are in their accounts opened under section 28 and that exceed the number required to satisfy the reduction requirements for the compliance period that ended most recently:
(a) subject to subsection 15(1), all of the compliance credits that they created by contributing to a registered emission-reduction funding program in accordance with paragraph 118(1)(a);
(b) subject to subsections 15(2) and (3), any compliance credits in their account opened under paragraph 28(b); and
(c) subject to subsection 15(3), any compliance credits in their account opened under paragraph 28(a).
Marginal note:Election
(2) If the primary supplier has more credits than the number required to satisfy the deferred portion of the reduction requirements in accordance with subsection (1), they may elect to use any number of compliance credits referred to in paragraphs (1)(b) and (c) to satisfy the deferred portion of the reduction requirements.
Marginal note:Reduction — December 15
(3) Subject to subsection 15(1), if a primary supplier, on the August 1 that follows the end of a compliance period, has not satisfied the deferred portion of the reduction requirements for a previous compliance period in accordance with subsection (2), the primary supplier must, no later than the following December 15, reduce the deferred portion of the reduction requirements by using all of the compliance credits in their account opened under paragraph 28(a) — that were transferred to them through the compliance-credit clearance mechanism under section 112 or that they created by contributing to a registered emission-reduction funding program in accordance with paragraph 118(1)(b) — that exceed the number of compliance credits required to satisfy their reduction requirements for the compliance period that ended most recently.
Marginal note:Multiple compliance periods
(4) If a primary supplier has not satisfied the deferred portion of the reduction requirements for more than one previous compliance period, they must not use any compliance credits to reduce the deferred portion of the reduction requirements in accordance with subsection (1) or (3) for a particular compliance period unless they have satisfied the deferred portion of the reduction requirements for every compliance period that precedes that particular compliance period.
Marginal note:Non-application
(5) Subsections (1) to (4) do not apply before January 1, 2025.
Creation
Reduction of CO2e Emissions
Marginal note:Liquid class
19 (1) A registered creator may create a compliance credit in respect of the liquid class in the following cases:
(a) the registered creator, or a person with whom they have entered into an agreement under section 21, lowers the carbon intensity of a fuel in the liquid class by carrying out, in respect of that fuel, a CO2e-emission-reduction project that is described in section 30 and that is recognized under subsection 35(1), 36(1), 37(3), 39(1) or 40(3), as the case may be;
(b) the registered creator imports into Canada a quantity of low-carbon-intensity fuel to which may be attributed a reduction in the number of tonnes of CO2e that would otherwise have been emitted by the use of a fuel in the liquid class, if the low-carbon-intensity fuel
(i) is in the liquid state at standard conditions,
(ii) is one referred to in section 94,
(iii) is used or sold for use as a fuel in Canada whether as neat fuel or as part of a blend, and
(iv) meets the requirements set out in section 56;
(c) the registered creator, or a person with whom they have entered into an agreement under section 21, produces in Canada a quantity of low-carbon-intensity fuel to which may be attributed a reduction in the number of tonnes of CO2e that would otherwise have been emitted by the use of a fuel in the liquid class, if the low-carbon-intensity fuel
(i) is in the liquid state at standard conditions,
(ii) is one referred to in section 94,
(iii) is used or sold for use as a fuel in Canada whether as neat fuel or as part of a blend, and
(iv) meets the requirements set out in section 56; or
(d) the registered creator, or a person with whom they have entered into an agreement under section 21, reduces the number of tonnes of CO2e emissions by displacing the use in Canada of a quantity of fuel in the liquid class as a fuel for a vehicle with the use in Canada of
(i) a quantity of propane, compressed natural gas or liquefied natural gas as a fuel for a vehicle, in accordance with section 98,
(ii) a quantity of renewable propane, co-processed low-carbon-intensity propane, compressed renewable natural gas or liquefied renewable natural gas that meets the requirements set out in section 56 as a fuel for a vehicle, in accordance with section 99,
(iii) a quantity of renewable propane or renewable natural gas that meets the requirements set out in section 56 as a fuel for a vehicle, in accordance with section 100,
(iv) a quantity of electricity as an energy source for an electric vehicle, in accordance with sections 101 and 102, or
(v) a quantity of hydrogen that meets the requirements set out in section 56, in accordance with section 104,
(A) as an energy source for a hydrogen fuel cell vehicle, or
(B) as a fuel for a vehicle other than a hydrogen fuel cell vehicle.
Marginal note:Contribution to funding program
(2) A primary supplier may create a compliance credit in respect of the liquid class if they make a contribution to a registered emission-reduction funding program in accordance with section 118.
Marginal note:Gaseous class
20 A registered creator may create a compliance credit in respect of the gaseous class in the following cases:
(a) the registered creator, or a person with whom they have entered into an agreement under section 21, lowers the carbon intensity of a fuel in the gaseous class by carrying out, in respect of that fuel, a CO2e-emission-reduction project described in paragraph 30(d) that reduces the carbon intensity of a fuel in the liquid class and is recognized under subsection 36(1), 37(3), 39(1) or 40(3), as the case may be;
(b) the registered creator imports into Canada a quantity of low-carbon-intensity fuel to which may be attributed a reduction in the number of tonnes of CO2e that would otherwise have been emitted by the use of a fuel in the gaseous class, if the low-carbon-intensity fuel
(i) is biogas, renewable natural gas, renewable propane or hydrogen,
(ii) is one referred to in section 95,
(iii) is used or sold for use as a fuel in Canada whether as neat fuel or as part of a blend, and
(iv) meets the requirements set out in section 56; or
(c) the registered creator, or a person with whom they have entered into an agreement under section 21, produces in Canada a quantity of low-carbon-intensity fuel to which may be attributed a reduction in the number of tonnes of CO2e that would otherwise have been emitted by the use of a fuel in the gaseous class, if the low-carbon-intensity fuel
(i) is biogas, renewable natural gas, renewable propane or hydrogen,
(ii) is one referred to in section 95 or 96, as the case may be,
(iii) is used or sold for use as a fuel in Canada whether as neat fuel or as part of a blend, and
(iv) meets the requirements set out in section 56.
Marginal note:Agreement to create credits
21 (1) A registered creator may, before they have created any provisional compliance credits, enter into an agreement to create compliance credits for a compliance period
(a) with a person who is carrying out a CO2e-emission-reduction project described in section 30 or a person who is referred to in subsection 98(1), 99(1), 101(1), 102(1) or 104(1); or
(b) with a producer who is referred to in subsection 94(1), 95(1), 96(1) or 100(1), if the agreement applies only to the creation of compliance credits through the production of a quantity of low-carbon-intensity fuel in Canada.
Marginal note:Validity of agreement — requirements
(2) The agreement is not valid unless it is signed by the authorized agents of each of the parties to the agreement and contains the following information:
(a) with respect to each party to the agreement,
(i) their name, civic address, postal address, telephone number and, if any, email address,
(ii) the name, title, civic address, postal address, telephone number and, if any, email address of their authorized agent, and
(iii) the name, title, civic address, postal address, telephone number and, if any, email address of a contact person, unless the contact person is the authorized agent;
(b) an indication of the compliance period to which the agreement relates;
(c) if the agreement relates to a CO2e-emission-reduction project described in section 30,
(i) the name of the facility at which the project is carried out or, if the equipment with which it is carried out is not within a facility, the name of that equipment,
(ii) the GPS coordinates to the fifth decimal place and, if any, civic address of that facility or equipment, and
(iii) an indication of the type of co-processed low-carbon-intensity fuel produced at the facility, if applicable;
(d) if the agreement relates to the production of the fuel referred to in subsection 94(1), 95(1), 96(1) or 100(1) in a facility, with respect to each facility where the fuel is produced,
(i) the name, GPS coordinates to the fifth decimal place and, if any, civic address of that facility, and
(ii) an indication of the type of fuel produced at the facility;
(e) if the agreement relates to the supply of a fuel referred to in subsection 98(1) or 99(1) at fuelling stations, with respect to each fuelling station,
(i) the name, GPS coordinates to the fifth decimal place and, if any, civic address of the fuelling station, and
(ii) an indication of the type of fuel supplied by the fuelling station;
(f) if the agreement is with a charging-network operator referred to in subsection 102(1), with respect to each charging station in the charging-network operator’s network,
(i) an indication of the province in which it is located, and
(ii) an indication of whether it is intended primarily for use by the occupants of a private dwelling-place, for use by the public or for another use;
(g) if the agreement is with a charging-site host referred to in subsection 101(1), with respect to each charging station that the charging-site host owns or leases,
(i) an indication of the province in which it is located, and
(ii) the name of the charging-network operator, if any, who operates the communication platform that collects data from the charging station; and
(h) if the agreement is with an owner or operator referred to in subsection 104(1) of one or more hydrogen fuelling stations, the name, GPS coordinates to the fifth decimal place and, if any, civic address of each fuelling station.
- Date modified: