Think transportation GHG emissions targets can be reached without biofuels mandates? Think again.

October 17, 2017 |

By Gordon Quaiattini, Special to The Digest

Governments serious about climate change should be wary about eliminating the mandate for renewable fuels, and those promising a low carbon fuel market without it.

Earlier this month Canada’s Environment Commissioner urged MPs to push the government from ‘seemingly endless planning mode into action mode’ on climate change. By now we all know the road to achieving meaningful GHG emission reductions from transportation isn’t easy: new infrastructure, clean technology, and changing consumer habits can be tricky business. But identifying and expanding existing policy options that are already proven to reduce GHGs should be a much simpler exercise. Or at least one would expect.

A big chunk of the federal Government’s planning revolves around its forthcoming Clean Fuel Standard (CFS). The goal of the CFS is to reduce GHG emissions by 30 million tonnes annually by 2030 – equivalent to taking 7 million cars off the road. The federal government’s Renewable Fuels Regulation requires 5% renewable content in gasoline and 2% for diesel. Since 2006, this policy has been responsible for reducing GHGs from transportation by 4.2 million tons annually – or 1 million cars off the road every year.

Canada’s Renewable Fuel Regulation acknowledges ethanol as the only low-carbon, renewable fuel alternative for gasoline available at commercial scale and is the single best policy tool for reducing emissions through the increased use of lower carbon, renewable fuels. Axing it now, as the Government seeks to reach the most ambitious GHG reduction targets it has ever set, seems to defy logic.

Those who believe that the CFS can reach its objectives without complementary measures, like mandated requirements for biofuels, cite terms like “flexibility” and argue policy should set targets but “not dictate ways” targets are then reached. Even more often, they are representing the views of traditional oil and gas companies. This is problematic as, in the absence of biofuel mandates, traditional fossil fuel producers would have sole discretion over the content of fuels, carbon included.

Fortunately for policymakers caught in the middle, objective research and experience from other jurisdictions is available. The Conference Board of Canada, for example, recently noted that: “a clean fuel standard that fails to maintain, or expand, current blend mandates for renewable fuels is not recommended”. Meanwhile, Doyletech’s economic impact assessment released only days ago shows that raising Ontario’s mandates to 10% ethanol and 5% biodiesel would have an ongoing impact of almost $1 billion per year.

Moreover, clean fuels targets envisioned as part of a broader strategy are almost undoubtedly unattainable without mid-to high-level blending of renewables into the fuel stream – something best achieved through policy, not only price. Internationally, governments that have coupled clean fuel standards with blending mandates have been successful in reducing GHGs from transportation, i.e., California. Those where required volumes were replaced with an intensity-based low-carbon fuel standard saw backsliding. In other words, GHG emissions increased in jurisdictions where biofuel mandates were eliminated.

Maintaining and building on blend mandates is critical to the success of Canada’s climate change agenda. Canada’s Renewable Fuel Regulations have spurred investment in Canada’s renewable fuels industry, created tens of thousands of jobs in rural Canada, and take the environmental equivalent of 1 million cars off the road annually. These economic and environmental benefits will only improve with continued blending requirements.

The Government’s proposed Clean Fuel Standard is a complex policy that will have lasting impact on the environment. Government should bet on a proven model. Now is the time to maintain this mechanism, increase the Renewable Fuels Standard to E-10 and include pathways for greater use of higher ethanol blends – a proven policy to incent the use and production of low carbon fuel that will help reach Canada’s GHG targets and pave the way to meet our commitments with the Paris Accord.

Gordon Quaiattini is the former president of Canadian Renewable Fuels Association (CRFA). He served with the Association for 10 years, including successfully advocating for a national renewable fuels strategy for Canada that included the passage of legislation mandating the use of ethanol and biodiesel, and the development and implementation of renewable fuels regulations.

 

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