Clean Fuel Regulations (SOR/2022-140)

Marginal note:Creator — producer or importer

• 100 (1) A person who, during a compliance period, displaces the use of a fuel in the liquid class by producing in Canada or importing into Canada, a quantity of low-carbon-intensity fuel that is renewable propane or renewable natural gas for use in Canada as a fuel for a vehicle must not create provisional compliance credits in respect of the liquid class for the compliance period unless they possess supporting documents that

  • (a) establish that the fuel was physically supplied to a fuelling station or supplied to the fuelling station by means of a contractual agreement;

  • (b) indicate the name of the owner or operator of the fuelling station;

  • (c) indicate the quantity of the fuel that was supplied to the fuelling station during the compliance period;

  • (d) establish that the quantity of the fuel that was supplied by the producer to the fuelling station and used to create compliance credits during the compliance period does not exceed the quantity of the fuel that was supplied to vehicles at the fuelling station during the compliance period; and

  • (e) if the fuel was supplied to the fuelling station by means of a contractual agreement, establish that there is a physical connection between the fuelling station and the producer of the fuel.

• Marginal note:Number of compliance credits

  (2) The number of compliance credits that the person referred to in subsection (1) may create for a compliance period in respect of a particular fuel is determined by the formula

  CI_diff × (Q × D) × 10^-6

  where

  CI_diff

  is

  • (a) in the case of renewable natural gas, the difference between the reference carbon intensity of renewable natural gas, as set out in item 2, column 2, of Schedule 1, and the carbon intensity of the renewable natural gas that is the default carbon intensity referred to in paragraph 75(1)(a), the carbon intensity approved under subsection 85(1) or the actual carbon intensity specified in the carbon-intensity-pathway report referred to in subsection 123(1), as the case may be, and

  • (b) in the case of renewable propane, the difference between the reference carbon intensity of renewable propane, as set out in item 3, column 2, of Schedule 1, and the carbon intensity of the renewable propane that is the default carbon intensity referred to in paragraph 75(1)(a), the carbon intensity approved under subsection 85(1) or the actual carbon intensity specified in the carbon-intensity-pathway report referred to in subsection 123(1), as the case may be;

  Q

  is, subject to subsection 45(1), the quantity of the fuel supplied to the fuelling station, expressed in cubic metres, as determined from the supporting documents referred to in subsection (1); and

  D

  is, at the election of the person, the energy density of the fuel as set out in column 2 of Schedule 2 or as set out in the Specifications for Fuel LCA Model CI Calculations.

Marginal note:Electricity — charging-site host

• 101 (1) A charging-site host may, for a compliance period, create provisional compliance credits in respect of the liquid class by displacing, during the compliance period, the use in Canada of a quantity of fuel in the liquid class with the use in Canada of electricity as an energy source for an electric vehicle of a class that is listed in the Specifications for Fuel LCA Model CI Calculations, if the electricity is supplied to that electric vehicle by a charging station other than any charging station referred to in subsection 102(1).

• Marginal note:Number of compliance credits

  (2) The number of compliance credits that the charging-site host may create under subsection (1) for a compliance period by supplying electricity of a particular carbon intensity to electric vehicles is determined by the formula

  CI_diff × (Q × D) × 10^-6

  where

  CI_diff

  is the difference between the reference carbon intensity for the liquid class for the compliance period, as set out in item 1, column 2, of Schedule 1 and adjusted by the energy efficiency ratio of the electric vehicles, and the carbon intensity of the electricity used by those electric vehicles, as determined by the formula

  (R_ee × CI_ref) − CI_e

  where

  R_ee

  is

  • (a) if the electricity is supplied by a charging station that is not accessible to electric marine vessels,

    • (i) in the case of light-duty electric vehicles, at the election of the registered creator, the energy efficiency ratio on the January 1 of the compliance period for the light-duty class of electric vehicles, as set out in the Specifications for Fuel LCA Model CI Calculations, or an energy efficiency ratio of 2.5, or

    • (ii) in the case of any other class of electric vehicles, at the election of the registered creator, the energy efficiency ratio on the January 1 of the compliance period for the class of the electric vehicles, as set out in the Specifications for Fuel LCA Model CI Calculations, or an energy efficiency ratio of 2.5,

  • (b) if the electricity is supplied by a charging station that is accessible to electric marine vessels, at the election of the registered creator, the energy efficiency ratio on the January 1 of the compliance period for the class of the electric vehicles, as set out in the Specifications for Fuel LCA Model CI Calculations, or an energy efficiency ratio of 2.5, or

  • (c) if the electricity is supplied by a charging station that is accessible to more than one class of electric vehicles and it is not possible to differentiate between the quantity of electricity supplied to each class of electric vehicles, the energy efficiency ratio that is the lesser of the energy efficiency ratios determined under paragraph (a) and (b),

  CI_ref

  is the reference carbon intensity for the liquid class for the compliance period, as set out in item 1, column 2, of Schedule 1, and

  CI_e

  is the carbon intensity of the electricity supplied to the electric vehicles that is determined in accordance with subsection 75(7), that is approved under subsection 85(1) or that is the actual carbon intensity specified in the carbon-intensity-pathway report referred to in subsection 123(1), as the case may be;

  Q

  is the quantity of electricity supplied to the electric vehicles, expressed in kilowatt-hours, as measured by charging stations other than those referred to in subsection 102(1), subject to any measurement accuracy or load test tolerances for charging stations that are indicated in the document entitled Specifications, Tolerances, and Other Technical Requirements for Weighing and Measuring Devices, published by the United States National Institute of Standards and Technology; and

  D

  is 3.6 megajoules per kilowatt-hour.

Marginal note:Electricity – charging-network operator

• 102 (1) A charging-network operator may, for a compliance period, create provisional compliance credits in respect of the liquid class by displacing, during the compliance period, the use in Canada of a quantity of fuel in the liquid class with the use in Canada of electricity as an energy source for an electric vehicle of a class that is listed in the Specifications for Fuel LCA Model CI Calculations, if

  • (a) the compliance period begins on or before January 1, 2035 and the electricity is supplied to that electric vehicle by a charging station that is owned and intended primarily for use by the occupants of a private dwelling-place and that is installed on or before December 31, 2030; or

  • (b) the electricity is supplied to that electric vehicle by a charging station that is intended primarily for use by the public and whose location is indicated on the website or mobile application of the charging-network operator.

• Marginal note:Number of compliance credits

  (2) The number of compliance credits that the charging-network operator may create under subsection (1) for a compliance period by supplying electricity of a particular carbon intensity is determined by the formula

  CI_diff × (Q × D) × 10^-6

  where

  CI_diff

  is the difference between the reference carbon intensity for the liquid class for the compliance period, as set out in item 1, column 2, of Schedule 1 and adjusted by the energy efficiency ratio of the electric vehicles, and the carbon intensity of the electricity used by those vehicles, as determined by the formula

  (R_ee × CI_ref) − CI_e

  where

  R_ee

  is, at the election of the registered creator, the energy efficiency ratio for the light-duty class of the electric vehicles, as set out in the Specifications for Fuel LCA Model CI Calculations on the January 1 of the compliance period, or an energy efficiency ratio of 2.5,

  CI_ref

  is the reference carbon intensity for the liquid class for the compliance period, as set out in item 1, column 2, of Schedule 1, and

  CI_e

  is the carbon intensity of the electricity supplied to the electric vehicles that is determined in accordance with subsection 75(7), that is approved under subsection 85(1) or that is the actual carbon intensity specified in the carbon-intensity-pathway report referred to in subsection 123(1), as the case may be;

  Q

  is the quantity of electricity supplied to the electric vehicles, expressed in kilowatt-hours, as measured by the charging stations referred to in subsection (1), subject to any measurement accuracy or load test tolerances for charging stations that are indicated in the document entitled Specifications, Tolerances, and Other Technical Requirements for Weighing and Measuring Devices, published by the United States National Institute of Standards and Technology; and

  D

  is 3.6 megajoules per kilowatt-hour.

Marginal note:Use of revenue — electric vehicles

• 103 (1) A charging-network operator referred to in subsection 102(1), or a person with whom they have entered into an agreement under section 21, must not create compliance credits under section 102 during a compliance period unless all of the revenue that they receive from the transfer of compliance credits created under that section during all previous compliance periods is used within the time limit set out in subsection (3) for the purpose of carrying out, in Canada, either of the following activities:

  • (a) expanding electric vehicle charging infrastructure, including charging stations and electricity distribution infrastructure that supports electric vehicle charging, whether intended primarily for use by the occupants of a private dwelling-place or the public; or

  • (b) reducing the cost of electric vehicle ownership through financial incentives to purchase or operate an electric vehicle.

• Marginal note:Allocation to activities

  (2) The charging-network operator or person may, at their discretion, allocate the use of those revenues to either or both of those activities.

• Marginal note:Period for use

  (3) The revenues received by the charging-network operator or person, from the transfer of a compliance credit, must be used no later than the second anniversary of the end of the compliance period during which the compliance credit is transferred.

• Marginal note:Cancellation of credits

  (4) The Minister must cancel an equivalent number of compliance credits to the number of compliance credits that were transferred if the revenue from that transfer is not used in accordance with subsection (1).

• Marginal note:Insufficient number of credits

  (5) If the number of compliance credits that must be cancelled under subsection (4) is greater than the number of compliance credits in the account of the charging-network operator or person, the Minister must send a notice to them indicating the number of compliance credits that are missing.

• Marginal note:Obligation to replace credits

  (6) The charging-network operator or person must, within 90 days after the day on which the notice referred to in subsection (5) is sent, ensure that the number of compliance credits in the same account is equivalent to the number of compliance credits that are missing.

• Marginal note:Notice to Minister

  (7) The charging-network operator or person must, when their account contains the equivalent number of compliance credits required under subsection (6) and within the time limit set out in that subsection, send a notice to the Minister indicating that their account contains that equivalent number of compliance credits.

• Marginal note:Cancellation of compliance credits

  (8) On receipt of the notice referred to in subsection (7), the Minister must cancel the equivalent number of compliance credits that are indicated.

Marginal note:Hydrogen

• 104 (1) The owner or operator of a hydrogen fuelling station may, for a compliance period, create provisional compliance credits in respect of the liquid class by displacing, during the compliance period, the use in Canada of a quantity of fuel in the liquid class with the use in Canada of hydrogen, either as

  • (a) an energy source for a hydrogen fuel cell vehicle of a class that is listed in the Specifications for Fuel LCA Model CI Calculations; or

  • (b) a fuel for a vehicle, other than a hydrogen fuel cell vehicle, of a class that is listed in the Specifications for Fuel LCA Model CI Calculations.

• Marginal note:Number of compliance credits

  (2) The number of compliance credits that the owner or operator may create under subsection (1) for a compliance period by supplying hydrogen of a particular carbon intensity to vehicles is determined by the formula

  CI_diff × (Q × D) × 10^-6

  where

  CI_diff

  is the difference between the reference carbon intensity for the liquid class, as set out in item 1, column 2, of Schedule 1 and adjusted by the energy efficiency ratio of the vehicles, and the carbon intensity of the hydrogen used by those vehicles, as determined by the formula

  (R_ee × CI_ref) − CI_h

  where

  R_ee

  is

  • (a) in the case of the use referred to in paragraph (1)(a), at the election of the owner or operator, 1.5 or the energy efficiency ratio for the class of the hydrogen fuel cell vehicles, as set out in the Specifications for Fuel LCA Model CI Calculations, and

  • (b) in the case of the use referred to in paragraph (1)(b), at the election of the owner or operator, 0.9 or the energy efficiency ratio for the class of vehicles other than hydrogen fuel cell vehicles, as set out in the Specifications for Fuel LCA Model CI Calculations,

  CI_ref

  is the reference carbon intensity for the liquid class, as set out in item 1, column 2, of Schedule 1, and

  CI_h

  is the carbon intensity of the hydrogen supplied to the vehicles that is the default carbon intensity referred to in paragraph 75(1)(a), the carbon intensity determined in accordance with paragraph 75(1)(b) or subsection 75(6), the carbon intensity that is approved under subsection 85(1) or the actual carbon intensity specified in the carbon-intensity-pathway report referred to in subsection 123(1);

  Q

  is, subject to subsection 45(1), the quantity of the hydrogen of the particular carbon intensity that is produced using an eligible feedstock and supplied to the vehicles, as measured by a meter and expressed in kilograms; and

  D

  is, at the election of the owner or operator, the energy density of the hydrogen, as set out in item 4, column 2, of Schedule 2 or as set out in the Specifications for Fuel LCA Model CI Calculations.

Compliance-Credit Transfer System

General

Marginal note:Participating registered creator

• 105 (1) A registered creator who is not a registered primary supplier becomes a participant in the compliance-credit transfer system as of the first day on which they create a provisional compliance credit.

• Marginal note:Participating primary supplier

  (2) A primary supplier becomes a participant in the compliance-credit transfer system as of the day on which they register as a primary supplier under subsection 10(1).

Marginal note:Eligibility to transfer credits

• 106 (1) Only a participant may transfer a compliance credit and the transfer must be to another participant.

• Marginal note:Transfer request

  (2) A participant who wishes to transfer any compliance credits to another participant must submit a transfer request to the Minister that is signed by their authorized agent and contains the following information:

  • (a) the name, civic address and postal address of the transferor;

  • (b) the name, title, civic address, postal address, telephone number and, if any, email address of the transferor’s authorized agent;

  • (c) the name, civic address and postal address of the transferee;

  • (d) the name, title, civic address, postal address, telephone number and, if any, email address of the transferee’s authorized agent; and

  • (e) with respect to any compliance credits that are to be transferred, an indication of

    • (i) their number,

    • (ii) their specific type,

    • (iii) the year in which they were created,

    • (iv) the price, if any, to be paid to the transferor by the transferee for each compliance credit, and

    • (v) the volume and carbon intensity of the fuel used to create the compliance credits.

• Marginal note:Types of compliance credits

  (3) The specific types of compliance credits are the following:

  • (a) compliance credits in respect of the liquid class that are created under paragraph 19(1)(a)

    • (i) by carrying out a CO₂e-emission-reduction project described in paragraph 30(d) that results in the production of a co-processed low-carbon-intensity fuel that is a gasoline replacement referred to in subsection 6(1),

    • (ii) by carrying out a CO₂e-emission-reduction project described in paragraph 30(d) that results in the production of a co-processed low-carbon-intensity fuel that is a diesel replacement referred to in subsection 7(1),

    • (iii) by carrying out a CO₂e-emission-reduction project using a generic emission-reduction quantification method established under subsection 31(1), or

    • (iv) by carrying out a CO₂e-emission-reduction project described in section 30, other than one described in subparagraphs (i) to (iii);

  • (b) compliance credits in respect of the liquid class that are created under paragraph 19(1)(b)

    • (i) by importing a gasoline replacement referred to in subsection 6(1),

    • (ii) by importing a diesel replacement referred to in subsection 7(1), or

    • (iii) by importing any other liquid low-carbon-intensity fuel;

  • (c) compliance credits in respect of the liquid class that are created under paragraph 19(1)(c)

    • (i) by producing a gasoline replacement referred to in subsection 6(1),

    • (ii) by producing a diesel replacement referred to in subsection 7(1), or

    • (iii) by producing any other liquid low-carbon-intensity fuel;

  • (d) compliance credits in respect of the liquid class that are created under paragraph 19(1)(d);

  • (e) compliance credits in respect of the gaseous class that are created under paragraph 20(a) by carrying out a CO₂e-emission-reduction project described in paragraph 30(d);

  • (f) compliance credits in respect of the gaseous class that are created under paragraph 20(b) by importing a gaseous low-carbon-intensity fuel; and

  • (g) compliance credits in respect of the gaseous class that are created under paragraph 20(c) by producing a gaseous low-carbon-intensity fuel.

• Marginal note:Confirmation by transferee

  (4) The authorized agent of the transferee must sign the transfer request to confirm that the information is accurate and that the transferee accepts the transfer of the compliance credits.

• Marginal note:Transfer of credits

  (5) If the transfer request submitted to the Minister meets the requirements of subsections (2) to (4), the compliance credits described in the request must be withdrawn from the transferor’s account opened under paragraph 28(a) or (b), as the case may be, and deposited into the account of the transferee that was opened under the same paragraph.

• Marginal note:Exception — registered creator

  (6) However, a participant must not transfer any compliance credit to a registered creator who is not a primary supplier and who

  • (a) has entered into an agreement under section 21 at any time during the ongoing compliance period or the two compliance periods that ended most recently if

    • (i) the registered creator is no longer a party to that agreement, and

    • (ii) the registered creator’s registration report, as updated in accordance with section 26, does not indicate that they are carrying out any of the activities referred to in subsection 19(1) or section 20; or

  • (b) has not created compliance credits for the two compliance periods that ended most recently.