of the federal government clean fuel regulation The curbs, implemented Saturday, mean some Canadians could end up paying more for gas at the pump, experts warned.
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The rules, first promised by Prime Minister Justin Trudeau’s government in 2016 and finalized last year, are designed to reduce pollution by making the fuel cleaner in gasoline and diesel.
The rules target only gasoline and diesel refiners and importers, rather than directly affecting consumers like carbon pricing. These industries are required to either generate their own credits by reducing their own emissions or purchase credits from other sources.
Although the cost is not directly applied to consumers, companies that have to pay for the credits may pass them on indirectly.
“The clean fuel regulation went into effect on July 1 and includes gas and diesel,” Bob Laroque, president and CEO of the Canadian Fuels Association, told Global News. “And you have to reduce the carbon intensity.”
He explained that the overall life cycle of crude oil – from production, processing, transportation and use to gasoline and diesel – is referred to as carbon intensity. To clean up the fuel, regulation now requires Canadian industries to reduce intensity by 15 percent by 2030 relative to a 2016 baseline.
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“The gasoline and diesel you use in your car are called drop-ins. And that means emissions over the full lifecycle will be reduced by 15 percent, so it’s a cleaner fuel,” Laroque said.
That said, the good news for many Canadians is that, for the time being, they will not experience an immediate increase in prices at the gas pump.
But those living on the East Coast may see higher gas prices on Saturday.
That’s because, in provinces like New Brunswick and Nova Scotia, the gasoline and diesel market is regulated, Laroque said.
New Brunswick will raise prices by eight cents per liter on July 7, and Nova Scotia by 3.74 cents. Prince Edward Island and Newfoundland and Labrador are still deciding whether to raise prices immediately.
On top of the Clean Fuel Regulations coming into effect from Saturday, Federal carbon tax goes into effect on the East CoastDue to which fuel prices also increased significantly.
“So what happened in Nova Scotia, they used to have their provincial carbon system and then they decided they’re going to go to the federal carbon system and that’s starting today,” LaRocque said Saturday.
In terms of other parts of Canada such as Quebec, Ontario and the Prairies, gas prices shouldn’t be affected anytime soon, said Dan McTeague, president of Canadians for Affordable Energy.
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“I don’t think the clean fuel standard will have that much of an impact on most of Canada until 2025, at which point refineries will have to turn to the carbon credit market, which is extraordinarily expensive,” he said.
,I predict an overall increase of 60 percent for gasoline and slightly more for diesel by 2030.
Impact Analysis of Clean Fuel Regulations They would cut greenhouse gas emissions by about 18 million tonnes in 2030, according to estimates published June 28, or five to six percent of the emissions Canada would need to eliminate to meet its current targets for that year.
It would cost between $22.6 billion and $46.6 billion for refineries and other fuel suppliers to comply, or an average of $151 billion per ton of emissions reduction.
The effect would reduce Canada’s GDP by $9 billion and increase gasoline prices by between six and 13 cents per liter in 2030, when the full scope of the rules take effect.
This can cost between $76 and $174 per vehicle, or up to $301 per household.
With files from The Canadian Press
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