Canada Gazette, Part I, Volume 160, Number 44: Regulations Amending the Clean Fuel Regulations and the Environmental Violations Administrative Monetary Penalties Regulations

October 31, 2026

Statutory authorities
Canadian Environmental Protection Act, 1999
Environmental Violations Administrative Monetary Penalties Act

Sponsoring department
Department of the Environment

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

The Clean Fuel Regulations (the Regulations) are designed to deliver greenhouse gas (GHG) emission reductions through a performance-based credit market. The environmental outcomes of the Regulations depend on the availability of compliance credits in that market, more than 85% of which are currently created through the supply of low-carbon-intensity (low-CI) fuels. Recent policy measures in foreign jurisdictions have resulted in Canadian producers facing increasing competitive pressures in the Canadian market, creating a risk to domestic production and investment, and the future supply of compliance credits under the Regulations. Left unaddressed, these pressures could drive a sustained decline in Canadian low-CI fuel production. If domestic capacity declines, compliance with the Regulations would become increasingly dependent on imports for a substantive portion of low-CI fuel and their associated credit supply. Over time, this would undermine a significant compliance pathway for the Regulations, putting future emission reductions arising from the Regulations at risk and materially reducing demand for domestic agricultural feedstocks like canola.

This risk of import dependency arises at a moment when the global policy and trade landscape is rapidly changing and increasingly volatile, and supply chain disruptions are increasingly frequent. In this context, relying increasingly on imports for regulatory compliance, without developing alternative sources of supply or expanding domestic production, leaves the Canadian fuel market vulnerable to disruptions beyond Canada’s control and constitutes a significant strategic risk to the Regulations’ stability.

A significant or sustained disruption to low-CI fuel supplies could reduce access to compliance options, potentially impairing the ability of primary suppliers to achieve the required emissions reductions. This could hinder the achievement of emissions reductions and undermine the Regulations’ overarching objective of reducing GHG emissions. Such disruptions could also result in higher fuel prices, which could ultimately be passed on to Canadian fuel consumers. Any of these outcomes would undermine confidence in the predictability and credibility of the Regulations.

Background

Global warming is projected to lead to changes in average climate conditions and extreme weather events. The impacts of climate change are expected to worsen as the global average surface temperature becomes warmer. Climate change impacts are of major concern for society: changes in temperature and precipitation can impact natural habitats, agriculture and food supplies, and rising sea levels can threaten coastal communities.

GHGs are primary contributors to climate change. The largest sources of GHG emissions in Canada are from the extraction, processing and combustion of fossil fuel. A number of GHG emission reduction measures have been implemented to achieve the goal of net-zero emissions by 2050, including the Regulations.

The Clean Fuel Regulations

The Regulations^{footnote 1} require primary suppliers, defined as parties that produce gasoline or diesel in Canada or import gasoline or diesel into Canada, to reduce the life-cycle carbon intensity (CI) of the gasoline or diesel they produce or import for use in Canada. To achieve this, the Regulations establish annual life-cycle CI limits for gasoline and diesel, in grams of carbon dioxide equivalent emitted per unit of energy (expressed as grams per megajoule or gCO₂e/MJ) for primary suppliers who produce or import at least 400 cubic metres (m³) of gasoline or diesel for use in Canada in a given year. Non-fossil fuels are not subject to CI limits.

The annual life-cycle CI limits came into force on July 1, 2023. The initial limits were set at 91.5 gCO₂e/MJ for gasoline and 89.5 gCO₂e/MJ for diesel, representing a reduction of 3.5 gCO₂e/MJ from baseline values for both gasoline and diesel. The required reduction increases by 1.5 gCO₂e/MJ per year, reaching 14 gCO₂e/MJ in 2030. As a result, the 2030 CI limits are 81 gCO₂e/MJ for gasoline and 79 gCO₂e/MJ for diesel. Following 2030, the CI limits will remain at that level unless the Regulations are amended. Environment and Climate Change Canada (the Department) intends to review the Regulations and will consider, among other factors, the CI limits and opportunities for credit creation.

A primary supplier’s annual CI reduction requirement is expressed in tonnes of carbon dioxide equivalent (CO₂e) and is calculated on a company-wide basis. This requirement reflects the combined obligations associated with gasoline and diesel produced at all production facilities of a company and their total imports into Canada. The Regulations also incorporate the minimum volumetric requirements from the now repealed Renewable Fuels Regulations, requiring a minimum of 5% low-CI fuel content in gasoline and of 2% low-CI fuel content in diesel fuel.

The Regulations establish a credit market as the primary compliance mechanism. Each credit represents a life-cycle emission reduction of one tonne of CO₂e. For each compliance period, a primary supplier must create or acquire sufficient credits and use them to demonstrate compliance with its annual reduction requirements.

The Regulations provide multiple pathways for compliance, allowing primary suppliers to optimize compliance decisions and meet their obligations in a cost-effective manner. Credits may be created by primary suppliers or other voluntary credit creators through the following activities:

• Compliance Category 1 — undertaking projects that reduce the life-cycle CI of liquid fossil fuels (e.g. carbon capture and storage, renewable electricity, co-processing)
• Compliance Category 2 — supplying low-CI fuels (e.g. ethanol, biodiesel and hydrogenation-derived renewable diesel [HDRD])
• Compliance Category 3 — supplying fuel or energy to advanced vehicle technology (e.g. electricity or hydrogen in vehicles)

Provincial policies

Several provinces have established policies that drive demand for domestic low-CI fuels. In February 2025, British Columbia (B.C.) amended its Low Carbon Fuel Standard to require a minimum share of low-CI fuel content come from domestic production — requiring 8% Canadian renewable content in diesel, and 5% Canadian renewable content in gasoline.^{footnote 2} In August 2025, Ontario finalized amendments to its Ontario Regulations 663/20 (Cleaner Transportation Fuels: Renewable Content Requirements for Gasoline and Diesel Fuels), requiring a minimum share of low-CI fuel content come from domestic production.^{footnote 3} This amendment requires that, by 2030, at least 47% of the low-CI fuel content for gasoline and 75% of the low-CI fuel content for diesel must be sourced from Canadian producers.^{footnote 4} Quebec instituted a production tax credit for low-CI fuel produced and consumed in the province.^{footnote 5}

Announcement

On September 5, 2025, in response to the rapidly changing global trade landscape, the Government of Canada announced its intent to make targeted amendments to the Regulations to support Canada’s low-CI fuel sector, while maintaining the Regulations’ primary focus on lowering GHG emissions and transitioning to a low-carbon economy.^{footnote 6} On December 3, 2025, the Department published a discussion paper to invite views and information related to these targeted amendments. The deadline to submit written comments was January 15, 2026.

In addition to the intent to amend the Regulations, the Government of Canada also announced, on September 5, 2025, the introduction of Canada’s Biofuels Production Incentive, administered by Natural Resources Canada. This initiative will provide more than $372 million over two years providing non-repayable, tiered per-litre financial incentives for eligible biodiesel and HDRD produced in 2026 and 2027, with priority given to fuels made from North American feedstocks and sold into the Canadian market. The program is designed to support the stability and resiliency of domestic producers of biodiesel and HDRD and preserve the sector’s potential for growth, supporting the supply of low-CI fuels in Canada. The program is time-limited and is scheduled to conclude in 2027.

The Government also committed to working closely with provinces and territories to explore a more comprehensive approach that ensures not only a stable, but also a thriving, domestic low-carbon fuel industry now and in the future.

Canadian low-CI fuel sector

Low-CI fuels are those with a life-cycle CI that is lower than the national average reference CI for fossil liquid and gaseous fuels, as set out in the Regulations.^{footnote 7} They include liquid fuels, such as biodiesel, HDRD, ethanol, sustainable aviation fuel (SAF), and co-processed low-CI fuels, as well as gaseous fuels such as renewable natural gas, renewable propane, and hydrogen.

Although the volumetric requirements establish a baseline level of low-CI fuel use, the annual CI reduction requirements have the greatest impact on the overall demand for low-CI fuel in Canada. Over 87% of credits created to date under the Regulations come from the supply of low-CI fuels. The Regulations are agnostic regarding the origin of the low-CI fuel; however, transportation distances are accounted for in the carbon intensity of these fuels. In 2025, about 33% of credits created from the supply of low-CI fuels were from fuel produced in Canada, compared with 67% that were created from imported fuel, predominantly from the United States (U.S.). Domestic low-CI fuel production has grown in recent years, although production levels differ across fuel types. Despite this growth, domestic supply remains insufficient to meet total domestic demand, making imports a significant source of low-CI fuels in the Canadian market.

Table 1 presents the number of low-CI fuel production facilities in Canada by fuel type, along with their location, nameplate capacity and annual production in 2025. For ethanol, biodiesel, and HDRD, the production capacity reported in the table is the nameplate capacity. Nameplate capacity represents the theoretical maximum output of a facility operating continuously under optimal conditions, without accounting for downtime, maintenance, operational constraints or other inefficiencies. For co-processed low-CI fuels, the number of facilities corresponds to the number of refineries with approved co-processing projects under the Regulations. The production capacity reported for co-processed low-CI diesel and co-processed low-CI gasoline represents an estimate of the volumes that could be produced by these refineries by 2030. Note that these volumes are the biomass-derived portion of the total fuel produced at these refineries. The estimate is based on the highest co-processing rate identified in applications for project approval, credit creation reports or applications for approval of a new pathway submitted under the Regulations.

Table 1: Low-carbon intensity fuel production facilities in Canada

Fuel type	Number of facilities	Location	Production capacity (ML)	2025 annual production (ML)
Ethanol	12	Alta., Sask., Man., Ont., Que.	1 869	1 778 table a1 note a
Biodiesel and HDRD	Biodiesel: 6 HDRD: 3	B.C., Alta., Ont., Que., N.L.	Biodiesel: 650 HDRD: 2 380	1 070 table a1 note b
Co-processed low-CI diesel	6	Confidential	281	Confidential
Co-processed low-CI gasoline	4	Confidential	450	Confidential
Table a1 note(s) Table a1 note a Statistic Canada, Table 25-10-0081-01 Return to table a1 note a referrer Table a1 note b Statistic Canada, Table 25-10-0081-01 Return to table a1 note b referrer

Ethanol production in Canada has operated near full capacity in recent years, often exceeding 90% utilization rates.^{footnote 8} Despite this high utilization rate, existing Canadian production capacity is insufficient to meet domestic demand, with domestic production accounting for approximately 38% of the ethanol consumed in 2024. The remainder was supplied through imports, primarily from the United States.

Biodiesel plays an important role in supporting compliance with the Regulations by broadening fuel supply choices and enhancing the resilience and diversity of Canada’s fuel market. Until the end of 2024, a significant share of biodiesel produced in Canada was exported to the United States, where favourable market conditions were supported by the U.S. federal biodiesel blenders tax credit.

HDRD production is a nascent industry in Canada, with only three domestic production facilities in operation. Prior to the commissioning of Canada’s first HDRD facility, Tidewater Renewables’ Prince George facility in November 2023, Canada relied entirely on imports to meet domestic HDRD demand. Domestic production capacity expanded significantly since Braya Renewable Fuels’ Come By Chance HDRD facility (February 2024) and Imperial Oil’s Strathcona HDRD facility (July 2025) came online. Together, these facilities provide approximately 2 380 million litres (ML) of annual nameplate HDRD production capacity. One of these facilities was developed primarily to serve export markets.

Co-processing offers refiners a means of reducing the carbon intensity of transportation fuel by integrating renewable feedstocks into existing refinery operations. It involves processing low-carbon feedstocks alongside conventional crude oil feedstocks to produce lower-carbon gasoline and diesel and is considered to be an emerging technology. Currently, co-processing projects at six refineries have been approved for credit creation under the Regulations, with an estimated production capacity collectively of 281 ML for low-CI co-processed diesel and 449 ML for low-CI co-processed gasoline in 2030. Although co-processed fuel accounted for only a small portion of the total credits created in 2025, the approval of additional projects and increasing utilization of existing facilities are expected to support growth in production and credit creation over the coming years.

Policy landscape

External market conditions play an important role in shaping Canada’s low-CI fuel sector, particularly developments in the United States, which is the world’s largest producer and exporter of low-CI fuels.^{footnote 9} U.S. production is supported by a combination of federal and state renewable fuel requirements, low-carbon-fuel programs, and financial incentives.

As of January 2025, the United States implemented the Section 45Z Clean Fuel Production Credit, established under the Inflation Reduction Act of 2022, replacing the blenders tax credit. The 45Z credit provides support for transportation fuels produced in the United States based on their life-cycle carbon intensity creating stronger incentives for the production of fuels with lower emissions profiles.^{footnote 10,footnote 11} As of January 1, 2025, the maximum incentive was about US$1.75 per gallon for sustainable aviation fuel and US$1.00 per gallon for non-aviation transportation fuels, depending on the fuel’s type and carbon intensity. Due to their carbon intensity being over the eligibility threshold, most ethanol facilities were not eligible to receive the incentive. In July 2025, the One Big Beautiful Bill Act extended the Section 45Z Clean Fuel Production Credit through 2029, removed the Indirect Land Use Change penalties to lower CI values, added eligibility requirements for fuels to be produced using North American sourced feedstocks, and reduced the maximum incentive for sustainable aviation fuel.^{footnote 12} As of January 1, 2026, the incentive is available to low-CI fuels produced in the United States from North America feedstock and to most ethanol facilities in the United States. Furthermore, sustainable aviation fuel and non-aviation transportation fuel now have the same maximum incentive of US$1.00 per gallon starting in 2026.

Unlike the blenders tax credit, which was available regardless of fuel origin when blended in the United States, the Section 45Z Clean Fuel Production Credit is available only for qualifying fuels produced in the United States. Because of this, it strengthens the competitive position of U.S.-produced low-CI fuel relative to comparable fuel produced in Canada, for the Canadian market. Assuming input costs and production efficiency are equal in both countries, the 45Z Clean Fuel Production Credit enables U.S. low-CI fuel producers to offer their fuel at a lower price than Canadian producers.

As a result, without complementary measures implemented in Canada, the introduction of the Section 45Z Clean Fuel Production Credit is expected to influence the competitive landscape for low-CI fuel in North America. While Canada’s ethanol production has been stable in recent years, the sector may face competitiveness challenges in the near term, as the effective cost of imported U.S. ethanol decreases. The Canadian biodiesel and HDRD sectors have already experienced reduced competitiveness, where some Canadian export-oriented biodiesel and HDRD facilities have faced operational challenges and temporary shutdowns since the implementation of the Section 45Z Clean Fuel Production Credit January 1, 2025.

The biodiesel and HDRD sectors have recently benefited from provincial regulatory measures in Ontario and British Columbia requiring the use of Canadian-produced low-CI fuel; with four out of the six biodiesel facilities able to continue or resume operations in 2025. Canada’s Biofuels Production Incentive, providing up to $372 million in production-based support for domestic producers of biodiesel and renewable diesel, is also expected to improve the economic viability of domestic biodiesel and HDRD production, helping to maintain production levels, support continued operation of existing facilities, and preserve domestic supply in 2026 and 2027.

Objective

The objective of the proposed Amendments is to support the Canadian low-CI fuel sector while maintaining the Regulations’ primary objective of reducing GHG emissions and supporting Canada’s transition to a lower-carbon economy. A strong and healthy domestic low-CI fuel sector is an important contributor to Canada’s long-term decarbonization objectives and provides a key compliance pathway for the Regulations, supporting GHG emission reductions now and into the future.

The proposed Amendments also aim to provide increased compliance flexibility to regulated parties and support the long-term stability and resilience of the credit market. Lastly, the proposed Amendments aim to improve credit market efficiency, support more transparent pricing of credits, and reduce regulatory burden.

Description

The proposed Amendments would introduce a credit multiplier for the portion of liquid low-CI fuel and co-processed low-CI fuels (hereafter, collectively referred to as low-CI fuels) produced in Canada that are derived from a feedstock that was harvested, produced, extracted, or collected and processed in North America as well as for hydrogen, liquefied and compressed renewable natural gas, renewable propane, and co-processed renewable propane produced in Canada that is used as a fuel or energy source in a vehicle. In addition, the proposed Amendments would reserve 50% of the 10% limit on the use of gaseous compliance credits for the production in Canada of biogas, renewable natural gas, hydrogen, renewable propane and co-processed low-CI propane. The proposed Amendments would also increase the limit for the use of compliance credits created from contributions to registered emission reduction funding programs from 10% to 15%. Other minor administrative modifications are also proposed.

Credit multiplier

The proposed Amendments would introduce a credit multiplier for eligible low-CI fuels produced in Canada on or after January 1, 2026. For liquid low-CI fuels, the multiplier would apply only to the portion of fuel that is derived from feedstocks that were harvested, produced, extracted, or collected and processed in North America. The multiplier would also apply to eligible hydrogen, liquefied and compressed renewable natural gas, renewable propane, and co-processed low-CI propane produced in Canada and used as a fuel or energy source in a vehicle. The requirements to use North American feedstock would not apply to gaseous fuels, as their feedstocks are intrinsically local (e.g. wastewater and landfill gas). The multiplier would also vary by low-CI fuel type. To facilitate participation in the credit market, the proposed Amendments would include an exemption to the requirement to use North American feedstock for low-CI fuels produced in Newfoundland and Labrador.

A credit multiplier increases the number of credits created per unit of eligible low-CI fuel, thereby increasing its compliance value under the Regulations. As a result, a given quantity of domestically produced low-CI fuel would create more credits than an equivalent quantity of imported low-CI fuel of equal carbon intensity.

These additional credits may be sold on the credit market and used by primary suppliers to satisfy their carbon intensity reduction requirements; however, the additional credits created through the multiplier may not be used to satisfy the volumetric requirements.

Table 2 presents the proposed values of the multipliers by fuel type. The proposed multiplier values were developed taking into account a range of factors, including production costs, CI values, the estimated value of the U.S. Section 45Z Clean Fuel Production Credit, exchange rate assumptions, and projected feedstock and energy costs. Separate multipliers are proposed for the diesel pool and the gasoline pool to reflect differences in production costs, CI values, market conditions and competitive pressures from foreign jurisdictions.

Table 2: Proposed credit multipliers by low-CI fuel type

Fuel type	Proposed credit multiplier
SAF	1.8
HDRD	1.5
Biodiesel, co-processed low-CI diesel, and co-processed SAF	1.4
Hydrogen, renewable natural gas, compressed and liquefied renewable natural gas, and renewable propane used as a fuel or energy in a vehicle	1.4
Ethanol, co-processed low-CI gasoline, and other liquid low-CI fuels specified in paragraph 19(1)(c) of the Regulations	1.3
Co-processed renewable propane used as a fuel in a vehicle	1.3

Credits from the production of biogas, renewable natural gas, renewable propane, hydrogen, or co-processed gaseous fuels

Under the Regulations, primary suppliers can use credits created for the production or importation of certain low-CI gaseous fuels to satisfy up to 10% of their total reduction requirement. The proposed Amendments would reserve a minimum of 50% of the limit for the use of credits created for the production in Canada of biogas, renewable natural gas, renewable propane, or hydrogen. The remaining portion of the 10% limit could include credits created from the importation of these gaseous fuels.

Emission-reduction funding programs

The proposed Amendments would increase the annual limit for the use of credits created from contributions to registered emission-reduction funding programs from 10% to 15% of a primary supplier’s total reduction requirement.

The Regulations require all contributions made to a program to be used to fund projects that support the deployment or commercialization of technologies or processes that reduce CO₂e emissions within five years from the date of contribution. To better align with the deployment lead time of larger-scale emission-reduction projects, the proposed Amendments would extend this period from five to seven years. The proposed Amendments would also remove certain reporting requirements for registered emission-reduction funding programs in circumstances where no contributions have yet been received or where contributions have been received but not yet attributed to projects, thereby reducing administrative burden for funding program administrators.

Credit market transparency

More than half of credit transfers under the Regulations have a reported credit price of zero dollars, which limits visibility into credit market activity and price formation. The proposed Amendments would require additional information to be reported for certain credit transfer transactions. Where the credits are transferred as part of a bundled transaction with low-CI fuels and the reported credit price is zero dollars or below fair market value, the total transaction price would be required to be reported. In all other cases where the transfer price is reported at zero dollars or below fair market value, the transferor would be required to provide an explanation of why the price is zero or below fair market value. These modifications would improve visibility into the economic value of credit transactions, support more transparent market information, and facilitate the monitoring and analysis of compliance credit market activity.

Reducing regulatory and administrative burden

To reduce regulatory and administrative burden and provide greater certainty for low-CI fuel producers, the proposed Amendments would increase the thresholds associated with invalidating approved CI values. Currently, an approved CI value is invalidated if the actual CI reported in the annual carbon-intensity-pathway report exceeds the applicable regulatory threshold, requiring the low-CI fuel producer to submit a new application for a carbon intensity value. The proposed Amendments would double this threshold, reducing the likelihood that routine variations between approved and reported CI values would trigger the invalidation of an approved CI value and the need to submit a new application. Similarly, the proposed Amendments would also double the thresholds that determine when fuel producers may submit revised CI applications when the actual CI reported in the annual carbon-intensity-pathway report is lower than the previously approved CI.

The proposed Amendments would further reduce administrative burden by streamlining certain reporting, record-keeping, and verification requirements. Third-party verification would no longer be required for CI applications that rely on the same information previously verified as part of a submitted carbon-intensity-pathway report, which would eliminate duplicative verification activities. In addition, nil compliance reports would no longer require third-party verification. These changes would reduce administrative costs for regulated parties while maintaining the integrity of the compliance and verification framework.

Administrative amendments

Other administrative amendments would also be undertaken to fix typographical errors, improve the clarity and consistency of the regulatory text, and align the English and French versions of the Regulations. The proposed Amendments would also improve the clarity and accuracy of the Regulations by updating certain definitions, including “charging site host” and “gasoline”. References to external standards would be updated or removed, as appropriate, to reflect standards that have been revised or are no longer maintained since the publication of the Regulations in 2022.

Consequential amendments

Consequential amendments to the Environmental Violations Administrative Monetary Penalties Regulations would be made as a result of the proposed Amendments. This would enable enforcement officers to issue an administrative monetary penalty for certain violations under the Regulations.

Regulatory development

Consultation

Following the Prime Minister’s September 5, 2025, announcement, the Department published a discussion paper on December 3, 2025, to seek input from stakeholders, Indigenous partners, and provinces and territories on potential targeted amendments to the Regulations. The discussion paper outlined two example approaches that could be taken to support Canada’s low-CI fuel sector and sought feedback on a number of technical and implementation questions related to the options. In addition to the written consultation process, the Department engaged in bilateral discussions with stakeholders, key industry associations, and provincial and territorial governments to obtain further feedback on the proposed approaches.

The consultation period closed on January 15, 2026, and the Department received 124 comments from a wide range of interested parties, including primary suppliers (refiners and importers), low-CI fuel producers and importers, agricultural and feedstock providers, gaseous fuel producers and importers, provinces and territories, foreign stakeholders, industry organizations, and Indigenous partners. Stakeholder feedback informed the development of the proposed Amendments and helped refine the design of the proposed credit multipliers and changes to the registered emission-reduction funding program provisions.

Summary of feedback received

Stakeholders expressed a broad range of views on how best to support the Canadian low-CI fuel sector. No clear consensus emerged regarding the preferred policy approach. Stakeholders generally supported one of the following three approaches: a credit multiplier for eligible domestically produced low-CI fuels; a domestic content requirement for low-CI fuel; or a combination of the two. Some stakeholders favoured maintaining the status quo or providing direct financial support such as production tax incentives or an expanded Biofuels Production Incentive.

Feedback was generally concentrated around the following five themes: (1) support for domestic low-CI fuel production; (2) compliance flexibility and credit market stability; (3) treatment of gaseous fuels; (4) feedstock eligibility; and (5) the design and value of the proposed credit multipliers.

Support for domestic low-CI fuel production

Low-CI fuel producers, feedstock suppliers, and several industry associations emphasized the importance of supporting domestic low-CI fuel production and investment, some recommending that the amendments come into force no later than June 30, 2027, while others stated that timely implementation is critical. Many domestic stakeholders noted that recent changes in North American market conditions have affected investment decisions and long-term project economics. These stakeholders generally supported a combination of a credit multiplier and additional measures designed to support domestic production. Some stakeholders expressed concerns that a credit multiplier could result in an oversupply of credits, potentially placing downward pressure on credit prices and reducing investment signals. Foreign low-CI fuel suppliers generally opposed measures that would provide preferential treatment to domestically produced fuels and indicated a preference for maintaining the status quo; however, some expressed less concern regarding the credit multiplier approach than a domestic content requirement.

Primary suppliers generally supported a credit multiplier as a market-based approach and were generally opposed to a domestic content requirement. These stakeholders indicated that compliance flexibility and access to a diverse range of low-CI fuels are important to maintaining cost-effective compliance.

The proposed Amendments address these views by introducing a credit multiplier for eligible domestically produced low-CI fuels. The Department is of the view that a credit multiplier preserves the key principles of market-based compliance by allowing primary suppliers to continue meeting their obligations through the lowest-cost combination of compliance pathways. The credit multiplier would also increase the supply of credits created under the Regulations, supporting market liquidity while increasing the compliance value of eligible domestically produced low-CI fuels. Compared with a domestic content requirement, a credit multiplier would preserve flexibility for regulated parties and is less likely to create regional disparities as it does not require domestic sourcing or introduce additional risks of non-compliance in regions where domestic low-CI fuel supply may be limited. This approach would maintain market-based compliance while supporting domestic low-CI fuel production.

The Department is also of the view that a credit multiplier is the option that can be implemented most rapidly to support domestic low-CI fuel production. While some stakeholders expressed concerns that the multiplier could result in an oversupply of credits and place downward pressure on credit prices, others cautioned that insufficient credits could be available to support compliance as early as 2026, especially given the increasing stringency each year. The proposed multiplier levels are intended to strike an appropriate balance between supporting domestic production and maintaining a well-functioning credit market.

Compliance flexibility and credit market stability

Many stakeholders, particularly primary suppliers, emphasized the importance of maintaining compliance flexibility and ensuring sufficient credit availability under the Regulations. Stakeholders generally supported measures that would expand the range of available compliance options, including increasing the limit on the use of credits created through contributions to registered emission-reduction funding programs. Several stakeholders also recommended allowing emission-reduction projects to create credits for reductions associated with exported volumes of fossil fuels or crude oil.

In response to stakeholder feedback regarding compliance flexibility, the proposed Amendments would increase the limit for registered emission-reduction funding program contributions from 10% to 15%. This change is intended to maintain a diverse range of compliance options available to regulated parties and support the long-term stability and resilience of the compliance credit market.

The Department also considered stakeholder recommendations regarding credit creation associated with exported volumes; however, the Department maintains the policy objective of reducing the carbon intensity of fuels used in Canada. Consistent with the existing treatment of exported low-CI fuels, emission-reduction projects would continue to be ineligible to create credits for reductions associated with exported fossil fuel or crude oil volumes, and no amendments are proposed in this area.

Gaseous fuel compliance pathways

Gaseous fuel producers and their industry associations generally supported the introduction of a credit multiplier for domestically produced gaseous low-CI fuels. Stakeholders emphasized the importance of maintaining gaseous fuels as a viable compliance pathway under the Regulations and some recommended increasing the current 10% limit to at least 20%, while others proposed that any increase to the limit be restricted to credits created from domestically produced gaseous low-CI fuel.

The Department considered these views in developing the proposed Amendments. While stakeholders requested that the existing 10% limit be increased, the Department is proposing to maintain the current limit in order to preserve a balanced mix of compliance pathways under the Regulations. At the same time, the proposed Amendments would reserve 50% of the limit on use of gaseous-class credits for credits generated from Canadian production, helping to ensure that domestically produced gaseous low-CI fuel remains a viable compliance pathway. The proposed Amendments would also introduce a credit multiplier for eligible gaseous low-CI fuel used in transportation that creates credits in the liquid class. This measure would increase the compliance value of these fuels, support Canadian producers, and encourage their use in transportation applications that contribute directly to the Regulations’ objective of reducing GHG emissions from transportation fuel. Together, these measures are intended to support domestic production while maintaining the integrity and effective functioning of the credit market.

Feedstock eligibility

Stakeholders expressed differing views regarding feedstock eligibility. Several feedstock producers, particularly agricultural stakeholders, supported measures that would provide additional incentives for low-CI fuels produced from domestic or North American feedstocks. These stakeholders indicated that such measures could support domestic agricultural supply chains and encourage greater use of Canadian-produced feedstocks. Some feedstock producers expressed support for a domestic-content requirement and called for enhanced oversight of imported feedstocks, including restrictions on foreign used cooking oil, citing concerns regarding traceability and the potential risk of fraud.

Other stakeholders expressed concerns that feedstock restrictions or domestic-content requirements could reduce compliance flexibility, increase costs, or limit access to low-CI fuel.

The proposed Amendments provide support for eligible domestically produced low-CI fuel derived from qualifying North American feedstocks, while maintaining access for primary suppliers to a broad range of low-CI fuel pathways. This approach is intended to recognize the integrated nature of North American agricultural and fuel supply chains and the importance of preserving access to a broad range of feedstock sources to further support the continued operation and competitiveness of Canadian low-CI fuel production facilities.

The proposed Amendments would also introduce a credit multiplier for eligible gaseous low-CI fuels used in transportation that create credits in the liquid class. Given that the feedstocks used to produce gaseous low-CI fuels or hydrogen are intrinsically local, the Department proposes to not require the credit creators to determine and demonstrate feedstock origin, thereby reducing the administrative burden and costs.

In response to stakeholder concerns regarding the traceability and verification of foreign used cooking oil, the Department has initiated a review of domestic and international feedstock verification and certification frameworks. This work will assess global best practices related to feedstock traceability, chain-of-custody systems, fraud prevention measures, and risks to the integrity of the Regulations’ credit market. The findings will inform the Department’s ongoing assessment of potential approaches to strengthen feedstock oversight and compliance under the Regulations. The review is expected to conclude in fall 2026, and will be considered as part of the planned comprehensive regulatory review of the Regulations.

Design and value of the credit multipliers

Stakeholders expressed a range of views regarding the design of the proposed multiplier. Some stakeholders recommended a single multiplier applicable to all fuel types, while others supported fuel-specific multipliers reflecting differences in production costs, carbon intensity performance, and market conditions. Of the stakeholders that provided recommendations on multiplier values, suggested values varied significantly by fuel type.

The proposed fuel-specific multipliers are intended to provide a balanced and targeted incentive that reflects the diversity of low-CI fuel pathways and takes into consideration a range of factors, such as production costs, CI values, the estimated value of the United States’ Section 45Z Clean Fuel Production Credit, exchange rate assumptions and projected feedstock and energy costs. By aligning incentives more closely with these factors for each fuel type, the proposed approach would support domestic production and investment while maintaining the integrity and effectiveness of the Regulations.

The proposed multiplier values fall within the range of values suggested by stakeholders who provided feedback.

Several stakeholders, including provinces and territories, highlighted the importance of SAF and recommended additional support for domestic SAF production. Stakeholders noted the role that SAF is expected to play in reducing emissions from the aviation sector and the challenges associated with its higher production costs and limited supply.

The proposed Amendments respond to these views by including a dedicated multiplier for SAF. The proposed multiplier is intended to recognize the distinct characteristics of SAF relative to other low-CI fuels and support its role as a compliance pathway under the Regulations.

Table 3 below summarizes the multiplier values recommended by stakeholders by fuel type.

Table 3: Multiplier values recommended by stakeholders

Value	Ethanol	Co-processed gasoline	Biodiesel	HDRD	Co-processed diesel	SAF	Renewable natural gas
Minimum	1.05	1.0	1.24	1.24	1.0	1.23	1.6
Average	1.26	1.28	1.38	1.42	1.29	1.83	1.6
Maximum	1.4	1.4	1.67	2.0	1.4	2.5	1.6

Indigenous engagement, consultation and modern treaty obligations

As required by the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an assessment of modern treaty implications was conducted on the proposed Amendments. The assessment examined the geographic scope and subject matter of the proposed Amendments in relation to modern treaties in effect. The assessment did not identify any modern treaty implications or obligations, since the proposal is outside of the subject matter scope covered in modern treaties.

The United Nations Declaration on the Rights of Indigenous Peoples (UN Declaration) is an international human rights instrument that sets out minimum standards for the survival, dignity and well-being of Indigenous peoples. Through the United Nations Declaration on the Rights of Indigenous Peoples Act (UN Declaration Act), the Government of Canada is committed to taking effective measures, including legislative and policy measures, in consultation and cooperation with Indigenous peoples, to advance implementation of the UN Declaration. No negative intersections between the proposal and the UN Declaration were identified. The proposed Amendments could contribute to the implementation of the UN Declaration by potentially resulting in positive economic implications for some Indigenous peoples working in the clean fuel sector.

Engagement with Indigenous peoples

A notice was sent to three national Indigenous organizations, one Indigenous nation, and four non-right-holding Indigenous groups on the publication of the discussion paper dated December 3, 2025, for the proposed Amendments and parties were provided an opportunity to submit written comments. These groups were contacted based on previous engagement with the Department on the clean fuels value chain, interests identified during the development of the Regulations and throughout its implementation to date. Additionally, the Indigenous peoples and organizations noted above were invited to participate in an information session on the discussion paper in December 2025.

One national Indigenous organization responded and submitted comments. Their comments largely focused on the overall implementation of the Regulations while highlighting the importance of ongoing engagement, supporting domestic production while maintaining credit market stability, ensuring balanced incentives, strengthening feedstock integrity, and enabling their economic participation across the clean fuel sector. The organization indicated that their citizens participate across various sectors that underpin the clean fuels value chain, including agriculture, transportation, construction, and energy development. As a result, policies shaping Canada’s clean fuel sector may have positive economic implications for their workers, agricultural producers, and businesses operating within these industries. In response to this comment, the Department will maintain ongoing dialogue with the national Indigenous organization, share information early and explore opportunities to support their participation in the clean fuel sector.

The Department will continue to engage and offer opportunities for discussion and dialogue with Indigenous organizations as appropriate as the regulatory proposal advances, and will remain responsive should Indigenous groups identify concerns, interests, or opportunities related to the proposed Amendments. In accordance with section 5.1 of the Inuit Nunangat Policy, Inuit Treaty Organizations were included in the distribution list and invited to provide comments on this proposal.

Instrument choice

The primary objective of the Regulations is to reduce GHG emissions from liquid fossil fuels used in Canada and contribute to the transition to a lower-carbon economy. A resilient domestic low-CI fuel sector contributes to this objective by providing an important source of compliance credits and low-CI fuels under the Regulations. To address challenges facing the sector and support the ongoing effectiveness of the Regulations and the continued availability of low-CI fuel compliance pathways, the Department considered several policy approaches. These approaches include the imposition of a domestic content requirement for domestically produced low-CI fuels, a credit multiplier incentive for domestically produced low-CI fuels, a combination of both domestic content requirement and credit multiplier and maintaining the status quo.

Status quo

Maintaining the status quo was determined to be insufficient to address the risks and identified issues facing the Canadian low-CI fuel industry. While direct financial support is currently available to the sector with the Biofuels Production Incentive administered by Natural Resources Canada, the program is time limited (2026–2027) and does not provide a long-term market signal beyond its duration. Analysis shows that the program alone would be unlikely to fully address the impacts of evolving North American market conditions on the low-CI fuel sector.

Minimum domestic content approach

This approach would require a portion of the volumetric requirements to be satisfied by the use of credits from domestically produced low-CI fuels. This would provide a demand signal for domestic low-CI fuel production by guaranteeing a portion of the compliance market for Canadian producers. Similar approaches are being implemented in British Columbia and Ontario. However, a federal domestic content requirement for low-CI fuel would be a greater departure from the carbon intensity performance-based and market-driven design principles of the Regulations. By restricting compliance choices that allow primary suppliers to optimize compliance decisions at the lowest cost, it could reduce compliance flexibility and create regional disparities for primary suppliers operating in jurisdictions with limited domestic low-CI fuel production capacity. A domestic content requirement could also affect the operation of the credit market by limiting access to lower-cost compliance options and reducing the pool of available low-CI fuel that creates compliance credits. These effects could place upward pressure on credit prices and increase overall compliance costs for regulated parties. The approach could also increase exposure to domestic supply disruptions and may require a longer implementation period to allow existing fuel supply contracts to be adjusted.

Credit multiplier approach

A credit multiplier increases the number of credits created per unit of eligible low-CI fuel, resulting in more credits being created for domestically produced low-CI fuel than an equivalent quantity of imported low-CI fuel of equal carbon intensity, improving the relative competitiveness of Canadian producers supplying the credit market.

The credit multiplier approach also preserves the key principles of market-based compliance, increases credit supply that supports market liquidity, and allows primary suppliers to retain flexibility to meet their obligations through the lowest-cost combination of compliance pathways. A credit multiplier can also come into force more quickly than a domestic content requirement, with less disruption to existing long-term fuel supply contracts; however, with a credit multiplier, the environmental performance of the fuel would remain unchanged and, if not carefully designed, a credit multiplier has the potential to create an oversupply of credits that could lead to depressed credit prices and reduce investment signals in some compliance pathways. Careful calibration of the multiplier is therefore required to maintain market stability and support continued emissions reductions.

Hybrid approach

A hybrid approach combining a credit multiplier and a domestic content requirement was also considered. While this approach could provide both a guaranteed market share for domestic production and additional incentives for investment, analysis indicated that it would provide limited incremental benefits relative to a credit multiplier alone. The approach would also have the compliance and cost challenges associated with a domestic content requirement. Furthermore, this approach would result in a higher administrative burden on regulated parties and would greatly increase the complexity of the Regulations for implementation and compliance.

Proposed approach

The Department has determined that a credit multiplier for low-CI liquid fuel produced in Canada and gaseous low-CI fuels produced in Canada and used as a fuel or energy source in vehicles is the preferred approach. Relative to the alternatives considered, the credit multiplier best supports domestic low-CI fuel production while preserving the market-based design of the Regulations and maintaining flexibility for regulated parties. The approach can be implemented more quickly than a domestic content requirement, minimizes disruption to existing fuel supply arrangements, and is expected to achieve the policy objective at lower cost and with fewer compliance risks. A credit multiplier would also complement the British Columbia and Ontario domestic content requirements, and the federal Biofuels Production Incentive. Together, these measures are expected to provide a stronger and more durable signal for domestic low-CI fuel investment and production while maintaining a national market-based compliance framework under the Regulations. The multiplier would be designed to support domestic low-CI fuel production while maintaining credit market stability and preserving incentives for emission reductions.

In addition, a requirement to use North American feedstocks was proposed to support domestic low-CI fuel production while maintaining access to a sufficiently large and diverse feedstock supply. Restricting eligibility to fuel derived solely from Canadian feedstocks could constrain feedstock availability, increase production costs, and limit the ability of Canadian producers to respond to changing market conditions. The North American approach recognizes the integrated nature of regional agricultural and fuel supply chains while supporting the continued operation and competitiveness of Canadian low-CI fuel production facilities.

Regulatory analysis

For the period from 2026 to 2035, the costs of the proposed Amendments are estimated at $8.3 billion and the benefits at $9.1 billion, resulting in a net benefit of $0.9 billion. The costs represent the forgone GHG emission reductions and the benefits represent the avoided costs of industry purchasing credits. While the proposal is expected to result in fewer incremental emission reductions relative to the baseline, it is intended to support the long-term effectiveness of the Regulations by maintaining domestic low-CI fuel production as a reliable supply of compliance credits, thereby reducing the risk of future emission reductions being undermined by increased dependence on imported fuels and credits.

Analytical framework

The analysis compares the expected impacts of the proposed Amendments against a scenario in which the proposed Amendments are not implemented. This section sets out the data sources, modelling conventions, and parameters used throughout the analysis to estimate the impact of the proposed Amendments.

The analysis draws on three principal sources. Domestic demand for gasoline, diesel, ethanol, and biomass-based diesel (HDRD and biodiesel) is taken from the Department’s 2025 reference case.^{footnote 13} Provincial low-CI fuel requirements are used to establish the minimum domestic low-CI fuel volumes required and incentivized. In addition, domestic production and capacity figures are drawn from Statistics Canada and from facility-level information compiled by the Department from the different reports submitted under the Regulations. This information is the basis on which credit estimation was developed (see the “Baseline scenario” section).

All monetary values are expressed in 2024 Canadian dollars, inflated using the consumer price index.^{footnote 14}GHG effects are converted to tonnes of CO₂e and the value of these changes is calculated using the Department’s social cost of greenhouse gas^{footnote 15} (SC-GHG) emissions method. To estimate the impact of the proposed Amendments, the analysis quantifies two main categories of expected incremental impacts: more credits arising from the production of liquid low-CI fuels in Canada (i.e. ethanol, co-processed low-CI gasoline, biodiesel, HDRD and co-processed low-CI diesel), and forgone GHG emission reductions.

In addition to the credit multiplier, the proposed Amendments would increase the limit on contributions to a registered emission-reduction funding program (the compliance-fund mechanism). This increase would provide greater compliance flexibility for primary suppliers. Its effects are not quantified in this analysis. Primary suppliers would be assumed to pursue lower-cost pathways before contributing to the fund in many cases, so raising the limit is not expected to result in a significant near-term change in crediting acquisition strategy. Consistent with this, the compliance-fund price is used in the analysis only as the value of the marginal credit, not as a pathway that primary suppliers are assumed to use at scale.

A higher credit multiplier applicable to SAF has likewise not been quantitatively assessed, as the credit multiplier applies to domestic production and SAF is not currently produced domestically. While a multiplier may provide an incentive to establish such production, the most likely near-term source of domestic SAF is the conversion of existing HDRD facilities or the co-processed SAF. Production from those facilities is already accounted for in the analysis. Although a new, purpose-built facility is possible, the nascent state of this fuel makes the scale and timing of its deployment uncertain, and it has therefore not been assessed.

The credit multiplier applicable to eligible gaseous low-CI fuels used in transportation has likewise not been quantitatively assessed. In 2025, the associated number of credits created in respect of this category was very low, at 364 credits out of 12.6 million total credits generated. While this multiplier would encourage the use of domestic low-CI gaseous fuels in transportation, the number of additional credits would continue to be very low compared to the additional credits created with the multiplier applicable to liquid low-CI fuels.

Present values are discounted at the Department’s standard rate of 2%, with 2026 as the base year and prices expressed in 2024 dollars. The analysis covers a 10-year period from 2026 to 2035.^{footnote 16}

Baseline scenario

The baseline scenario describes the creation of credits from liquid low-CI fuels that would be expected in the absence of the proposed Amendments. In this scenario, total demand for low-CI fuel is taken from the 2025 departmental reference case,^{footnote 13} however, the reference case does not distinguish between the volume of low-CI fuel that is produced domestically and the volume that is imported. The historical volume of low-CI fuel produced domestically reflects dynamic variables that have changed significantly since early 2025. Therefore, historical production is not considered a reliable indicator of future production volumes.

In the baseline, domestic low-CI fuel production is assumed to be limited to the volume that provincial requirements and incentives draw into the market. The reasoning rests on the competitiveness pressures, principally the Section 45Z Clean Fuel Production Credit for biodiesel and HDRD exported to Canada, and the more recent extension of the credit to ethanol exported to Canada, due to the removal of the indirect land use change penalties to lower CI values. This policy is strong enough to have affected production facilities in Canada. Although the Section 45Z Clean Fuel Production Credit is scheduled to expire at the end of 2029, the baseline and regulatory scenarios assume the continuation of U.S. federal support for low-carbon fuel production. This assumption reflects the long-standing pattern of support for the sector in the United States through successive policy instruments, including biodiesel tax credits that were first enacted in 2004 and continued through 2024.

Under this condition, it is assumed that low-CI fuel imported from the United States would displace Canadian low-CI fuel wherever the two compete on price alone, as the Regulations currently do not distinguish between the two. The domestic production that remains viable in the baseline is therefore the production that provincial measures protect or support (i.e. the volumes that must be produced in Canada to satisfy the British Columbia and Ontario domestic content mandates and the production in Quebec sustained by its low-CI fuel production tax credit). Domestic production that is not underpinned by a provincial requirement or incentive is assumed to be displaced by imports.

On this basis, the baseline production estimate is set equal to the provincial-driven volumes, seen in Table 4 below. The gasoline demand in the reference case declines over time as the adoption of electric vehicles increases. The demand for diesel in the reference case is stable over time.

Table 4: Domestic production of low-CI fuels in the baseline in select years

Fuel	Baseline domestic production in 2026 (ML)	Baseline domestic production in 2030 (ML)	Baseline domestic production in 2035 (ML)
Ethanol and co-processed low-CI gasoline	1 478	1 371	1 105
Biodiesel, HDRD and co-processed low-CI diesel	628	649	667

Regulatory scenario

The regulatory scenario reflects the introduction of the multiplier on credits created from domestically produced liquid low-CI fuels produced exclusively from North American sourced feedstocks. It is assumed that the credit multiplier improves the relative economics of domestically produced low-CI fuel to offset the price advantage of imported fuel. In response, the production mix is assumed to shift towards domestically produced fuel, to the extent permitted by domestic production capacity. The total volume of low-CI fuel supplied to each pool of gasoline and diesel is assumed to remain unchanged relative to the baseline, only the ratio of domestic to imported fuel shifts. Under this assumption, the multiplier does not change the energy demand of low-CI fuels consumed in Canada; it only changes the number of credits created per unit of qualifying domestically produced fuel. Under the regulatory scenario, qualifying domestic low-CI fuel would create more credits than in the baseline. Table 5 shows the estimated annual production of low-CI fuels in the regulatory scenario.

Table 5: Domestic production of low-CI fuels in the regulatory scenario in select years
Note: The estimated annual production is lower than the production capacity shown in Table 1 to take into account operating and market conditions such as shut down periods and lower production level of some low-CI fuels during winter.

Fuel	Regulatory scenario — domestic production in 2026 (ML)	Regulatory scenario — domestic production in 2030 (ML)	Regulatory scenario — domestic production in 2035 (ML)
Ethanol	1 618	1 636	1 636
Co-processed low-CI gasoline	64	449	450
Biodiesel	402	488	488
Co-processed low-CI diesel	76	281	281
HDRD	879	1 344	1 344

As shown above, domestic production of ethanol and co-processed gasoline in 2030 is estimated to be 1 636 ML and 449 ML, respectively. Combined production of these two fuels represents about 41% of the expected low-CI fuel demand for gasoline in 2030. Production of biodiesel, HDRD, and co-processed low-CI diesel in 2030 is estimated to be 488 ML, 1 344 ML, and 281 ML, respectively. Combined production of these three fuel types represents about 68% of the expected low-CI fuel demand for diesel in 2030.

The additional credits attributable to the proposed Amendments are calculated from the difference between the credits created on domestic production in the regulatory scenario, which accounts for the multiplier, and the credits created on the same volumes that would have been partially produced in Canada and partially imported into Canada in the baseline scenario, in the absence of the multiplier in accordance with the following formula:^{footnote 17,footnote 20}

Additional credits = (Credit multiplier – 1) × (CI_Reference – CI_{low-CI fuel}) × Energy_{low-CI fuel} × 10^-6

Where

Energy_{low-CI fuel} = Volume_{low-CI fuel} × Volumetric Energy Density_{low-CI fuel}

 

Table 6 shows the CI values used in the calculation of the additional credits.^{footnote 18}

Table 6: Life-cycle carbon intensities for low-CI fuels

Fuel	Life-cycle carbon intensity (gCO2e/MJ)
Ethanol	39
Co-processed low-CI gasoline	22
Biodiesel	19
Co-processed low-CI diesel	22
HDRD	22

As noted in the baseline scenario, it is assumed that the overall credit obligation continues to be met by existing crediting pathways. Credits arising from the multiplier therefore have a crowding-out effect, displacing the most expensive crediting pathway. For the purpose of the analysis, this pathway is represented by the marginal credit, valued at the cost to create a credit for a contribution to an emissions-reduction funding program. Displaced marginal credits are assumed to lead to forgone emission reductions.

Table 7 shows the total number of additional credits estimated for producing domestic low-CI fuels attributed to the multiplier, by fuel pool between 2026 and 2035. In 2026, credits from low-CI fuel production are estimated at 2.0 million, increasing to 2.8 million in 2030 and 2035.

Table 7: Additional credits from the multiplier for the production of low-CI fuels by fuel pool (millions)
Note: Figures may not add up to totals due to rounding.

Fuel pool	2026	2030	2035	Total, 2026 to 2035
Gasoline	0.6	0.7	0.7	6.9
Diesel	1.5	2.1	2.1	20.0
Total	2.0	2.8	2.8	26.9

Benefits and costs

Avoided cost of credits

The credit multiplier enables the creation of additional credits with respect to domestically produced low-CI fuels. These additional credits do not represent additional compliance actions or tonnes of CO₂e of emission reductions. Instead, they act as a substitute for costlier credits that would have otherwise been created. It is assumed that these additional credits would displace the most expensive pathway, which is referred to here as the marginal credit. The benefit of the proposed Amendments is calculated based on the avoided cost of obtaining the marginal credits that the multiplier displaces.

This analysis does not identify which specific pathway will have the highest cost over the analytical period. Which of these pathways has the highest cost in any given year depends on the market conditions, relative costs, all of which may shift over the period of the analysis. For this reason, the analysis does not tie the marginal credit to a named pathway. It is assumed to be the most expensive credit that would otherwise be required and is priced accordingly.

The marginal credit is valued at the price of the contribution to the emission-reduction funding programs. Under this mechanism, a primary supplier can satisfy a portion of its obligation by contributing to a registered emission-reduction funding program at a set price, which was established in 2022 at $350 per credit and is adjusted annually with the Consumer Price Index, which corresponds to $372 in 2024 dollars. Since credit prices are variable, and the marginal cost pathways could change over the period of analysis, the credit price of the marginal pathway is assumed here to cost the same as contributions to the emission-reduction funding program.

Therefore, the total benefit of the proposed Amendments is estimated to be $9.1 billion, calculated as the number of additional credits created by the multiplier valued at the price of contributions to the emission-reduction funding programs in each year, discounted to present value.

Table 8: Avoided compliance costs by primary suppliers
Note: For avoided costs, 2026, 2030, and 2035 values are undiscounted, and total avoided costs are discounted to present value using a 2% discount rate.

Benefits	2026	2030	2035	Total, 2026 to 2035
Marginal credits displaced (millions)	2.0	2.8	2.8	26.9
Avoided costs (in millions of dollars)	757	1,054	1,054	9,142

Forgone GHG emission reductions

As noted above, the introduction of credit multipliers results in avoided costs because fewer high-cost credits would need to be obtained by regulated parties. However, the same displacement would have an environmental consequence, as the additional credits created by the multiplier would not represent incremental GHG emission reductions. They would be awarded for fuel that was already being credited.

The marginal credits being displaced represent actual emission reductions. Therefore, when that credit is displaced, the emission reductions it would have delivered would no longer occur. Each displaced marginal credit would correspond to one tonne of CO₂e. Therefore, the forgone GHG emission reductions would be equal, in tonnes of CO₂e, to the additional credits created by the multiplier.

These forgone reductions are the principal cost attributable to the proposed Amendments. To monetize the forgone GHG reductions attributable to the proposed Amendments, the quantity of forgone GHG emission reductions each year was multiplied by the Department’s schedule of the values of the social cost of carbon (SCC), published in April 2023 (Social Cost of Greenhouse Gas Estimates – Interim Updated Guidance for the Government of Canada). The value of the SCC employed in this analysis and expressed in 2024 dollars is $312 per tonne in 2026 and increases to $360 in 2035. The resulting estimated present value of the 27 Mt forgone GHG emission reductions is $8.3 billion over the 2026 to 2035 period of analysis.

Although the proposed Amendments result in forgone GHG emission reductions relative to the baseline, they are expected to reduce the risk of future emission-reduction losses associated with declining domestic production and increased reliance on imported fuels for compliance credits. This is further discussed in the “Qualitative impacts” section below.

Table 9: Forgone GHG emission reductions and value
Note: For the value of forgone reductions, 2026, 2030 and 2035 values are undiscounted, and the total value is discounted to present value using a 2% discount rate.

Costs	2026	2030	2035	Total, 2026 to 2035
Forgone reductions (Mt CO2e)	2.0	2.8	2.8	26.9
Value of forgone reductions (in millions of dollars)	635	945	1,019	8,271

Administrative requirements

Consistent with the objectives of the Red Tape Reduction Act and the Government of Canada’s regulatory modernization agenda, the proposed Amendments streamline administrative requirements, while preserving regulatory oversight. These streamlined requirements include certain reporting exemptions and certain exceptions for report verification. Although some businesses would benefit from cost savings associated with the proposed Amendments, they are expected to be minor and have not been estimated in this analysis.

The proposed Amendments would also result in some additional administrative costs to participants in the credit market who would need to familiarize themselves with the proposed Amendments, demonstrate the origin of feedstocks used, and conduct business related to credit trading. Over the time frame of the analysis, the costs of these administrative requirements are estimated to be $675,000 in present value terms. Details on these administrative costs can be found in the “One-for-one rule” section below.

Qualitative impacts

In addition to the impacts quantified above, the proposed Amendments would protect Canada’s low-CI fuel sector, reduce the risk of future forgone GHG emission reductions, and increase compliance flexibilities. These benefits are considered qualitatively.

Protecting Canada’s low-CI fuel and gaseous production

Canada’s low-CI fuel sector plays an important role in the economy. In 2025, the low-CI fuel sector contributed $5.9 billion to Canada’s gross domestic product and supported 11 600 jobs.^{footnote 19} As noted in the “Issues” section, this sector is facing increasing competitiveness pressures. Left unaddressed, these pressures could drive a sustained decline in Canadian low-CI fuel production. By introducing a credit multiplier for domestically produced low-CI fuels derived from North American feedstocks, the proposed Amendments would make these fuels more competitive by increasing the compliance value of domestic fuels, as this creates an incentive for primary suppliers to procure those fuels. This would support domestic production and investment, and support more resilient domestic fuel and feedstock supply chains.

Furthermore, the proposed Amendments would reserve 50% of the limit on use of gaseous-class credits for the use of credits created from domestically produced low-CI gaseous fuels. As the 10% limit on gaseous fuels is not currently fully utilized, this change is not expected to have an impact in the near term. However, this measure ensures that there continues to be an incentive for the production of low-CI gaseous fuels in Canada.

Supporting long-term emission reductions

The benefit to Canadians is closely tied to the Regulations’ primary objective of reducing GHG emissions. The Regulations are designed to deliver emission reductions, and at present most of those reductions are delivered through low-CI fuel credits. The continued ability of the Regulations to deliver reductions therefore depends on a reliable supply of low-CI fuel, and a stable domestic sector is central to that supply.

A viable domestic low-CI fuel sector supports the Regulations’ emission reductions by ensuring that a significant volume of fuel underpinning most of the compliance is produced within Canada. This would ensure supply is responsive to Canadian demand rather than dependent on the availability and pricing of imports. The proposed Amendments would sustain demand for Canadian agricultural feedstocks, notably canola. Emission reductions under the Regulations depend on stable domestic supply and are placed at risk if that stability is disrupted.

In the baseline scenario, that stability is at risk. Recent policies implemented in foreign jurisdictions have placed Canadian producers under increasing competitive pressures, which is likely to affect both domestic production and investment. These pressures have already contributed to temporary shutdowns of some biodiesel and HDRD facilities or reduced production for other facilities, and if sustained, could drive a lasting decline in domestic low-CI fuel production. While Canada’s ethanol production has been stable in recent years, the sector will face competitiveness challenges in the near term, as the effective cost of imported U.S. ethanol decreases. A decline in domestic capacity would have consequences beyond the producers themselves. Compliance with the Regulations would depend increasingly on imports, at a time of heightened volatility in global trade and of growing risk of supply-chain disruptions. Because primary suppliers remain legally bound to meet their credit requirements regardless of fuel-market conditions, a disruption to low-CI fuel imports would raise the cost and difficulty of compliance. This would push suppliers toward scarcer credits, and risk falling out of compliance. As the Regulations’ credit market functions as a proxy for actual emission reductions, a supply interruption in the baseline scenario puts the reliability of the Regulations’ emission reductions at risk.

In the regulatory scenario, the multiplier increases credit revenue from domestically produced low-CI fuel, making the return on domestic production comparable to that of imports. This reduces the risk that competitive pressure translates into sustained decline and lost capacity. The result is a domestic sector on a more stable footing, a greater share of low-CI fuel demand met by domestic supply, more consistent demand for Canadian feedstock, and emission reductions that are less exposed to the availability of imported fuel, to the policy decisions of other jurisdictions and to disruptions in global trade.

Compliance flexibilities

While a strong and healthy domestic low-CI fuel sector is an important contributor to achieving the Regulations’ emissions reduction objectives, the effective operation of the Regulations also depends on a stable and liquid compliance credit market. The proposed Amendments would increase the contribution limit for registered emission-reduction funding programs. This enhances the current compliance flexibility available to regulated parties, supporting the long-term stability and resilience of the credit market.

Cost-benefit statement

• Number of years: 10 (2026 to 2035)
• Price year: 2024
• Present value base year: 2026
• Discount rate: 2%

Table 10: Summary of monetized costs and benefits (in millions of dollars)
Note: The total cost row includes administrative costs.

Impacts	Undiscounted — 2026	Undiscounted — 2030	Undiscounted — 2035	Discounted — Total	Annualized value
Total cost	635	945	1,019	8,271	903
Total benefit	757	1,054	1,054	9,142	998
Net benefit	122	109	35	872	95

Analytical uncertainty

Benefits and costs may be lower or higher than estimated. The central estimate assumes baseline production of domestic low-CI fuels at the level required to meet the British Columbia and Ontario domestic blend requirements and Quebec’s production tax credit. In the regulatory scenario, it is assumed that the low-CI fuel production facilities will maximize their production to benefit from the multiplier.

Actual domestic low-CI fuel production could be higher or lower than estimated. The analysis tested the impact of production in the regulatory scenario being 25% lower than estimated in the central case. This results in a net benefit of $0.6 billion. The production estimate in the regulatory scenario was also tested assuming production is 25% higher than estimated in the central case. This results in a net benefit of $1.1 billion. Thus, the conclusion of the central analysis that the proposed Amendments are a net benefit holds true if regulatory production is higher or lower than the central estimate.

Canada’s Cost-Benefit Analysis Guide for Regulatory Proposals states that regulatory proposals relating to human health or environmental goods and services should employ a social discount rate. The central case employs a 2% social discount rate, which is the near-term Ramsey discount rate now utilized by the Government of Canada when monetizing GHG reductions. Sensitivity analyses were conducted using 1.5% and 2.5% discount rates, and their associated annual SCC values, to compare estimates. The SCC estimates used in this sensitivity analysis relevant to these discount rates can be found in Canada’s social cost of greenhouse gas guidance. The use of the 1.5% discount rate results in a net cost of $4.8 billion, and the use of the 2.5% discount rate results in a net benefit of $3.9 billion. Thus, the net benefit conclusion of the analysis is sensitive to these alternate discount rates and SCC values.

Table 11: Sensitivity analysis (in billions of dollars)
Note: Figures may not add up to totals due to rounding.

Variable(s)	Sensitivity case	Benefits	Costs	Net benefit (cost)
Central case	N/A	9.1	8.3	0.9
Lower domestic production of low-CI fuels	Domestic production lower by 25% compared to the central case	6.3	5.7	0.6
Higher domestic production of low-CI fuels	Domestic production higher by 25% compared to the central case	11.9	10.7	1.1
Lower discount rate	1.5%	9.3	14.1	(4.8)
Higher discount rate	2.5%	8.9	5.1	3.9

Distributional analysis

The distributional effects of the multiplier follow from its central mechanism: it would change the supply and price of credits from domestic low-CI fuel production, and would alter the share of fuel produced domestically, without changing the total volume of low-CI fuel supplied or the reduction obligations placed on primary suppliers.

Affordability

The proposed Amendments increase the compliance value of domestic low-CI fuels; therefore, they are expected to decrease overall compliance costs for primary suppliers. These cost savings could be passed on to consumers, resulting in decreased gasoline and diesel retail prices, although the magnitude of any such effect depends on the degree to which compliance-cost changes are passed through to pump prices, which varies with market structure and competitive conditions in each fuel market.

As gasoline is consumed primarily by households, while diesel is used predominantly in freight transportation and other industrial activities, the benefits of any fuel price reductions would be distributed across both consumers and businesses.

Because lower-income households spend a larger share of their income on transportation fuel, any downward change in fuel prices has a proportionally larger effect on those households; however, given the expected magnitude, the distributional effect across income groups is limited.

Competitiveness impacts

The most concentrated distributional effects fall within the fuel sector itself, where the proposed Amendments shift advantage between segments.

Domestic low-CI fuel producers: Recent policy measures in foreign jurisdictions have increased the competitive pressures facing Canadian producers in the domestic market. These pressures affect both domestic production and investment and, in the absence of the proposed Amendments, could result in a sustained decline in Canadian low-CI fuel production.

Canadian producers of ethanol, biodiesel and HDRD are the intended beneficiaries of the proposed Amendments. By awarding more credits per unit of qualifying domestic low-CI fuel, the multiplier would improve the competitiveness of domestic supply relative to imports and would provide additional revenue to producers in operation. The measure is intended to support the competitiveness of Canadian producers in the context of evolving North American market conditions, including changes to incentives available to fuel producers in other jurisdictions. By alleviating these competitive pressures, the proposed Amendments would support increased domestic production of low-CI fuel. Over the time frame of the analysis, domestic production would be 39.6 billion litres in the regulatory scenario, which would be an increase of 19.8 billion litres from the baseline. Therefore, the proposed Amendments would meet an additional 26% of the low-CI fuel demand.

Primary suppliers: Producers and importers of gasoline and diesel for use in Canada are the regulated parties under the Regulations. The credit multiplier would add no new requirement for primary suppliers, thus, there are no changes to their CI reduction obligations. It affects them indirectly, through the supply and price of credits: by increasing the number of credits available for domestic low-CI fuels or through co-processing, the multiplier affects the cost at which primary suppliers meet their existing obligations. Firms that are primary suppliers and also produce low-CI fuels would also be beneficiaries, as they capture the additional credits from domestic production directly rather than through the credit market.

Co-processing refineries: A subsection of primary suppliers has capabilities in the co-processing of low-CI feedstock alongside crude oil. This action results in a portion of co-processed low-CI fuel being produced along with gasoline and diesel and credits can be created with respect to this co-processed low-CI fuel under Compliance Category 1. The biomass-derived portion of the fuel would be eligible for the multiplier. Currently, co-processing projects at six refineries have been approved for credit creation under the Regulations. The multiplier may incent additional refineries to co-process low-CI feedstock in the future.

Proponents of high-cost compliance pathways: Firms investing in higher-cost crediting pathways in the baseline scenario may be negatively affected. By increasing credit creation from eligible domestic low-CI fuels in the policy scenario, the multiplier increases overall credit supply. Depending on the magnitude of the multiplier and market response, this could place downward pressure on credit prices, potentially reducing credit revenues available to creators of higher-cost compliance pathways. These are the pathways whose credits are displaced in the analysis and the parties developing them bear the corresponding reduction in credit demand and value.

Feedstock producers: Canadian agricultural feedstock producers are expected to benefit indirectly from the proposed Amendments as eligibility for the multiplier would require the use of North American feedstocks. This requirement would preserve existing demand for those feedstocks and support established agricultural supply chains. Canadian canola producers may particularly benefit, as canola oil is an important feedstock for biodiesel, HDRD production and co-processing facilities, and a significant share of domestically produced biodiesel, HDRD and co-processed low-CI diesel is currently derived from Canadian-grown canola.

Regional impacts

The distributional effects have a regional dimension because domestic low-CI fuel production and its feedstock supply are geographically concentrated. Benefits to producers accrue to the provinces where production capacity is located: ethanol production in Alberta, Saskatchewan, Manitoba, Ontario and Quebec; biodiesel production in British Columbia, Alberta, Ontario and Quebec; and HDRD production in British Columbia, Alberta and Newfoundland and Labrador. Benefits to feedstock producers are concentrated in the Prairie provinces, where canola is grown and Ontario and Quebec, where most corn for ethanol is grown. The provinces that have introduced domestic-content mandates and production incentives — British Columbia, Ontario and Quebec — are where domestic production is concentrated in the baseline, and where the multiplier’s additional credit revenue therefore stacks on top of existing provincial support. Fuel price effects, by contrast, are borne by consumers across all provinces and territories in proportion to their fuel use.

Gender-based analysis plus

The proposed Amendments are expected to stabilize employment in the domestic low-CI fuel sector. The Section 45Z Clean Fuel Production Credit has made it virtually impossible for Canadian production to compete with U.S. produced low-CI fuel on the U.S. or Canadian market, resulting in a temporary shutdown of some low-CI fuel facilities, and decreased production in other facilities. The proposed Amendments would be expected to result in a steady demand for domestic production, alleviating pressures for temporary shutdowns or reduced production. This would result in positive employment impacts in low-CI fuel sectors. Young and middle-aged men will be at the greatest advantage to benefit from employment opportunities within these sectors where the facilities are located.^{footnote 21}

Small business lens

Analysis under the small business lens concluded that the proposed Amendments would not impact Canadian small businesses. No mandatory regulated parties are considered small businesses, and no voluntary participants are expected to be small businesses. Furthermore, as enabled under subsection 140(3) of the Canadian Environmental Protection Act, 1999 (CEPA), primary suppliers that produce or import less than 400 m³ of liquid fossil fuel per year are not subject to the requirements of the Regulations.

One-for-one rule

The one-for-one rule applies since there is an incremental increase in administrative burden on business. The proposal is considered burden “in” under the rule, and no regulatory titles are repealed or introduced. The proposed Amendments would result in an estimated annualized administrative total cost of $21,617 or $153 per business.^{footnote 22}

Approximately 141 businesses would be expected to bear costs associated with familiarizing responsible staff with the proposed Amendments. It is estimated that each business would require two hours for middle managers, two hours for engineers, and four hours for legal staff to familiarize themselves with the requirements, respectively. For ongoing costs, credit market participants would incur costs associated with providing an explanation when credits are traded below their fair market value. Besides, 141 businesses would spend an average of about five hours per year providing a justification for credits traded below their fair market value, and an average of one hour per year obtaining approvals. Further, these businesses would be expected to require, on average, two hours per year to prepare and submit a request to transfer additional credits. Finally, low-CI fuel producers and importers would incur costs related to demonstrating the origin of feedstocks used. It is estimated that 41 low-CI fuel producers and importers would spend an average of nine hours per year to determine the proportion of the fuel that was derived from North American feedstock, and a further two hours obtaining management approval for that calculation in their credit creation report.

Regulatory cooperation and alignment

The proposed Amendments are consistent with measures to support domestic low-CI fuel production in British Columbia, Ontario, and Quebec. In February 2025, British Columbia amended its Low Carbon Fuel Standard to require that all renewable fuels used to meet its minimum renewable content requirements be produced domestically, setting a content requirement of 8% Canadian low-CI fuel in diesel, and 5% in gasoline. Ontario finalized amendments to its Ontario Regulation 663/20 (Cleaner Transportation Fuels: Renewable Content Requirements for Gasoline and Diesel Fuels) in August 2025 requiring that by 2030, at least 47% of low-CI fuel content in gasoline and 75% in diesel be sourced from Canadian producers. Quebec provided a production tax credit for low-CI fuels produced and consumed in the province on April 1, 2023, which was modified in 2024 to strengthen support for low-carbon intensity fuel facilities in the province.

While the provincial approaches differ in design from the proposed federal credit multiplier, they share a common objective of supporting a stable and viable domestic low-CI fuel sector. The proposed Amendments would complement these provincial measures by providing an additional federal demand signal for Canadian producers at the credit market level, without duplicating or conflicting with existing provincial requirements.

International obligations

Canada is a Party to the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement. Under the Paris Agreement, Canada has committed to communicating and maintaining nationally determined contributions (NDCs) and to pursuing domestic measures aimed at achieving its emissions reduction targets. As part of its commitment under the Paris Agreement, Canada has a target of achieving net-zero emissions by 2050.

The proposed Amendments were developed in consideration of Canada’s international obligations. As the Regulations are considered a technical regulation, the proposed Amendments are relevant to Canada’s commitments under the World Trade Organization Technical Barriers to Trade Agreement, as well as other applicable international trade agreements. Consistent with Canada’s obligation under the World Trade Organization Technical Barriers to Trade Agreement, notice was provided of the publication of the proposed Amendments in the Canada Gazette, Part I, for a comment period of 75 days.

Effects on the environment

In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment (SEEA Directive), a comprehensive strategic environmental and economic assessment (SEEA) has been conducted. The strategic environmental analysis undertaken for the proposed Amendments would likely have an effect on the environment, as they are expected to result in forgone GHG emission reductions (see “Cost-benefit statement” section above). Although the proposed Amendments would result in some forgone GHG emission reductions, by supporting the domestic low-CI fuel sector in Canada and thereby strengthening the long-term resilience of the Regulations’ credit market, the Amendments would ensure that the Regulations continue to deliver significant GHG emission reductions. The Regulations’ primary objective of reducing GHG emissions and supporting the transition to a low-carbon economy aligns with the 2022 to 2026 Federal Sustainable Development Strategy, specifically Goal 13: Take action on climate change and its impacts.

In accordance with guidance under the SEEA Directive, this proposal’s SEEA did not include a strategic economic analysis due to the nature and scope of the proposal.

Right to a healthy environment

In the administration of CEPA, the Government of Canada has a duty to protect the right to a healthy environment, as provided for under CEPA, subject to reasonable limits. The Implementation framework for the right to a healthy environment (the Framework) sets out considerations to protect this right and uphold the principles described in the Framework.

With respect to the principle of non-regression, the Department has assessed the potential for the proposed Amendments to lead to a decrease in the level of environmental or human health protection. While the proposed Amendments are expected to result in forgone GHG emission reductions relative to the current approach, they are intended to support the long-term viability of Canada’s domestic low-CI fuel sector. By strengthening domestic production capacity and supporting a diverse supply of compliance options, the proposed Amendments are expected to enhance the resilience of the Regulations’ credit market and support the continued achievement of GHG emission reductions.

Without intervention, increasing reliance on imported low-CI fuels for compliance could increase the Canadian market’s exposure to external supply disruptions and changing market conditions. Supporting domestic production capacity is expected to reduce these risks and help ensure that the Regulations continue to deliver GHG emission reductions over the long term.

In developing the proposed Amendments, environmental, economic and social factors were considered together (see “Cost-benefit statement” section). Other elements of the Framework were also considered, including consultations conducted on the proposed Amendments (see “Consultations” section) and the gender-based analysis plus assessment, which identified that employment benefits may disproportionately favour young and middle-aged men in regions where production facilities are located (see “Gender-based analysis plus” section).

Implementation, compliance and enforcement, and service standards

Implementation

The proposed Amendments would come into force on the day on which they are registered.

The Department would communicate information regarding the Amendments through stakeholder information sessions, written guidance materials, and direct outreach to known primary suppliers, credit creators, and industry associations representing participants under the Regulations. These activities would support awareness of the Amendments and facilitate implementation within the existing regulatory framework.

The existing Regulations’ credit and tracking system would continue to be used for registration, reporting, credit creation, credit trading, and compliance demonstration. No significant changes to the system or to existing administrative processes are anticipated.

Compliance promotion activities for the Amendments would be integrated into the Department’s existing compliance promotion program for the Regulations. This would include maintaining information on the Department’s website, responding to stakeholder inquiries, delivering information and compliance promotion sessions, and providing guidance materials, as required.

The Cabinet Directive on Regulation requires federal departments and agencies to take a life-cycle approach to regulation, including the ongoing review of existing regulations. The Department will continue to monitor the performance of the Regulations and assess whether the Regulations and associated amendments remain effective in achieving their intended objectives. A formal review that will consider performance data, stakeholder feedback, evolving market conditions, and the continued effectiveness of compliance pathways and credit market mechanisms is planned to be undertaken. This review would inform future regulatory amendments as appropriate.

Compliance and enforcement

Compliance with the Regulations is promoted through activities that may include the development and distribution of guidance materials, responses to inquiries from stakeholders, and outreach activities. The proposed Amendments would be administered through the existing Regulations’ credit and tracking system. Departmental officials would continue to verify information submitted under the Regulations and monitor compliance using existing administrative processes.

As the Amendments are made under CEPA, implementation and enforcement will be undertaken by the Department in accordance with the compliance and enforcement policy for CEPA.^{footnote 24} Enforcement officers will apply this policy when verifying compliance with the regulatory requirements.

Service standards

The proposed Amendments do not introduce new or increased fees, and existing service standards associated with registration, reporting, and credit-related processes under the Regulations would continue to apply.

Contacts

Lisa Ryan
Acting Executive Director
Low Carbon Fuels Division
Environment and Climate Change Canada
351 Saint-Joseph Boulevard
Gatineau, Quebec
K1A 0H3
Email: cfsncp@ec.gc.ca

Matthew Watkinson
Executive Director
Regulatory Analysis and Valuation Division
Environment and Climate Change Canada
351 Saint-Joseph Boulevard
Gatineau, Quebec
K1A 0H3
Email: ravd.darv@ec.gc.ca

PROPOSED REGULATORY TEXT

Notice is given, under subsection 332(1)^{footnote a} of the Canadian Environmental Protection Act, 1999^{footnote b}, that the Governor in Council proposes to make the annexed Regulations Amending the Clean Fuel Regulations and the Environmental Violations Administrative Monetary Penalties Regulations under sections 140^{footnote c} and 326^{footnote d} of that Act and under subsection 5(1) of the Environmental Violations Administrative Monetary Penalties Act^{footnote e}.

Any person may, within 75 days after the date of publication of this notice, file with the Minister of the Environment comments with respect to the proposed Regulations or a notice of objection requesting that a board of review be established under section 333^{footnote f} of that Act and stating the reasons for the objection. Persons filing comments are strongly encouraged to use the online commenting feature that is available on the Canada Gazette website. Persons filing comments by any other means, and persons filing a notice of objection, should cite the Canada Gazette, Part I, and the date of publication of this notice, and send the comments or notice of objection to Lisa Ryan, Acting Executive Director, Low Carbon Fuels Division, Carbon Markets Bureau, Department of the Environment, 351 St. Joseph Boulevard , Gatineau, Quebec, K1A 0H3 (email: cfsncp@ec.gc.ca).

Please note that as part of the publication process, all representations, including attachments, will be published on the Canada Gazette website, subject to its terms of use relating to the provision of comments.

A person who provides information to the Minister may submit with the information a request for confidentiality under subsection 313(1)^{footnote g} of that Act. The request for confidentiality must be submitted with reasons as required by subsection 313(2)^{footnote h} of the Act.

Ottawa, October 23, 2026

Janna Rinaldi
Assistant Clerk of the Privy Council

Regulations Amending the Clean Fuel Regulations and the Environmental Violations Administrative Monetary Penalties Regulations

Canadian Environmental Protection Act, 1999

Clean Fuel Regulations

1 (1) The definition ISO Standard 14064-3:2019 in subsection 1(1) of the Clean Fuel Regulations ^{footnote 23} is repealed.

(2) The definitions charging-site host and misstatement in subsection 1(1) of the Regulations are replaced by the following:

charging-site host

means a person who owns or leases a charging station, other than a charging station that is intended primarily for use by the occupants of a private dwelling-place that was installed at the expense of an occupant of that dwelling-place. (hôte d’une station de recharge)

misstatement

means an error, omission or misreporting, as defined in Methods for Verification and Certification, in an application or report referred to in these Regulations. (déclaration erronée)

(3) The definition compliance-credit transfer system in subsection 1(1) of the English version of the Regulations is replaced by the following:

compliance-credit transfer system

means the system administered by the Minister for the transfer of compliance credits in accordance with sections 105 to 112. (mécanisme de cession des unités de conformité)

(4) The portion of paragraph (b) of the definition gasoline in subsection 1(1) of the Regulations before subparagraph (ii) is replaced by the following:

• (b) is suitable for use in a spark-ignition engine and has the following characteristics:
  • (i) a vapour pressure of no less than 35 kPa,

(5) Subparagraphs (b)(iii) and (iv) of the definition gasoline in subsection 1(1) of the Regulations are replaced by the following:

• (iii) a distillation temperature of no less than 35°C and no more than 70°C at which 10% of the fuel has evaporated, and
• (iv) a distillation temperature of no less than 60°C and no more than 120°C at which 50% of the fuel has evaporated. (essence)

(6) Subsection 1(1) of the Regulations is amended by adding the following in alphanumeric order:

ISO Standard 14064-3

means the International Standard ISO 14064-3, entitled Greenhouse gases — Part 3: Specification with guidance for the verification and validation of greenhouse gas statements, published by the International Organization for Standardization. (norme ISO 14064-3)

2 Subsection 2(1) of the Regulations is replaced by the following:

Incorporation by reference

2 (1) A standard or method that is incorporated by reference in these Regulations is incorporated as amended from time to time.

3 (1) The marginal note to subsection 14(3) of the Regulations is replaced by “December 15 — other credits”.

(2) Subsection 14(4) of the Regulations is replaced by the following:

Conditions for use — compliance credits created from contributions

(3.1) However, the primary supplier must not use compliance credits that they created by contributing to a registered emission-reduction funding program in accordance with paragraph 118(1)(b) unless 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.

Compliance — December 15

(4) Subject to sections 16 to 18, the primary supplier must, no later than the December 15 that follows the end of a compliance period, satisfy the total reduction requirement and comply with the volumetric requirements set out in subsections 6(1) and 7(1) for that compliance period.

4 (1) Subsection 15(1) of the Regulations is replaced by the following:

Limit 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 subsection 13(3) or 14(3), paragraph 18(1)(a) or subsection 18(3) during the calendar year that follows the end of a compliance period does not exceed 15% of the primary supplier’s total reduction requirement.

(2) Subsection 15(3) of the Regulations is replaced by the following:

Use of credits — imported gaseous fuels

(2.1) The primary supplier must ensure that the total number of the following compliance credits that are used in accordance with subsection 13(4) or paragraph 18(1)(b) during the calendar year that follows the end of a compliance period does not exceed 5% of the primary supplier’s total reduction requirement:

• (a) those compliance credits created under paragraph 20(a) by carrying out a project that is recognized under subsection 39(1) or 40(3), and
• (b) those compliance credits created under paragraph 20(b).

Limit — generic quantification method

(3) The primary supplier must ensure that the total number of compliance credits created under paragraph 19(1)(a) or (3)(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) or paragraphs 18(1)(b) or (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.

5 Paragraph 18(1)(b) of the Regulations is replaced by the following:

• (b) subject to subsections 15(2) and (2.1), any compliance credits in their account opened under paragraph 28(b); and

6 (1) Paragraph 19(1)(a) of the Regulations is replaced by the following:

• (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
  • (i) subsection 35(1), 36(1) or 37(3), in the case of a project carried out in Canada, or
  • (ii) subsection 39(1) or 40(3), in any other case;

(2) Section 19 of the Regulations is amended by adding the following after subsection (2):

Related compliance credits

(3) A registered creator who creates any of the following compliance credits may also create related compliance credits in respect of the liquid class:

• (a) a compliance credit that is created under subparagraph (1)(a)(i) by producing co-processed low-carbon-intensity fuel;
• (b) a compliance credit that is created under paragraph (1)(c); or
• (c) a compliance credit that is created under any of the following provisions by displacing the use of a quantity of fuel in the liquid class with the use of a quantity of low-carbon intensity fuel produced in Canada:
  • (i) subparagraph (1)(d)(ii),
  • (ii) subparagraph (1)(d)(iii), or
  • (iii) subparagraph (1)(d)(v).

Number of related compliance credits

(4) The number of compliance credits that may be created under subsection (3) is determined by the formula

P × N × Fr

where

P

is

• (a) 1, in the case of low-carbon intensity fuel that is produced in Newfoundland and Labrador,
• (b) 1, in the case of low-carbon intensity fuel that has been used to create compliance credits under subparagraph (1)(d)(ii), (1)(d)(iii), or (1)(d)(v); and
• (c) in any other case, the quotient of the quantity of the low-carbon intensity fuel used to create compliance credits under subsection (1) referred to in paragraph (3)(a) or (b) that is derived from North American feedstock divided by the total quantity of that fuel;

N

is the number of compliance credits created under subsection (1) and referred to in any of paragraphs (3)(a) to (c); and

Fr

is

• (a) in the case of a co-processed low-carbon-intensity fuel, the factor set out in column 2 of Table 1 to Schedule 3.1 for the fuel, and
• (b) in the case of any low-carbon intensity fuel, that is not co-processed, the factor set out in column 2 of Table 2 to Schedule 3.1 for the low-carbon intensity fuel.

North American feedstock

(5) For the purpose of subsection (4), a feedstock is North American if

• (a) in the case of a processed feedstock, it is produced in Canada, the United States or Mexico from materials that are harvested, produced, extracted or collected in those countries;
• (b) in any other case, it is harvested, produced, extracted or collected in Canada, the United States or Mexico.

Non-application

(6) Subsections (3) and (4) do not apply in respect of a compliance credit that was created during any compliance period that ends before January 1, 2026.

7 (1) Subsection 23(1) of the Regulations is replaced by the following:

Creation of provisional compliance credits

23 (1) Any compliance credit created under subsection 19(1) or (3) or section 20 is considered to be a provisional compliance credit at the time that it is created.

(2) Subsection 23(3) of the Regulations is replaced by the following:

Single use for creation of provisional compliance credits

(3) A quantity of a fuel, or a quantity of an energy source, that has been used by a person to create provisional compliance credits under subsection 19(3), 94(1), 95(1), 96(1), 98(1), 99(1), 100(1), 101(1), 102(1) or 104(1) must not be used by another person to create compliance credits under the same subsection, and any quantity that is used more than once under the same subsection is deemed not to create any provisional compliance credits.

8 Paragraph 24(1)(a) of the Regulations is replaced by the following:

• (a) paragraph 28(a), in the case of a compliance credit created under subsection 19(1) or (3); and

9 Paragraph 31(2)(b) of the English version of the Regulations is replaced by the following:

• (b) establish a period of 10 years, beginning on the later of the day on which the Minister recognizes a project to which it is applicable and any preferred day referred to in paragraph 34(2)(b), at the end of which the carrying out of the project ceases to create provisional compliance credits; and

10 Paragraph 32(2)(d) of the English version of the Regulations is replaced by the following:

• (d) establish a period of no less than 10 years, beginning on the later of the day on which the Minister recognizes the project and any preferred day referred to in paragraph 34(2)(b), at the end of which the carrying out of the project ceases to create provisional compliance credits;

11 The description of Q_fuel in subsection 45(1) of the Regulations is replaced by the following:

Q_fuel

is the quantity of the low-carbon-intensity fuel that is produced at the facility during the period, expressed in kilograms, in the case of liquefied renewable natural gas or hydrogen, or in cubic metres, in any other case;

12 The portion of subsection 55(3) of the Regulations before paragraph (a) is replaced by the following:

Period of validity

(3) An exemption granted under subsection (1) ceases to be valid on the earlier of

13 Subsection 63(2) of the Regulations is replaced by the following:

Designation of accreditation body

(2) The Minister may designate an accreditation body as a designated accreditation body referred to in subsection (1)if it is a member of the Global Accreditation Cooperation Incorporated or an equivalent body and meets the requirements set out in ISO/IEC Standard 17011.

14 Paragraphs 70(2)(a) and (b) of the Regulations are replaced by the following:

• (a) the day on which a certification body, on the basis of a surveillance audit it conducted, is no longer satisfied that the applicable requirements set out in sections 48 to 52 are met,
• (b) the day that is the first anniversary of the day on which the most recent surveillance audit was conducted by the certification body,

15 (1) Subsection 75(3) of the English version of the Regulations is replaced by the following:

Use pending approval

(3) However, in the case of an application under subsection 80(1) for the approval of a carbon intensity determined in accordance with paragraph (1)(b) or subsection 76(1), the default carbon intensity referred to in paragraph (1)(a) may be used to create compliance credits during the period beginning on the day on which the application is made and ending on the day on which the carbon intensity is approved under subsection 85(1), even if that period is longer than 12 consecutive months.

(2) Subsection 75(5) of the Regulations is replaced by the following:

36 month validity

(5) The carbon intensity referred to in paragraph (1)(b) ceases to be valid 36 months after the day on which it was approved.

16 Subsection 76(2) of the Regulations is replaced by the following:

Carbon-intensity contributor

(2) A carbon intensity contributor may elect to determine the carbon intensity of a low-carbon-intensity fuel, or a material input, that is renewable natural gas, biogas, renewable propane or hydrogen in accordance with the option set out in either paragraph (3)(a) or (b), if they have input data, for a period of 24 consecutive months during the period of 30 months that immediately precedes the day on which they make the election, derived from the activities referred to in the definition carbon intensity in subsection 1(1) that are carried out over the life-cycle of the fuel or material input, as the case may be.

17 The portion of section 77 of the Regulations before paragraph (a) is replaced by the following:

Fuel LCA Model — co-processed low-carbon-intensity fuel

77 A registered creator or foreign supplier must determine the carbon intensity of a co-processed low-carbon-intensity fuel using the Fuel LCA Model in accordance with the applicable emission-reduction quantification method established under subsection 31(1) or 32(1) and either of the following options:

18 (1) Subparagraphs 86(1)(b)(i) to (iii) of the Regulations are replaced by the following:

• (i) 2 gCO₂e/MJ, if the absolute value of the approved carbon intensity is less than 20 gCO₂e/MJ,
• (ii) 10%, if the absolute value of the approved carbon intensity is between 20 and 100 gCO₂e/MJ, and
• (iii) 10 gCO₂e/MJ, if the absolute value of the approved carbon intensity is greater than 100 gCO2e/MJ; and

(2) Paragraphs 86(6)(a) to (c) of the Regulations are replaced by the following:

• (a) 2 gCO₂e/MJ, if the absolute value of the approved carbon intensity is less than 20 gCO₂e/MJ;
• (b) 10%, if the absolute value of the approved carbon intensity is between 20 and 100 gCO₂e/MJ; and
• (c) 10 gCO₂e/MJ, if the absolute value of the approved carbon intensity is greater than 100 gCO₂e/MJ.

(3) Paragraphs 86(7)(a) to (c) of the Regulations are replaced by the following:

• (a) 2 gCO₂e/MJ, if the absolute value of the approved carbon intensity is less than 20 gCO₂e/MJ;
• (b) 10%, if the absolute value of the approved carbon intensity is between 20 and 100 gCO₂e/MJ; and
• (c) 10 gCO₂e/MJ, if the absolute value of the approved carbon intensity is greater than 100 gCO₂e/MJ.

19 The Regulations are amended by adding the following after section 86:

Request for invalidation

86.1 (1) A registered creator, carbon intensity contributor or foreign supplier may request that the Minister invalidates the carbon intensity for which they applied for approval.

Reasons

(2) The request must provide the reasons the invalidation is being requested.

20 (1) Paragraphs 87(1)(a) to (c) of the Regulations are replaced by the following:

• (a) 2 gCO₂e/MJ, if the absolute value of the approved carbon intensity is less than 20 gCO₂e/MJ;
• (b) 10%, if the absolute value of the approved carbon intensity is between 20 and 100 gCO₂e/MJ; and
• (c) 10 gCO₂e/MJ, if the absolute value of the approved carbon intensity is greater than 100 gCO₂e/MJ.

(2) Paragraphs 87(2)(a) to (c) of the Regulations are replaced by the following:

• (a) 2 gCO₂e/MJ, if the absolute value of the approved carbon intensity is less than 20 gCO₂e/MJ;
• (b) 10%, if the absolute value of the approved carbon intensity is between 20 and 100 gCO₂e/MJ; and
• (c) 10 gCO₂e/MJ, if the absolute value of the approved carbon intensity is greater than 100 gCO₂e/MJ.

21 (1) The portion of subsection 88(1) of the Regulations before paragraph (a) is replaced by the following:

Adjustment of compliance credits

88 (1) A registered creator may — in the first annual credit-creation report that they submit under section 120 or first credit-adjustment report that they submit under section 122 after the Minister approves, under subsection 85(1), the carbon intensity of a fuel or energy source determined in accordance with section 76, 78 or 79 — request that compliance credits be created for activities carried out before the day on which the Minister approved the carbon intensity if

(2) Subsection 88(2) of the Regulations is replaced by the following:

Adjustment period

(1.1) The request must be for the creation of compliance credits for activities that are carried out during

• (a) the portion of the compliance period that begins on the first day of the compliance period and ends on the day on which the Minister approves the carbon intensity; and
• (b) the three compliance periods that precede the compliance period during which the Minister approves the carbon intensity.

Number of adjusted compliance credits

(2) The number of compliance credits that may be created as a result of a request under subsection (1) with respect to activities that are carried out during the portion of the compliance period referred to in paragraph (1.1)(a) and during each of the compliance periods referred to in paragraph (1.1)(b) is equal to the difference between

• (a) the maximum number of compliance credits that would be created for those activities, calculated using the information contained in the report that they submit under section 120 or 121 in respect of that portion of the compliance period or in respect of those compliance periods and using the approved carbon intensity referred to in subsection (1) less any additional value referred to in subsection 80(2), and
• (b) the total number of compliance credits that were created by the registered creator for those activities, calculated using the carbon intensity that was determined in accordance with section 75 or that was temporarily approved under subsection 91(4), as the case may be.

22 Section 89 of the Regulations is replaced by the following:

Adjustment — actual carbon intensity

89 If the carbon intensity that was determined for a fuel in accordance with section 76 and approved under subsection 85(1) is not equal to the actual carbon intensity of the fuel that is reported in the carbon-intensity-pathway report submitted under subsection 123(1) for the compliance period, the registered creator must request in the credit-adjustment report that they submit under subsection 122(1) that any compliance credits that were created under paragraph 19(1)(b) or (c) or 20(b) or (c) for the compliance period using the approved carbon intensity be adjusted based on that actual carbon intensity.

23 Subsection 90(2) of the Regulations is replaced by the following:

Number of adjusted compliance credits

(2) The number of compliance credits that may be created under subsection (1) with respect to a compliance period or portion of a compliance period that is part of the period referred to in that subsection is equal to the difference between

• (a) the maximum number of compliance credits that would be created by the registered creator for the compliance period or portion of a compliance period, calculated using the information contained in the report that they submit under section 120 or 121 for the compliance periods included in that period and the carbon intensity that was determined in accordance with any of sections 76 to 79, as the case may be, and
• (b) the total number of compliance credits that were created by the registered creator for the compliance period or portion of a compliance period, calculated using the carbon intensity that they used to create compliance credits before July 1, 2024.

24 (1) Subparagraph 106(2)(e)(iv) of the Regulations is replaced by the following:

• (iv) the price that has been or will be paid to the transferor by the transferee for each compliance credit,
• (iv.1) if the transfer request indicates that the price is zero or less than the fair market value
• (A) a detailed explanation of why the price is zero or below fair market value, and
• (B) in a case in which the transferee purchased the low-carbon intensity fuel that was used to create the compliance credits, the total price they paid or will pay for the fuel and the quantity of the fuel they purchased, and

(2) Section 106 of the Regulations is amended by adding the following after subsection (2):

Record — price

(2.1) If a participant indicates in the transfer request that the price that was or will be paid by the transferee for each compliance credit is greater than zero dollars, a participant must, after that price is paid, retain records that demonstrate that the price was in fact paid by the transferee to the transferor.

Record — price of zero dollars

(2.2) If a participant indicates in the transfer request that the price to be paid by the transferee for each compliance credit is zero dollars, the participant must retain records that demonstrate that no monetary or other economic value is exchanged in connection with the transfer.

(3) Subsection 106(3) of the Regulations is amended by adding the following after paragraph (d):

• (d.1) compliance credits in respect of the liquid class that are created under paragraph 19(3)(a);
• (d.2) compliance credits in respect of the liquid class that are created under paragraph 19(3)(b);
• (d.3) compliance credits in respect of the liquid class that are created under paragraph 19(3)(c);

25 (1) Subsection 108(1) of the Regulations is replaced by the following:

Transfer on creation

108 (1) A registered creator who has created provisional compliance credits under paragraph 19(1)(b) or (c) or 20(b) or (c) by importing into Canada or producing in Canada a quantity of low-carbon-intensity fuel may transfer those provisional compliance credits to a participant who is purchasing that low-carbon-intensity fuel by submitting a transfer request to the Minister that is signed by the authorized agent of the registered creator as well as the authorized agent of the transferee and contains the information referred to in subsection (2).

Transfer of related compliance credits

(1.1) If the transfer is in respect of compliance credits that were created under paragraph 19(1)(c), the registered creator and the transferee may, in the transfer request, also request the transfer of compliance credits that were created under paragraph 19(3)(b) and are related to the compliance credits that are to be transferred.

(2) Subsection 108(2) of the Regulations is amended by striking out “and” at the end of paragraph (f) and by adding the following after paragraph (g):

• (h) an indication of whether the transfer includes the compliance credits created under paragraph 19(3)(b);
• (i) the price that was or will be paid to the registered creator by the transferee for each compliance credit; and
• (j) if the transfer request indicates that the price of the compliance credits is zero or less than the fair market value, the total price that was or will be paid by the transferee for the fuel and the quantity of fuel they purchased.

(3) Section 108 of the Regulations is amended by adding the following after subsection (2):

Record — price

(3) If a participant indicates in the transfer request that the price that was or will be paid by the transferee for each compliance credit is greater than zero dollars, a participant must, after that price is paid, retain records that demonstrate that the price was in fact paid by the transferee to the registered creator.

Record — price of zero dollars

(4) If a participant indicates in the transfer request that the price to be paid by the transferee for each compliance credit is zero dollars, the participant must retain records that demonstrate that no monetary or other economic value is exchanged in connection with the transfer.

26 The marginal note to section 109 of the French version of the Regulations is replaced by “Cession immédiate”.

27 The portion of subsection 110(1) of the Regulations before paragraph (a) is replaced by the following:

Pledging credits through mechanism

110 (1) A participant may, in a report submitted under subsection 126(1), pledge to offer to transfer through the compliance-credit clearance mechanism any compliance credits that

28 (1) The portion of subsection 112(3) of the Regulations before the formula is replaced by the following:

Maximum price

(3) A participant who has pledged to offer to transfer a compliance credit must accept an offer to acquire the compliance credit by transfer through the compliance-credit clearance mechanism if, at the time the offer is made, they have not accepted any other offer with respect to that credit and the price offered for the transfer is equal to the amount determined by the formula

(2) Subsection 112(4) of the Regulations is replaced by the following:

Prohibition

(4) However, the participant must not accept an offer to acquire the compliance credit if the amount offered for the transfer is higher than the amount determined in accordance with subsection (3).

29 Paragraph 114(1)(a) of the English version of the Regulations is replaced by the following:

• (a) the person is an agent of His Majesty in right of Canada or an agent or mandatary of His Majesty in right of a province or the person is a non-profit corporation that is established by or under a law of Canada or of a province; and

30 Paragraph 115(1)(b) of the Regulations is replaced by the following:

• (b) the seventh anniversary of the day on which the contribution is made, in any other case.

31 Paragraphs 116(c) and (d) of the Regulations are replaced by the following:

• (c) in the case of a program that has received contributions since its registration, the person who administers the program fails to submit to the Minister, no later than the December 31 following the end of the compliance period during which contributions are made to the program for the purposes of subsection 13(3) or 14(3), a report with respect to the operation of the program during the compliance period that contains the information referred to in Schedule 10;
• (d) in the case of a program that has used contributions to fund at least one project since it was registered, the person who administers the program fails to make publicly available, no later than the December 31 following the end of the compliance period during which the contributions are made to the program, the information referred to in section 2 of Schedule 10;

32 (1) Subsection 118(2) of the English version of the Regulations is replaced by the following:

Receipt

(2) A primary supplier who creates compliance credits by contributing to an emission-reduction funding program must provide to the Minister, with the report they submit under section 127 or 128, as the case may be, a receipt issued by the program that establishes that they made the contribution.

(2) The portion of subsection 118(3) of the Regulations before the formula is replaced by the following:

Compliance credits created

(3) The number of compliance credits that the primary supplier may create under subsection 19(2) for a compliance period is determined by the formula

33 Subsection 119(2) of the Regulations is repealed.

34 Subsection 120(1) of the Regulations is replaced by the following:

Annual credit-creation report

120 (1) A registered creator must submit to the Minister, no later than the April 30 of the calendar year that follows the end of a compliance period, a report respecting the creation of compliance credits for that compliance period under paragraph (1)(a), subparagraph 19(1)(d)(i), (ii), (iv) or (v), paragraph 19(3)(a), subparagraph 19(3)(c)(i) or (iii) or paragraph 20(a).

35 The portion of subsection 121(1) of the Regulations before paragraph (a) is replaced by the following:

Quarterly credit-creation reports

121 (1) A registered creator must submit to the Minister within the following time limits the following reports respecting the creation of compliance credits during a compliance period under paragraph 19(1)(b) or (c), subparagraph 19(1)(d)(iii), paragraph 19(3)(b), subparagraph 19(3)(c)(ii) or paragraph 20(b) or (c):

36 Subsection 122(1) of the Regulations is replaced by the following:

Credit-adjustment report

122 (1) A registered creator must submit to the Minister, no later than the June 30 of the calendar year that follows the end of each compliance period, a report on any adjustment that must be done to the number of compliance credits that may have been created as a result of activities that took place during the compliance period, or a report that demonstrates that no adjustment must be done.

37 Subsection 123(1) of the Regulations is replaced by the following:

Carbon-intensity-pathway report

123 (1) A registered creator, carbon intensity contributor or foreign supplier who obtains approval of the carbon intensity of a fuel, energy source or material input under subsection 85(1), other than a carbon intensity determined in accordance with section 77, must submit to the Minister, for the compliance period during which the approval is obtained and for each compliance period that follows, a carbon-intensity-pathway report no later than the April 30 that follows the end of that compliance period.

Exception

(1.1) However, the registered creator, carbon intensity contributor or foreign supplier is not required to submit a carbon-intensity-pathway report in respect of a carbon intensity that is not valid if no compliance credits were created using that carbon intensity during that compliance period.

38 The Regulations are amended by adding the following after section 128:

Re-submission of report

128.1 (1) A primary supplier or registered creator must, within 60 days after the day on which they learn of an error made in a report that they submitted under these Regulations, other than a report submitted under section 121, submit to the Minister a report in which the error has been corrected if the error exceeds the significance threshold provided in the Methods for Verification and Certification.

Optional re-submission

(2) A primary supplier or registered creator may, within 60 days after the day on which they learn of an error made in a report that they submitted under these Regulations, other than a report submitted under section 121, submit to the Minister a report in which the error has been corrected if the error does not exceed the significance threshold provided in the Methods for Verification and Certification.

Deposit of credits

(3) If the primary supplier or registered creator submits a corrected report within 24 months of the day on which the original report was required to be submitted and the Minister is satisfied that the corrected report demonstrates that there should be a greater number of compliance credits in an account of the primary supplier or registered creator, the Minister must deposit those compliance credits into that account and assign an identification number to each compliance credit.

39 Subsection 130(2) of the Regulations is replaced by the following:

Non-application

(2) Subsection (1) does not apply in respect of an application made under subsection 80(1) if the following criteria are met:

• (a) the application is for a carbon-intensity that is intended to replace a carbon-intensity that is no longer valid by operation of paragraph 86(1)(b) or subsection 86(6) or (7) or to replace a carbon-intensity referred to in subsection 87(1) or (2);
• (b) the application is for the approval of a carbon intensity that is specified in a carbon-intensity-pathway report submitted under subsection 123(1) that has been verified in accordance with subsection 131(1); and
• (c) the application is based on the same input data as the carbon-intensity-pathway report referred to in paragraph (b).

40 (1) Subsection 131(1) of the Regulations is replaced by the following:

Verification of reports

131 (1) A person who is required to submit a report under any of section 120, subsection 121(3), sections 122 to 125, 127 and 128 and subsection 128.1(1) must have it verified by a verification body and obtain a verification report prepared by the body.

(2) Subsection 131(2) of the Regulations is amended by striking out “or” at the end of paragraph (a) and by adding the following after paragraph (b):

• (c) in the case of a report submitted under section 127, the pool of gasoline and the pool of diesel determined in accordance with subsection 8(1) are both zero cubic metres, the reduction requirement for all previous compliance periods has been satisfied before the end of the compliance period for which the report relates, there are no compliance credits to be cancelled in accordance with section 155 and no credits were created by making a contribution to a registered emission reduction funding program during the period referred to in paragraph 118(1)(a); or
• (d) in the case of a report submitted under section 128, no compliance credits were created by making a contribution to a registered emission-reduction funding program during the period referred to in paragraph 118(1)(b).

41 Subsection 138(2) of the Regulations is replaced by the following:

Designation of accreditation body

(2) The Minister may designate an accreditation body as a designated accreditation body referred to in subsection (1) if it is a member of the Global Accreditation Cooperation Incorporated and meets the requirements set out in ISO/IEC Standard 17011.

42 (1) The portion of paragraph 141(2)(a) of the Regulations before subparagraph (i) is replaced by the following:

• (a) in the case of the verification of a report submitted under section 120, 122 or 124 that relates to low-carbon-intensity fuel that is produced using an eligible feedstock referred to in paragraph 46(1)(c),

(2) The portion of paragraph 141(2)(c) of the Regulations before subparagraph (i) is replaced by the following:

• (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 that relates to a carbon intensity determined using the Fuel LCA Model, a specialist life-cycle assessment critical reviewer who

(3) The portion of paragraph 141(2)(d) of the Regulations before subparagraph (i) is replaced by the following:

• (d) in the case of the verification of a report submitted under section 125 that indicates that a registered creator received or used revenue from transferring compliance credits or a report submitted under section 127 or 128 that indicates that a primary supplier contributed to a registered emission-reduction funding program, a specialist in financial accounting who

43 Subsections 147(5) and (6) of the Regulations are repealed.

44 Subsection 148(3) of the Regulations is replaced by the following:

Critical review

(3) The verification of an application referred to in section 130 or report submitted under section 123 that relates to a carbon intensity value determined using the Fuel LCA Model must include a critical review of the life-cycle assessment that is conducted in accordance with ISO Standard 14044.

45 (1) Paragraph 155(1)(b) of the French version of the Regulations is replaced by the following:

• b) le fournisseur principal ou le créateur enregistré qui a acquis les combustibles du créateur enregistré ayant créé les unités de conformité, dans le cas où celles-ci ont fait l’objet d’une demande visée à l’article 108 et les combustibles sont exportés par une personne qui n’est pas un fournisseur principal ou un créateur enregistré;

(2) Paragraph 155(2)(a) of the Regulations is replaced by the following:

• (a) if the cancellation request is made by a registered creator who is required to submit a report under section 122, the report that they submit under that section;
• (a.1) if the cancellation request is made by a registered creator who is not required to submit any report under section 122, the report that they submit under section 120; or

(3) Subsection 155(3) of the Regulations is repealed.

46 Section 156 of the Regulations is repealed.

47 Paragraph 158(5)(d) of the Regulations is repealed.

48 (1) Subsection 160(1) of the Regulations is replaced by the following:

Cancellation of excess credits

160 (1) The Minister must cancel the excess compliance credits, or the corresponding number of equivalent compliance credits, that are in the account of

• (a) a registered creator who indicates, in a report they submit under subsection 122(1), that the volume of fuel produced or imported is less than the volume previously reported in a report submitted under section 121 or that an actual carbon intensity reported in a report submitted under subsection 123(1) is greater than a carbon intensity approved under subsection 85(1);
• (b) a person who makes a request referred to in subsection 155(1) for the cancellation of compliance credits; or
• (c) a registered creator who sends a notice to the Minister in accordance with section 157.

Cancellation after suspension

(1.1) If, after the Minister has suspended compliance credits under subsection 158(1) or (2), an additional review by the Minister confirms that excess compliance credits were created, the Minister must cancel the excess compliance credits, or the corresponding number of equivalent compliance credits, that are in the account in which compliance credits were suspended.

(2) Subsection 160(2) of the English version of the Regulations is replaced by the following:

Insufficient number of equivalent credits

(2) If the number of excess compliance credits or equivalent compliance credits that are to be cancelled is greater than the number of such compliance credits in the account, the Minister must send a notice to the account holder that indicates the number of compliance credits that are missing.

49 The Regulations are amended by adding the following after section 160:

Clarification — related compliance credits

160.1 For greater certainty, when a compliance credit created under subsection 19(1) is suspended or cancelled, any compliance credits created under subsection 19(3) that are related to that compliance credit are also suspended or cancelled.

Equivalent compliance credit

160.2 For the purposes of sections 158 and 160,

• (a) a compliance credit created under subsection 19(1) or (3) is equivalent to any other compliance credit created under either of those subsections; and
• (b) a compliance credit created under section 20 is equivalent to any other compliance credit created under that section.

50 Subsection 161(3) of the Regulations is replaced by the following:

Volumetric correction

(3) Unless otherwise specified by a provision of these Regulations, a person who determines a volume in accordance with subsection (1) must correct the volume to standard conditions. However, a person who imports into Canada a volume of fuel may correct its volume to a temperature of 15.6°C (60°F), if the person records the correction.

51 Subsection 166(1) of the Regulations is replaced by the following:

Retention of information

166 (1) A person who is required by these Regulations to record information or keep it up to date, submit a report, request or plan or send a notice must retain a record of the information or copy of the report, request, plan or notice, as the case may be, as well as any supporting documents, for a period of 10 years after the day on which the information is recorded or updated, the report, request or plan is submitted or the notice is sent, as the case may be.

52 Section 168 of the Regulations is replaced by the following:

Information requested by Minister

168 A person who is required to retain information or documents must, on the Minister’s request, provide a copy of the information or documents to the Minister.

53 Paragraph 1(c) of Schedule 3 to the Regulations is replaced by the following:

• (c) the name, title, civic address, postal address, telephone number and email address of their authorized agent; and

54 Section 12 of Schedule 3 to the Regulations is replaced by the following:

12 If the registered creator intends to create compliance credits by displacing the use in Canada of a quantity of fuel in the liquid class as fuel for a vehicle with the use in Canada of a quantity of hydrogen, whether as an energy source for a hydrogen fuel cell vehicle or as fuel for a vehicle, the name, GPS coordinates to the fifth decimal place and, if any, civic address of each fuelling station at which the hydrogen is supplied.

55 The Regulations are amended by adding, after Schedule 3, the Schedule 3.1 set out in the schedule to these Regulations.

56 Paragraphs 1(a) to (h) of Schedule 6 to the Regulations is replaced by the following:

• (a) in the case of biogas, renewable natural gas and hydrogen that is not produced from a fossil fuel, 61 gCO₂e/MJ;
• (b) in the case of renewable propane, 67 gCO₂e/MJ; and
• (c) in the case of any other fuel,
  • (i) 80 gCO₂e/MJ, for the years 2022 and 2023,
  • (ii) 79 gCO₂e/MJ, for the year 2024,
  • (iii) 78 gCO₂e/MJ, for the year 2025,
  • (iv) 77 gCO₂e/MJ, for the year 2026,
  • (v) 76 gCO₂e/MJ, for the year 2027,
  • (vi) 74 gCO₂e/MJ, for the year 2028,
  • (vii) 73 gCO₂e/MJ, for the year 2029, and
  • (viii) 72 gCO₂e/MJ, for the year 2030 and the following years.

57 The subparagraph following subparagraph 2(a)(viii) of Schedule 6 to the English version of the Regulations is replaced by the following:

• (ix) municipal wastewater,

58 The portion of section 4 of Schedule 6 to the English version of the Regulations before paragraph (a) is replaced by the following:

4 The quantity of CO₂e that is released during the compression or liquefaction process of the fuel or material input is

59 Paragraph 5(a) of Schedule 6 to the English version of the Regulations is replaced by the following:

• (a) 25 gCO₂e/MJ for hydrogen produced from electrolysis using electricity with a carbon intensity of 30 g/MJ or less;

60 Paragraph 4(k) of Schedule 8 to the Regulations is replaced by the following:

• (k) for the fuel referred to in paragraph (f), an indication of the option used for the determination of its carbon intensity in relation to the pathway from the Fuel LCA Model, whether it is an existing pathway or a new pathway and, in the case of a new pathway, the alphanumeric identifier assigned to it under subsection 81(4) of these Regulations;

61 (1) Paragraph 2(g) of Schedule 11 to the Regulations is amended by adding the following after subparagraph (iii):

• (iii.1) the quantity of co-processed low-carbon-intensity fuel for which compliance credits have been created, as determined in accordance with the applicable emission-reduction quantification method established under subsection 31(1) or 32(1) of these Regulations,
• (iii.2) the value determined for P in the formula set out in subsection 19(4) of these Regulations;

(2) Paragraph 2(g) of Schedule 11 to the Regulations is amended by striking out “and” at the end of subparagraph (iv) and by adding the following after subparagraph (iv):

• (iv.1) if applicable, the number of related compliance credits created under paragraph 19(3)(a) of the Regulations that correspond to the compliance credits referred to in subparagraph (iv), and

62 (1) Paragraph 4(c) of Schedule 11 to the Regulations is amended by adding the following after subparagraph (iii):

• (iii.1) the value determined for P in the formula set out in subsection 19(4) of these Regulations;

(2) Paragraph 4(c) of Schedule 11 to the Regulations is amended by striking out “and” at the end of subparagraph (iii), by adding “and” at the end of subparagraph (iv) and by adding the following after subparagraph (iv):

• (v) the name, GPS coordinates to the fifth decimal place and, if any, the civic address of the facility at which the fuel is produced; and

(3) Section 4 of Schedule 11 to the Regulations is amended by adding the following after paragraph (d):

• (e) the number of provisional compliance credits created under paragraph 19(3)(c) of these Regulations that are related to compliance credits created by the use of renewable propane, co-processed low-carbon-intensity propane, compressed renewable natural gas or liquefied renewable natural gas.

63 (1) Section 7 of Schedule 11 to the Regulations is amended by striking out “and” at the end of paragraph (d) and by adding the following after paragraph (d):

• (d.1) the value determined for P in the formula set out in subsection 19(4) of these Regulations;
• (d.2) the name of the person from whom the hydrogen was purchased;
• (d.3) the name, GPS coordinates to the fifth decimal place and, if any, the civic address of the facility at which the hydrogen is produced;

(2) Section 7 of Schedule 11 to the Regulations is amended by adding “and” at the end of paragraph (e) and by adding the following after paragraph (e):

• (f) the number of provisional compliance credits created under paragraph 19(3)(c) of these Regulations that are related to compliance credits created by the use of the hydrogen.

64 (1) Section 8 of Schedule 11 to the Regulations is amended by striking out “and” at the end of paragraph (d) and by adding the following after paragraph (d):

• (d.1) the value determined for P in the formula set out in subsection 19(4) of these Regulations;
• (d.2) the name of the person from whom the hydrogen was purchased;
• (d.3) the name, GPS coordinates to the fifth decimal place and, if any, the civic address of the facility at which the hydrogen is produced;

(2) Section 8 of Schedule 11 to the Regulations is amended by adding “and” at the end of paragraph (e) and by adding the following after paragraph (e):

• (f) the number of provisional compliance credits created under paragraph 19(3)(c) of these Regulations that are related to compliance credits created by the use of the hydrogen.

65 (1) Paragraph (e) of Section 2 of Schedule 12 to the Regulations is replaced by the following:

• (e) the region in which the feedstock was processed and the region in which the feedstock or a material from which it was processed was harvested, produced, extracted or collected;

(2) Section 2 of Schedule 12 to the Regulations is amended by adding the following after paragraph (g):

• (g.1) the value determined for P in the formula set out in subsection 19(4) of these Regulations;

(3) Section 2 of Schedule 12 to the Regulations is amended by striking out “and” at the end of paragraph (h), by adding “and” at the end of paragraph (i) and by adding the following after paragraph (i):

• (j) the number of provisional compliance credits created under paragraph 19(3)(b) of these Regulations by the production of the fuel in Canada.

66 (1) Paragraph (h) of Section 3 of Schedule 12 to the Regulations is amended by striking out “and” at the end of subparagraph (iii) and by adding the following after subparagraph (iii):

• (iii.1) the value determined for P in the formula set out in subsection 19(4) of these Regulations,

(2) Paragraph 3(h) of Schedule 12 to the Regulations is amended by striking out “and” at the end of subparagraph (iii) and by adding the following after subparagraph (iv):

• (v) the number of provisional compliance credits created under paragraph 19(3)(c) of these Regulations that are related to compliance credits created by the use of the renewable natural gas or renewable propane; and

67 (1) Paragraph 2(c) of Schedule 13 to the English version of the Regulations is replaced by the following:

• (c) the carbon intensity of the fuel and any alphanumeric identifier assigned to it under subsection 85(2) of these Regulations, as set out in the report submitted under subsection 121(1) of these Regulations for the same three-month period;

(2) Paragraph 2(d) of Schedule 13 to the Regulations is replaced by the following:

• (d) if the carbon intensity referred to in paragraph (c) is determined in accordance with section 76 of these Regulations and approved under subsection 85(1) of these Regulations, the carbon intensity of the fuel as set out in any carbon-intensity-pathway report submitted under subsection 123(1) of these Regulations for the same compliance period;

(3) Paragraph 2(f) of Schedule 13 to the Regulations is replaced by the following:

• (f) the region in which the feedstock was processed and the region in which the feedstock or a material from which it was processed was harvested, produced, extracted or collected;

(4) Paragraph 2(i) of Schedule 13 to the Regulations is replaced by the following:

• (i) the quantity of the fuel, expressed in cubic metres, determined in accordance with subsection 45(1) of these Regulations, that is produced for use in Canada using an eligible feedstock in order to create compliance credits during the same three-month period;

(5) Paragraphs 2(k) to (n) of Schedule 13 to the Regulations are replaced by the following:

• (k) the value determined for P in the formula set out in subsection 19(4) of these Regulations;
• (l) the total number of compliance credits created under subsection 19(1) of these Regulations to be deposited into the account of the registered creator opened under paragraph 28(a) of these Regulations and a description of the change or error, if any, which requires the adjustment of credits;
• (l.1) the total number of compliance credits created under subsection 19(3) of the Regulations to be deposited into the account of the registered creator opened under paragraph 28(a) of these Regulations and a description of the change or error, if any, which requires the adjustment of credits;
• (m) the total number of compliance credits created under subsection 19(1) of these Regulations to be cancelled from the account of the registered creator opened under paragraph 28(a) of these Regulations and a description of the change or error, if any, which requires the cancellation of credits;
• (m.1) the total number of compliance credits created under subsection 19(3) of these Regulations to be cancelled from the account of the registered creator opened under paragraph 28(a) of these Regulations and a description of the change or error, if any, which requires the cancellation of credits; and
• (n) the number of compliance credits referred to in paragraph (l) or (l.1), if any, that are to be transferred to each participant under subsection 108(1) of these Regulations and the name of that participant.

68 (1) Subparagraph 3(f)(i) of Schedule 13 to the English version of the Regulations is replaced by the following:

• (i) the carbon intensity of the fuel and any alphanumeric identifier assigned to it under subsection 85(2) of these Regulations, as set out in the report submitted under subsection 121(1) of these Regulations for the same three-month period,

(2) Subparagraphs 3(f)(ii) and (iii) of Schedule 13 to the Regulations are replaced by the following:

• (ii) if the carbon intensity referred to in subparagraph (i) is determined in accordance with section 76 of these Regulations and approved under subsection 85(1) of these Regulations, the carbon intensity set out in any report submitted under subsection 123(1) of these Regulations for the same compliance period,
• (iii) the quantity of the fuel, expressed in cubic metres or kilograms, as applicable, determined in accordance with subsection 45(1) of these Regulations that is produced for use in Canada using an eligible feedstock in order to create compliance credits under subsection 95(1) of these Regulations during the same three-month period, and

(3) Subparagraph 3(g)(iii) of Schedule 13 to the English version of the Regulations is replaced by the following:

• (iii) the carbon intensity of the fuel and any alphanumeric identifier assigned to it under subsection 85(2) of these Regulations, as set out in the report submitted under subsection 121(1) of these Regulations for the same three-month period,

(4) Subparagraph 3(g)(iv) of Schedule 13 to the Regulations is replaced by the following:

• (iv) if the carbon intensity referred to in subparagraph (iii) is determined in accordance with section 76 of these Regulations and approved under subsection 85(1) of these Regulations, the carbon intensity of the fuel as set out in any report submitted under subsection 123(1) of these Regulations for the same compliance period,

(5) Paragraph 3(g) of Schedule 13 to the Regulations is amended by striking out “and” at the end of subparagraph (v), by adding “and” at the end of subparagraph (vi) and by adding the following after paragraph (vi):

• (vii) the value determined for P in the formula set out in subsection 19(4) of these Regulations;

(6) Paragraph 3(h) of Schedule 13 to the Regulations is repealed.

(7) Subparagraphs 3(j)(i) and (ii) of Schedule 13 to the Regulations are replaced by the following:

• (i) the total number of compliance credits created under subsection 19(1) of these Regulations that are to be deposited into the account of the registered creator opened under paragraph 28(a) of these Regulations and a description of the change or error, if any, which requires the adjustment of credits, and
• (i.1) the total number of compliance credits created under subparagraph 19(3)(c)(ii) of these Regulations that are to be deposited into the account of the registered creator opened under paragraph 28(a) of these Regulations and a description of the change or error, if any, which requires the adjustment of credits, and
• (ii) the total number of compliance credits created under subsection 19(1) of these Regulations that are to be cancelled from the account of the registered creator opened under paragraph 28(a) of these Regulations, and a description of the change or error, if any, which requires the cancellation of credits,
• (iii) the total number of compliance credits created under subparagraph 19(3)(c)(ii) of these Regulations that are to be cancelled from the account of the registered creator opened under paragraph 28(a) of these Regulations, and a description of the change or error, if any, which requires the cancellation of credits; and

(8) Paragraph 3(k) of Schedule 13 to the Regulations is replaced by the following:

• (k) the number of compliance credits referred to in subparagraph (i)(i), if any, that are to be transferred to each participant under subsection 108(1) of these Regulations and the name of that participant.

69 (1) Paragraph 4(e) of Schedule 13 to the Regulations is replaced by the following:

• (e) if the carbon intensity referred to in paragraph (d) is determined in accordance with section 76 of these Regulations and approved under subsection 85(1) of these Regulations, the carbon intensity of the fuel as set out in any report submitted under subsection 123(1) of these Regulations for the same compliance period;

(2) Paragraph 4(i) of Schedule 13 to the Regulations is replaced by the following:

• (i) the quantity of the fuel, expressed in cubic metres, determined in accordance with subsection 45(1) of these Regulations, that is produced using an eligible feedstock and that is imported for use in Canada in order to create compliance credits during the same three-month period;

(3) Paragraph 4(k) of Schedule 13 to the Regulations is repealed.

(4) Paragraph 4(n) of Schedule 13 to the Regulations is replaced by the following:

• (n) the number of compliance credits referred to in paragraph (l), if any, that are to be transferred to each participant under subsection 108(1) of these Regulations and the name of that participant.

70 (1) Paragraph 5(f) of Schedule 13 to the Regulations is repealed.

(2) Subparagraph 5(h)(i) of Schedule 13 to the English version of the Regulations is replaced by the following:

• (i) the carbon intensity of the fuel and any alphanumeric identifier assigned to it under subsection 85(2) of these Regulations, as set out in the report submitted under subsection 121(1) of these Regulations for the same three-month period,

(3) Subparagraphs 5(h)(ii) and (iii) of Schedule 13 to the Regulations are replaced by the following:

• (ii) if the carbon intensity referred to in subparagraph (i) is determined in accordance with section 76 of these Regulations and approved under subsection 85(1) of these Regulations, the carbon intensity set out in any report submitted under subsection 123(1) of these Regulations for the same compliance period,
• (iii) the quantity of the fuel, expressed in cubic metres or kilograms, as applicable, determined in accordance with subsection 45(1) of these Regulations that is produced using an eligible feedstock and that was imported for use in Canada in order to create compliance credits under subsection 95(1) of these Regulations during the same three-month period, and

(4) Subparagraph 5(i)(iii) of Schedule 13 to the English version of the Regulations is replaced by the following:

• (iii) the carbon intensity of the fuel and any alphanumeric identifier assigned to it under subsection 85(2) of these Regulations, as set out in the report submitted under subsection 121(1) of these Regulations for the same three-month period,

(5) Subparagraph 5(i)(iv) of Schedule 13 to the Regulations is replaced by the following:

• (iv) if the carbon intensity referred to in subparagraph (iii) is determined in accordance with section 76 of these Regulations and approved under subsection 85(1) of these Regulations, the carbon intensity of the fuel as set out in any report submitted under subsection 123(1) of these Regulations for the same compliance period,

(6) Paragraph 5(j) of Schedule 13 to the Regulations is repealed.

(7) Paragraph 5(m) of Schedule 13 to the Regulations is replaced by the following:

• (m) the number of compliance credits referred to in each of subparagraphs (k)(i) and (l)(i), if any, that are to be transferred to each participant under subsection 108(1) of these Regulations and the name of that participant.

71 The portion of section 7 of Schedule 13 to the English version of the Regulations before paragraph (a) is replaced by the following:

7 For each three-month period during the compliance period, the following information for each quantity of electricity produced using biogas with a particular carbon intensity whose production in Canada during that compliance period resulted in the deposit of compliance credits into the account of the registered creator:

72 (1) The portion of section 8 of Schedule 13 to the Regulations before paragraph (b) is replaced by the following:

8 The following information with respect to each low-carbon-intensity fuel for which the registered creator has requested the creation of compliance credits under section 88 of these Regulations:

• (a) the carbon intensity of the fuel determined in accordance with section 76, 78 or 79 of these Regulations for which a credit adjustment is being requested under section 88 of these Regulations and the alphanumeric identifier assigned to it under subsection 85(2) of these Regulations;

(2) Subparagraph 8(b)(ii) of Schedule 13 to the Regulations is replaced by the following:

• (ii) the period referred to in subsection 88(1.1) of these Regulations during which the temporarily approved carbon intensity was used to create compliance credits,

(3) Paragraph 8(b) of Schedule 13 to the Regulations is amended by adding “and” at the end of subparagraph (iv) and by replacing subparagraphs (v) and (vi) by the following:

• (v) if the fuel was produced in Canada, the value determined for P in the formula set out in subsection 19(4) of these Regulations for each quarter referred to in subparagraph (ii);

(4) Subparagraph 8(c)(ii) of Schedule 13 to the Regulations is replaced by the following:

• (ii) the period referred to in subsection 88(1.1) of these Regulations during which the carbon intensity was used to create compliance credits,

(5) Paragraph 8(c) of Schedule 13 to the Regulations is amended by adding “and” at the end of subparagraph (iv) and by replacing subparagraphs (v) and (vi) by the following:

• (v) if the fuel was produced in Canada, the value determined for P in the formula set out in subsection 19(4) of these Regulations for each quarter referred to in subparagraph (ii);

(6) Subparagraph 8(d)(ii) of Schedule 13 to the Regulations is replaced by the following:

• (ii) the period referred to in subsection 88(1.1) of these Regulations during which the carbon intensity was used to create compliance credits,

(7) Paragraph 8(d) of Schedule 13 to the Regulations is amended by adding “and” at the end of subparagraph (iv) and by replacing subparagraphs (v) and (vi) by the following:

• (v) if the fuel was produced in Canada, the value determined for P in the formula set out in subsection 19(4) of these Regulations for each quarter referred to in subparagraph (ii);

(8) Section 8 of Schedule 13 to the Regulations is amended by adding the following after paragraph (d):

• (e) the number of compliance credits, if any, determined in accordance with subsection 88(2) of these Regulations, that are to be deposited into any account of the registered creator opened under section 28 of these Regulations for the period referred to in subsection 88(1.1) of these Regulations;
• (f) the number of compliance credits, if any, determined in accordance with subsection 19(4) of these Regulations, that are to be deposited into the account of the registered creator opened under paragraph 28(a) of these Regulations for the period referred to in subsection 88(1.1) of these Regulations; and
• (g) the number of compliance credits, if any, that are to be transferred to each participant under subsection 108(1) of these Regulations and the name of that participant.

73 Section 9 of Schedule 13 of the Regulations is replaced by the following:

9 The following information with respect to each low-carbon-intensity fuel for which the registered creator has requested the creation of compliance credits under section 90 of these Regulations:

• (a) the carbon intensity of the fuel determined in accordance with any of sections 76 to 79 of these Regulations and approved on or after July 1, 2024 under subsection 85(1) of these Regulations for which a credit adjustment is being requested under section 90 of these Regulations and the alphanumeric identifier assigned to it under subsection 85(2) of these Regulations;
• (b) the following information in the case of a fuel that was used to create compliance credits using a carbon intensity that was determined in accordance with any of sections 76 to 79 of these Regulations and approved before July 1, 2024 under subsection 85(1) of these Regulations:
  • (i) the value of that carbon intensity and the alphanumeric identifier assigned to it under subsection 85(2) of these Regulations,
  • (ii) the period referred to in subsection 90(1) of these Regulations during which that carbon intensity was used to create compliance credits,
  • (iii) the quantity of the fuel that is determined in accordance with subsection 45(1) of these Regulations, expressed in cubic metres or kilograms, that is produced using an eligible feedstock and supplied during the period referred to in subparagraph (ii),
  • (iv) the energy density of the fuel, expressed in megajoules per cubic metre or per kilogram, as set out in column 2 of Schedule 2, as set out in the Specifications for Fuel LCA Model CI Calculations or as measured in accordance with section 162 of these Regulations, at the election of the registered creator, and
  • (v) if the fuel was produced in Canada, the value determined for P in the formula set out in subsection 19(4) of these Regulations for each quarter referred to in subparagraph (ii);
• (c) in the case where its carbon intensity has been the subject of an application for temporary approval under subsection 91(1) of these Regulations,
  • (i) any carbon intensity that has been temporarily approved under subsection 91(4) of these Regulations and any alphanumeric identifier assigned to it under subsection 91(5) of these Regulations,
  • (ii) the period referred to in subsection 90(1) of these Regulations during which the temporarily approved carbon intensity was used to create compliance credits,
  • (iii) the quantity of fuel that is determined in accordance with subsection 45(1) of these Regulations, expressed in cubic metres or kilograms, that is produced using an eligible feedstock and supplied during the period referred to in subparagraph (ii),
  • (iv) its energy density, expressed in megajoules per cubic metre or per kilogram, as set out in column 2 of Schedule 2, as set out in the Specifications for Fuel LCA Model CI Calculations or as measured in accordance with section 162 of these Regulations, at the election of the registered creator, and
  • (v) if the fuel was produced in Canada, the value determined for P in the formula set out in subsection 19(4) of these Regulations for each quarter referred to in subparagraph (ii);
• (d) in the case where its carbon intensity that was used to create compliance credits is the carbon intensity referred to in paragraph 75(1)(a) of these Regulations,
  • (i) its carbon intensity,
  • (ii) the period referred to in subsection 90(1) of these Regulations during which the carbon intensity was used to create compliance credits,
  • (iii) the quantity of fuel that is determined in accordance with subsection 45(1) of these Regulations, expressed in cubic metres or kilograms, that is produced using an eligible feedstock and supplied during the period referred to in subparagraph (ii),
  • (iv) its energy density, expressed in megajoules per cubic metre or per kilogram, as set out in column 2 of Schedule 2, as set out in the Specifications for Fuel LCA Model CI Calculations or as measured in accordance with section 162 of these Regulations, at the election of the registered creator, and
  • (v) if the fuel was produced in Canada, the value determined for P in the formula set out in subsection 19(4) of these Regulations for each quarter referred to in subparagraph (ii);
• (e) in the case where its carbon intensity is determined in accordance with paragraph 75(1)(b) of these Regulations,
  • (i) its carbon intensity and the alphanumeric identifier assigned to it under subsection 85(2) of these Regulations,
  • (ii) the period referred to in subsection 90(1) of these Regulations during which the carbon intensity was used to create compliance credits,
  • (iii) the quantity of fuel that is determined in accordance with subsection 45(1) of these Regulations, expressed in cubic metres or kilograms, that is produced using an eligible feedstock and supplied during the period referred to in subparagraph (ii),
  • (iv) its energy density, expressed in megajoules per cubic metre or per kilogram, as set out in column 2 of Schedule 2, as set out in the Specifications for Fuel LCA Model CI Calculations or as measured in accordance with section 162 of these Regulations, at the election of the registered creator, and
  • (v) if the fuel was produced in Canada, the value determined for P in the formula set out in subsection 19(4) of these Regulations for each quarter referred to in subparagraph (ii);
• (f) the number of compliance credits, determined in accordance with subsection 90(2) of these Regulations, that are to be deposited into any account of the registered creator opened under section 28 of these Regulations for the period referred to in subsection 90(1) of these Regulations;
• (g) the number of compliance credits, determined in accordance with subsection 19(4) of these Regulations, that are to be deposited into the account of the registered creator opened under paragraph 28(a) of these Regulations for the period referred to in subsection 90(1) of these Regulations; and
• (h) the number of compliance credits, if any, that are to be transferred to each participant under subsection 108(1) of these Regulations and the name of that participant.

74 Section 5 of Schedule 15 to the Regulations is replaced by the following:

5 The alphanumeric identifier assigned to the carbon intensity of the low-carbon-intensity fuel under subsection 85(2) of these Regulations or the default carbon intensity that is referred to in section 1 of Schedule 6 whichever is applicable.

75 Paragraph 7(b) of Schedule 15 to the Regulations is replaced by the following:

• (b) the quantity of the low-carbon-intensity fuel produced using eligible feedstock for the purpose of creating compliance credits or to be imported into Canada for the purpose of creating compliance credits;

76 Paragraph 8(c) of Schedule 15 to the Regulations is replaced by the following:

• (c) the total quantity of the low-carbon-intensity fuel expressed in kilograms, in the case of liquefied renewable natural gas or hydrogen, or in cubic metres, in any other case, that was produced from eligible feedstock and supplied to the person who imports the fuel into Canada for the purpose of creating compliance credits.

77 (1) Paragraph 2(a) of Schedule 17 to the Regulations is replaced by the following:

• (a) in the case of a report submitted by a registered creator, the number of those compliance credits that that registered creator created as provisional compliance credits during the compliance period;

(2) Paragraph 2(b) of Schedule 17 to the English version of the Regulations is replaced by the following:

• (b) the number of those compliance credits that the registered creator or primary supplier transferred in accordance with subsection 106(5) of these Regulations during the compliance period;

(3) Paragraph 2(d) of Schedule 17 to the Regulations is replaced by the following:

• (d) in the case of a report submitted by a registered creator, the number of those compliance credits that were transferred from that registered creator’s accounts in accordance with subsection 108(1) of these Regulations during the compliance period;

(4) Paragraph 2(f) of Schedule 17 to the Regulations is repealed:

(5) Section 2 of Schedule 17 to the Regulations is amended by striking out “and” at the end of paragraph (h), by adding “and” at the end of paragraph (i) and by adding the following after paragraph (i):

• (j) in the case of a report submitted by a primary supplier, the number of those compliance credits, if any, that were transferred to that primary supplier during the compliance period preceding the current compliance period in accordance with subsection 112(1) of these Regulations.

78 Paragraphs 7(a) and (b) of Schedule 19 to the Regulations are replaced by the following:

• (a) the number of compliance credits that they must use in accordance with subsection 18(3) of these Regulations in order to satisfy the deferred portion of the reduction requirements for each previous compliance period in accordance with subsection 16(3) of these Regulations;
• (b) the number of each of the specific types of compliance credits that are referred to in subsection 106(3) of these Regulations that they must use in accordance with subsection 18(3) of these Regulations; and

79 Paragraph 1(d) of Schedule 20 to the Regulations is replaced by the following:

• (d) the address of the office of the Department of the Environment to which the verification report is sent; and

80 The Regulations are amended by replacing “ISO Standard 14064-3:2019” with “ISO Standard 14064-3” in the following provisions:

• (a) paragraph 148(1)(a);
• (b) the portion of section 149 before paragraph (a);
• (c) the portion of section 150 before paragraph (a);
• (d) the portion of subsection 152(1) before paragraph (a), the marginal note to subsection 152(2) and the portion of subsection 152(2) before paragraph (a);
• (e) subparagraph 1(b)(iv) of Schedule 20.

Environmental Violations Administrative Monetary Penalties Act

Environmental Violations Administrative Monetary Penalties Regulations

81 (1) Division 18 of Part 5 of Schedule 1 to the Environmental Violations Administrative Monetary Penalties Regulations ^{footnote 25} is amended by adding the following after item 13:

Item	Column 1 Disposition	Column 2 Type de violation
13.1	14(3.1)	B

(2) Division 18 of Part 5 of Schedule 1 to the Regulations is amended by adding the following after item 16:

Item	Column 1 Disposition	Column 2 Type de violation
16.1	15(2.1)	B

(3) Items 40 and 41 of Division 18 of Part 5 of Schedule 1 to the Regulations are replaced by the following :

Item	Column 1 Disposition	Column 2 Type de violation
39.1	106(2.1)	A
39.2	106(2.2)	A
40	108(3)	A
41	108(4)	A

(4) Division 18 of Part 5 of Schedule 1 to the Regulations is amended by adding the following after item 70:

Item	Column 1 Disposition	Column 2 Type de violation
70.1	128.1(1)	B

(5) Items 82 and 83 of Division 18 of Part 5 of Schedule 1 to the Regulations are repealed.

Coming Into Force

82 These Regulations come into force on the day on which they are registered.

SCHEDULE

(Section 55)

SCHEDULE 3.1

(Subsection 19(4))

Related Compliance Credits

TABLE 1

Co-processed Low-Carbon-Intensity Fuel

Item	Column 1 Fuel	Column 2 Factor
1	Gasoline	0.3
2	Diesel	0.4
3	Fuel suitable for use in aviation	0.4
4	Propane	0.3

TABLE 2

Other Low-Carbon-Intensity Fuels

Item	Column 1 Fuel	Column 2 Factor
1	Hydrogenation-derived renewable diesel	0.5
2	Fuel suitable for use in aviation	0.8
3	Biodiesel	0.4
4	All other fuels that are described in paragraph 19(1)(c) of these Regulations	0.3
5	Renewable propane	0.4
6	Renewable natural gas, compressed renewable natural gas or liquefied renewable natural gas	0.4
7	Hydrogen	0.4

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