An overview of Canada's proposed clean fuel standard
This policy update provides a summary of Canada’s proposed federal clean fuel standard (CFS) policy structure based on proposals and the framework document from Environment and Climate Change Canada (ECCC), as well as discussion of the potential impacts of not addressing indirect land-use change (ILUC).
Omitting ILUC is a significant methodological decision that will have a substantial impact on the effects of the policy. The omission could incentivize the production of poorer-performing fuels while depressing investment in transformative fuels that could offer steeper greenhouse gas reductions in the long-term.
The regulatory framework suggests that ILUC may be considered in a later review of the CFS, but it may be politically difficult to reduce incentives for food-based biofuels after investments have been made in the early phases of the program.