![]() Canada is middle of the pack in terms of global fuel costs, and the policy's impact on prices is relatively small compared to oil price volatility, Plumptre said, noting that by 2030 the fuel standard is expected to add 4 to 11 Canadian cents to gas prices and 4 to 13 Canadian cents to diesel prices. On the whole, Plumptre doubted the added cost of the regulations would put Canada at a huge disadvantage. they're going to push the country further off course for the type of economic growth that we need to see in clean energies in the post-2030 period." "There have been many exemptions and flexibilities already introduced to the policy, which have significantly undermined its original intent," Plumptre said in an interview. The final regulations are expected in spring.Ī spokesperson for Canada's Minister of Environment and Climate Change Steven Guilbeault did not answer emailed questions about the potential impact of the clean fuel standard on the mining sector.īut watering down the clean fuel standard to allay industry concerns over competitiveness would overly weaken the regulation's impact on Canada's carbon emissions and energy transition, said Bora Plumptre, a senior analyst with the Pembina Institute, a clean-energy think tank. The clean fuel standard will add about $50/t in carbon equivalent costs, on top of the $170/t carbon tax by the start of the next decade, said Marshall, who hopes the federal government will make changes to the new rules before they are published. Without them, the industry might close mines or avoid building new ones and instead invest in jurisdictions where weaker carbon emissions rules lead to lower production costs. The EITE industry protections lessen carbon-tax pain for miners in many Canadian provinces and territories by setting a baseline for an industry's carbon intensity and exempting tax payment on a portion of emissions to help stem so-called carbon leakage from Canada's mining sector. The minimum federal carbon tax is set to increase from $40 per tonne to $50/t of carbon dioxide equivalent on April 1 and increase $15/t per year until it reaches $170/t in 2030. In part because of EITE provisions, the Mining Association of Canada has broadly supported the country's carbon tax system, which is among the world's most stringent. It requires primary fuel suppliers, including producers and importers, to reduce carbon intensity by blending in biofuels, buying emissions credits, or other innovations in oil production and refining. The new fuel regulation is set to chop the carbon intensity of gasoline and diesel in Canada by about 13% by 2030 relative to 2016 levels, according to the Canadian government. "We're going to lose production, which will get absorbed elsewhere, almost inevitably at a higher carbon intensity," Brendan Marshall, vice president of economic and northern affairs with the Mining Association of Canada, said in an interview. For carbon taxes in Canada, which are a blend of provincial and federal policies, there are typically provisions to lessen the burden on energy-intensive trade-exposed, or EITE, industries. ![]() Source: Suncor Energy Inc.Ī new Canadian clean fuel standard set to come into force in December 2022 could hurt Canada's mining competitiveness and divert investments in the sector.Ī key industry concern is that, unlike Canada's carbon tax system, the clean fuel standard does not include protections for industries that sell products internationally at prices they do not control. ![]() Fossil fuel-powered trucks at Canadian mines will become more expensive to run with a new clean fuel standard. ![]()
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