We have amended the renewable fuel regulations to increase blending requirements, improve the environmental performance of fuels, and recognize emerging low carbon fuel technologies.
We have amended the renewable fuel regulations to increase blending requirements, improve the environmental performance of fuels, and recognize emerging low carbon fuel technologies. This includes changes to:
- O. Reg. 535/05 (Ethanol in Gasoline)
- O. Reg. 97/14 (Greener Diesel – Renewable Fuel Content Requirements for Petroleum Diesel Fuel)
These changes are tied with a commitment outlined in Ontario’s Climate Change Action Plan (CCAP) to provide funding to fuel distributors for high-blend sustainable biofuels and infrastructure upgrades to increase the availability and use of lower-carbon fuels.
O. Reg. 535/05 (Ethanol in Gasoline)
The changes to the existing O. Reg. 535/05 (Ethanol in Gasoline) will:
- Require gasoline suppliers to maintain an average of 10% renewable content (e.g. ethanol) in regular gasoline each calendar year, starting in 2020.
- Require the renewable content (e.g. ethanol) used for compliance to meet an average lifecycle greenhouse gas (GHG) performance benchmark of 45% fewer GHG emissions than petroleum gasoline, assessed across the fuel’s full well-to-wheels lifecycle from extraction or cultivation to processing, distribution and end-use combustion. This is determined in combination with the 10% average content, starting in 2020.
- Remove the existing incentive or multiplier for cellulosic ethanol, and enable all better GHG-performing or advanced bio-based fuels by allowing GHG performance to be assessed on a facility basis.
- Introduce compliance requirements for fuel volumes sold in or distributed from Northern Ontario, starting in 2023.
- Change the regulation’s name to “Greener Gasoline: Bio-based Content Requirements for Gasoline” to reflect the broader range of advanced biofuels eligible for compliance.
O. Reg. 97/14 (Greener Diesel – Renewable Fuel Content Requirements for Petroleum Diesel Fuel)
The changes to the existing O. Reg. 97/14 (Greener Diesel – Renewable Fuel Content Requirements for Petroleum Diesel Fuel) will:
- Create an incentive for emerging renewable fuel technologies, such as biocrude, by allowing it as a compliance option.
Using the Natural Resources Canada “GHGenius” Model
To determine GHG performance, fuel suppliers will use GHGenius, a lifecycle model sponsored by Natural Resources Canada. Ontario’s fuel suppliers are familiar with this model as it is already used for GHG performance determination in O. Reg. 97/14 (Greener Diesel – Renewable Fuel Content Requirements for Petroleum Diesel Fuel).
An alternative approved method will be used for biocrude – a renewable feedstock that can displace petroleum crude oil – and other fuels and production processes that are not yet part of the GHGenius model.
The references to years in the titles of the ASTM and CGSB standards found in both regulations will be removed.
Analysis of Regulatory Impact
There are substantial benefits to the amendments. It is estimated that Ontario’s fossil fuel suppliers may incur some administrative costs to comply with the amended gasoline regulation starting in 2020. It is anticipated that recognizing more fuel technologies (e.g. renewable gasoline, biocrude) will provide fuel suppliers with greater flexibility to choose the most economical compliance pathway.
The Ministry estimates that the additional annual administrative costs to all fossil fuel suppliers combined, will be $1,600 beginning in 2020 as a result of the amendments. Changes to gasoline retail prices are expected to be minimal, generally imperceptible to fuel users relative to other day-to-day market fluctuations. Experience in Ontario and other provinces (British Columbia, Alberta, Saskatchewan, and Manitoba) indicate no observable price impact from the implementation of similar transportation fuel policies, based on a comparison of retail pricing before and after implementing renewable fuel policies.
No increase to the price of diesel fuel is anticipated as a result of the amended diesel regulation. It is anticipated that recognizing biocrude as a compliance option will provide fuel suppliers with greater flexibility to choose the most economical compliance pathway.