Pollution Probe Comments on…

Pollution Probe Comments on the Ontario Ministry of the Environment and Climate Change’s Discussion Paper: Developing a modern renewable fuels standard for gasoline in Ontario

Pollution Probe supports the Government of Ontario’s efforts to reduce the carbon intensity of gasoline sold in the province by 5% by 2020. As greenhouse gas (GHG) emissions resulting from transportation are the single biggest source of emissions in the province (accounting for 35% of total emissions in 2014), and as lower-carbon alternatives to fossil gasoline are becoming increasingly available, targeting the transportation sector for emissions reductions is an appropriate and necessary step towards achieving longer-term provincial GHG reduction goals.

1. a) Ontario has existing content requirements for ethanol in gasoline. What minimum level of ethanol blending and GHG performance would help support the objectives of the RFS?

For the reasons expressed below in response to question 5. a), Ontario’s minimum blending level for ethanol in gasoline should be harmonized with that of other provinces under federal biofuels regulations. A national minimum blending level will ease the administrative and technical burdens associated with compliance across the country, not only for fuel suppliers, but for policy-makers as well.

National minimum ethanol blend rates can also be built into the carbon intensity baselines for fuels produced and used in Canada, helping to avoid the risk of double-counting certain factors when calculating carbon intensity numbers.

b) Given Ontario’s GHG reduction targets for 2030 and 2050, what factors should be considered in setting RFS targets post-2020?

In the post-2020 timeframe, incentives for the development of advanced biofuels such as cellulosic ethanol should be maintained and enhanced. The contribution of advanced biofuels to GHG emissions reductions in the transportation sector should be expected to grow beyond 2020 and increasingly supplant the contribution of first-generation biofuels. Because advanced biofuels tend to have a lower carbon intensity than first generation biofuels, more ambitious targets should be pursued in the post-2020 timeframe.

Given its extensive natural resource base and large petro-chemical sector, Ontario is well-situated to benefit from the development of advanced biofuels, not only from an environmental perspective, but economically as well.

2. a) Should activities to lower the carbon intensity of other conventional transportation fuels be eligible for compliance purposes?

Provided that such compliance activities are part of the province’s RFS regulatory framework, are verifiable, and lead to real reductions in the amount of GHGs being released into the atmosphere, Pollution Probe supports their eligibility under an RFS. All compliance flexibilities should be reviewed and updated on a regular basis. Further, a cap could be considered for determining the maximum contribution of compliance flexibilities towards meeting emissions reduction targets.

b) Should investments in low-carbon transportation projects also be eligible for compliance purposes? If yes, what types of transportation projects?

Allowing investments in low-carbon transportation projects, such as refuelling infrastructure for zero-emission vehicles, to be eligible for compliance purposes could be beneficial, as it could lead to both a wider availability of green refueling infrastructure and economic growth within companies that supply, install and maintain that infrastructure. Policy-makers should ensure that any investments in low-carbon transportation projects that are claimed for compliance purposes would not have been made in the absence of an RFS or related legislation, especially in light of a possible compliance credit-trading system that might include participants who are not fuel suppliers. Any compliance credit trading system should be regulated by the Government of Ontario to ensure that the credits and emissions reductions that are claimed are real, verifiable, and void of fraudulent activities. Allowing low-carbon transportation projects to be eligible for compliance purposes will potentially add a high degree of subjectivity and complexity for both the regulatees and the regulator. An alternative measure could be to fund low-carbon transportation projects with revenues earned from fuel suppliers who fail to meet reduction targets.

3. a) Should an RFS consider impacts from indirect land-use changes (ILUC) even though science in this area continues to evolve? If so, how?

Yes. By not integrating ILUC into an RFS framework, Ontario would essentially be supporting the position that there are no ILUC impacts associated with renewable fuels policies and developments. This is clearly not the case. While it is true that the science around ILUC impact calculations is evolving, and the variables involved in the calculations are complex and many, this lack of certainty and inherent complexity do not justify the exclusion of ILUC from an RFS framework.

One could make similar claims about the science of climate change and associated predictive models which inform decision-making to a large degree. That science is also evolving, and less-than certain, but it also represents humanity’s best possible efforts at quantifying factors that are known to have significant impacts. If governments choose to wait for scientific or statistical certainty on such issues, by the time that certainty materializes (if ever) it will be too late to effectively engage in mitigation measures to limit impacts. A better approach would be to begin accounting for ILUC impacts as soon as possible, and begin undertaking actions to mitigate known and emerging impacts as understanding around them matures.

Thus, in the early stages of accounting for ILUC impacts, a broad and adaptable regulatory framework guided by foundational principles and global best practices should inform government action with respect to ILUC and renewable fuel production. Acknowledging that ILUC impacts resulting from renewable fuel policies and practices do exist, yet likewise acknowledging that the scope and scale of such impacts is uncertain, a potential approach from government could also be to place a cap on the contribution that first-generation biofuels can make towards achieving targeted emissions reductions.

Further, as a secondary objective of an RFS should be sustainable economic development in Ontario, capping the contribution that can be made with first-generation biofuels would serve as a catalyst to incent the development of more sustainable advanced biofuels, using feedstocks, knowledge, processes and labour sourced from Ontario. Greater public investments and policy certainty for advanced biofuels will help to lay the foundation for an advanced biofuels market in the province, and will establish conditions in which innovation and research can thrive.

GHGenius, if chosen to be the most appropriate lifecycle assessment (LCA) tool for Ontario, must be incorporated into the regulatory framework. To ensure that the province has a comprehensive set of sustainability criteria and accounts for ILUC considerations appropriately, GHGenius should be modified before it can be incorporated into legislation. To guide such a modification process, Ontario should look to best practices in global and national jurisdictions and should also strive to tap into the LCA expertise present in many of the province’s post-secondary institutions and NGOs.

4. a) What measures can be taken to increase transparency and support business decision making under an RFS (e.g., an information registry, bulletins, guidance material)?

With regard to the transparency of the RFS, all enforcement and compliance actions taken under the regulation should be made publicly available to highlight the successes and failures of RFS parties. Regular public reporting on results achieved from the RFS in terms of GHG emissions reductions and compliance activities must be implemented to ensure transparency for the public and stakeholders.

5. a) What other considerations should be included in this discussion?

A major consideration that should be factored into the development of Ontario’s RFS is the timeline and scope of Environment and Climate Change Canada’s Clean Fuel Standards (CFS). Preliminary discussions with private and public sector stakeholders in regard to the federal CFS have indicated that the standards will be finalized in the mid-2019 timeframe. Stakeholders from a wide variety of sectors have stressed the need for the harmonization of provincial and federal fuels standards. National harmonization is seen as a key enabler of clear and efficient compliance with such standards, as fuel suppliers and their customers tend to have production, processing and distribution networks that are national, if not continental, in scope.

Harmonization will also allow Canada’s private sector to comply with and contribute to emissions reductions in a clear and effective manner, and will create uniform conditions for compliance across the country that will lead to market certainty with respect to low-carbon fuels development, helping to facilitate the long-term investments that will lead to innovation and economic growth in Ontario and throughout Canada. Harmonization will reduce the administrative burdens associated with compliance on all public and private sector stakeholders, which will allow their organizations to dedicate more attention to the primary objective of developing innovative means by which to reduce GHG emissions.

Currently, much of Ontario and Canada’s private sector is in a position wherein it is forced to comply with a patchwork of related yet distinct low-carbon legislation across the country, and this consumes valuable time and resources and distracts stakeholders from the core task at hand. Harmonization will also facilitate credit trading and complementary compliance flexibilities to take place from coast to coast to coast, which will offer companies a broader market in which to operate and will avoid putting provinces in a position where they are competing with each other to attract business and investment (which can lead to certain industries gravitating to jurisdictions with the weakest GHG reduction targets or environmental standards). In considering harmonization as a principle, the integration of vehicle and fuels regulations and standards must also be considered, and a consistent and uniform set of national regulations and standards governing transportation should be a fundamental goal towards which Ontario strives. As it develops its RFS for gasoline, Ontario should thus endeavor to work closely with other provinces and the federal government.

[Original Comment ID: 208685]