In 2022, Net-Zero is About More than Climate

Canada's long-awaited National Clean Fuel Regulations policy, while monumental, is just be one piece of the nation's energy security puzzle. Along with supporting policies, it could address climate and simultaneously support an economic transition.
By Andrea Kent | June 09, 2022

Reaching net-zero and transitioning to renewable fuels is fast becoming as much about economic and energy security as climate. Politicians need solutions, consumers want relief, and both should look to homegrown biofuels.

The world has changed a lot since February. The invasion of Ukraine, inflation hit a 40-year high, and analysts are predicting that $2-litre gas prices (roughly $6 USD a gallon) will be the “new normal” for many Canadian drivers this summer. The basic problem is not complex: prices go up when high demand meets uncertain supply. How much higher remains to be seen.

The geopolitics of oil is well understood, but so must the benefits of renewable fuels. Encouragingly, political leaders are getting on board.

The European Commission is deploying renewables to wean off Russian natural gas, and U.S. President Joe Biden has temporarily lifted the summertime ban on E15 sales. But as important as these public statements and rapid response measures are, more will need to be done. And it will be strong, stable, long-term renewable fuel policies—not quick fixes—that will make the difference.

Canada’s national Clean Fuel Regulations (CFR) policy is expected to be finalized this June (possibly before this column is published). For the biofuels industry and policymakers, the timing is good news. And the CFR could be a prime example of how to collectively address climate, protect energy security, and support the economic transition.

First, the CFR is a performance-based regulation. Done well, it will provide business and investment certainty. The CFR structure will allow the marketplace to effectively see and understand carbon intensity in fuel products. Blending more ethanol becomes an attractive option as it is both an affordable low-carbon fuel and already widely used.

Next, the CFR will work best as a complementary policy, working in concert with provincial renewable fuel blending requirements and other carbon pricing schemes. Many jurisdictions will continue to address their environmental challenges with biofuel policy, which the national CFR should not replace. The biofuels industry must keep advocating so that regional and complementary regulatory signals stay in place. This includes enforceable regional renewable fuels blending mandates, measuring carbon intensity based on sound science and real-world lifecycle assessment, and ending exemptions and subsidies that erode the market for ethanol.

And last but not least, keeping ethanol on the path to net-zero. Ethanol is already reducing greenhouse emissions by about 50 percent compared to traditional gasoline. And by implementing current technologies and proper lifecycle carbon assessment and accounting, ethanol can be a net-zero carbon emission fuel. In the CFR, lifecycle assessment must recognize this and keep pace with innovation.

As monumental and long-awaited a policy as Canada’s final CFR is, it will still be one piece of the energy security puzzle. But it stands to be a big one, and ethanol remains an ideal fit.

Author: Andrea Kent
Board Member and Past President
Renewable Industries Canada
Vice President of Industry and Government Affairs
Greenfield Global Inc.
[email protected]