Through media briefs, we aim to provide useful factual and contextual information related to Canada’s clean energy transition. Please use this as a resource, and let us know if there are any topics that you would like to see for future media briefs.

U.S. tariff uncertainty, paused government rebates, and Canada’s relatively limited EV market have caused Canada’s EV transition to hit a snag: while EVs are projected to make up a record one in four new cars sold globally this year, Canadian sales fell 23% in the first quarter and 34% in the second compared to last. Pointing to this slowdown, Honda and others have delayed their Canadian EV production plans. 

The EV Availability Standard, designed to boost domestic competition by encouraging automakers to supply more zero-emission models over time, was set to take effect with the 2026 model year but has now been paused for review. As the federal government evaluates the policy, this brief explores what it is, how similar standards work elsewhere, and how Canada’s version could be adjusted to expand affordable choice for Canadian drivers.

What is it?

• The EV Availability Standard is a consumer-first policy that requires carmakers to sell an increasing share of electric vehicles in Canada. Its purpose, as its name suggests, is to incentivize automakers to make available better and more affordable zero-emission options over time in order to meet specified targets (originally starting from 20% for the 2026 model year, with interim targets before reaching 100% by 2035). The standard is currently paused for review, meaning the 2026 target does not currently apply. 

How does it benefit Canadians?

• The EV Availability Standard helps Canadians access the best makes and models available globally by incentivizing carmakers to prioritize the Canadian market when deciding where to send their EVs.
  • For instance, Canada will be the only market in North America to get Kia’s new EV5. Drivers in the U.S. will not be able to buy one. 
• It also helps drive down the average price of EVs in the country by encouraging a greater supply of lower-priced models to meet more of the market.
  • One 2022 study by Environmental Defence finds that Canada’s EV Availability Standard would reduce the median price of electric vehicles by 20% in 2035. 
  • A 2025 market survey of major metro regions in the country by Clean Energy Canada and Abacus Data finds that most Canadians are unwilling to spend more than $40,000 on a new EV. 

Does it work? 

• Jurisdictions with EV sales regulations in place tend to have significantly higher levels of EV adoption and regularly get the newest makes and models before others. 
  • In 2024, EVs accounted for 33% of new car sales in Quebec and 23% of new car sales in B.C., compared to the national average of 15% (and 8% in Ontario). The Fiat 500e, Jeep Wagoneer S,  and even the Ontario-built electric Dodge Charger were made available for purchase exclusively in Quebec and B.C. before other provinces. Both provinces have had legislated EV sales regulations in place, respectively, since 2016 and 2019. 
  • Global findings are similar. One 2021 U.S.-focused study finds that states with EV mandates have more models available than those without. Meanwhile, the EU—which has tailpipe emission standards that are so stringent that they effectively act as a ZEV mandate—has many more EV models on offer than any other major Western market (a recent Clean Energy Canada analysis finds that the EU has 21 EV models available under the price point of $40,000 Canadian, while Canada only has one). China’s ZEV mandate has also significantly boosted domestic sales and model availability (nearly 60% of all vehicle models on offer today are electric).

How does it differ from tailpipe emission standards? Could Canada achieve its goals via tailpipe emission standards instead?

• Some have suggested Canada’s U.S.-aligned tailpipe emission standards could alone achieve similar goals. While that may have been possible (U.S. emissions standards are reasonably ambitious), soon there will very likely not be any U.S. standards for Canada to align with.
  • The Trump administration is in the process of trying to scrap its standards as well as the EPA’s authority to regulate greenhouse gas emissions altogether. As a result, any calls from industry that Canada should “align with the U.S.” would mean we do nothing to regulate emissions from passenger vehicles. 
• Canada’s EV Availability Standard, prior to its recent pause, stood as the only sure policy Canada had to shape the country’s vehicle mix beyond 2026.

Does it include a ‘$20K tax on gas cars’? 

• No. This frequently misrepresented figure comes from a part of the regulation that allows carmakers to count investments in charging infrastructure as credits towards their EV targets. For each $20,000 investment in new fast-chargers, carmakers can earn one credit. Carmakers can only use this option to meet a maximum of 10% of their EV target in any given year. Charging investments are a compliance flexibility, not a penalty or requirement. Under the federal regulation, carmakers are not subject to any defined monetary fines for failing to meet their EV sales targets. 

What are other ways carmakers can meet their targets?

• Besides charging investment credits (see above), carmakers have many other ways to meet EV sales targets under the policy. 
  • Those already selling EVs in the model years preceding any sales requirements (2024, 2025) can earn “Early Action Credits” they can use to meet future requirements.
  • Similarly, carmakers can exceed their EV quotas in any given year and “bank” those credits for use in future years or sell them to carmakers who need them.
  • Carmakers are also granted a grace period of three years—that is, if a carmaker falls short of its target in any given year, it has three years to make up that deficit by selling more EVs than it needs to in future years. This means that, if the first year of requirements will now be 2027, carmakers could choose to not sell a single EV until 2029.  
• B.C. and Quebec are jurisdictions where such flexibilities have proven successful. Despite both provinces setting more ambitious targets than Canada’s (26% and 33% by 2026), carmakers have never fallen out of compliance in either province.
  • In Quebec, for example, the EV credit market is so oversupplied with credits carmakers earned between 2014 (when Early Action Credits first became available) and 2023 that carmakers would be able to meet their total combined 2024 targets even if they didn’t sell a single EV that year.

Does it ban all sales of vehicles with a gas tank?

• No. New plug-in hybrid electric vehicles (vehicles with a gas tank and an external plug) are still allowed to be sold under Canada’s EV Availability Standard. 
• Used gas-powered vehicles can also be sold on the secondhand market (54% of all vehicle sales in 2022 were of used vehicles) long after the 100% sales requirement kicks in in 2035. This policy covers only new vehicle sales, not used.

Is EV demand in Canada cooling?

• Canadian EV sales have, on average, increased by nearly 50% each year since 2020, compared to 2% for exclusively fossil-fuel-powered vehicles. And before the recent series of pauses to different government rebates, Canada’s nationwide EV sales share had climbed to a record 18% in the final quarter of 2024 or 15% for the full 2024 year (refer to graph).
• While 2025 EV sales in Canada have slowed, this is not necessarily indicative of cooled demand. Rather, the federal, B.C. and Quebec rebates were all paused earlier this year, keeping would-be buyers waiting on the sidelines to see if rebates will be brought back.
  • Quebec restarted its rebate program April 1, 2025, and EV sales in the province in that quarter nearly doubled from the previous.
  • A nationwide poll by Clean Energy Canada and Abacus Data conducted September 2025 found that the overwhelming majority of those open to buying an EV as their next vehicle would wait for the federal rebate to return before making a purchase.
• Another recent poll by Clean Energy Canada and Abacus Data finds that 45% of Canadians are still inclined to get an EV as their next vehicle, with interest higher in certain regions like Quebec (55%) and B.C. (53%), as well as among young people aged 18 to 29 (57%) and 30 to 44 (52%). 

Has the global EV transition slowed?

• No.While the pace of growth itself has slowed—a normal sign for a maturing market—global EV sales are still rising. In the first half of 2025, EV sales increased by 28% globally compared to the same period last year (3% in North America, 26% in Europe, 32% in China, and 40% in the rest of the world). 
• The International Energy Agency expects more than one in four new cars sold worldwide to be an EV this year.

Should traditional hybrids be included?

• Conventional hybrids can only be run on fossil fuels, emit significantly more greenhouse gases than EVs, and also don’t offer the same savings benefits.
  • Driving a Honda Civic hybrid in Quebec only reduces one’s fuel consumption by about 25% compared to a regular gas-powered Honda Civic. In contrast, driving a fully electric vehicle eliminates fuel consumption entirely by swapping it out for electricity, saving drivers thousands of dollars in avoided fuel and maintenance costs every year. In Quebec, the Honda Civic Hybrid will also emit hundreds of times more greenhouse gases per kilometre than the Hyundai Ioniq 6 Long Range (a battery-EV).
• Including conventional hybrids would also undermine a number of the standard’s objectives—improving EV availability and affordability, stimulating investment in transformative battery electric vehicle technology, and providing market certainty for charging station providers looking to build out Canada’s charging network (because conventional hybrids don’t have a plug). 

How will the EV Availability Standard—and its pause—impact Canada’s auto industry?

• The standard encourages Canada’s auto industry to align with global markets, many of which are also rapidly transitioning to EVs (the U.K., EU, and China all have their own versions of the policy with even higher targets). Without an accelerated transition, Canada’s auto sector will quickly become even more uncompetitive. 
• Pausing the regulation, as the Prime Minister has, voids the 2026 requirement and creates demand uncertainty for the auto industry, potentially stalling critical investments and delaying the transition. Any further delays in policy implementation would exacerbate this uncertainty and cause Canada to fall even further behind.

Doesn’t this policy only benefit Tesla? 

• No. Under the federal EV Availability Standard, carmakers can currently only earn Early Action Credits for EV sales above a set threshold. These credits are not tradeable—they can only be used by the automaker that earned them. So far, no one has bought credits from Tesla (or any other company) under the federal policy.
  • Under Quebec’s policy, where credit trading is already active, General Motors and Hyundai have also sold credits alongside Tesla.

Do U.S. tariffs make the EV Availability Standard targets harder to meet? 

• Only 15% of EV models offered in Canada are affected by the U.S. tariff. The tariffs are only applicable if the vehicle is assembled in the U.S., and the vast majority of EV models in Canada are assembled in non-US countries such as Germany, Belgium or South Korea. There are also tariff exceptions for automakers that operate assembly plants in Canada, which include Ford, General Motors, Honda, Stellantis and Toyota. As such, nearly all automakers are spared.
  • Only several manufacturers, like American-only Tesla, Rivian, and Lucid—which collectively represent only 9 EV models in Canada—are impacted by tariffs.

Is Canada’s public charging network sufficient to support our EV targets?

• Up to 90% of charging happens at home (where it’s the cheapest and most convenient), which is why the real question is how to get more home charging into multi-unit buildings. But public charging is nevertheless still important for road trips and those who regularly drive above-average distances—and Canada’s public network is growing rapidly to meet anticipated demand: over the last year, the network grew by about 25%, with tens of thousands of additional chargers already planned and funded.
• Keeping the EV Availability Standard in place is one of the best ways to support private sector investment in Canada’s public charging network, as utilities utilize EV targets to help project electricity demand, developers rely on them when deciding whether to include EV charging in new buildings, and charging station providers use them to determine whether the business case for charging investments in certain areas exists.
  • A recent PBO report finds that the policy would alone unlock enough private sector investment to grow Canada’s charging network to just short of where it needs to be by 2030.

Should the standard be updated, and if so, how?

• The federal government’s decision to pause the Electric Vehicle Availability Standard is an opportunity to adjust the policy to better achieve its primary objectives of increasing consumer choice and EV availability. 
  • Scrapping the policy would put Canada out of line with global markets and lock Canadians out of the affordability benefits of EV ownership. 
  • Updating the policy with additional compliance pathways, such as with extra credits for vehicles under a certain price point, could help incentivize automakers to introduce lower-cost EVs.

The post What is the Electric Vehicle Availability Standard and why does Canada need one? appeared first on Clean Energy Canada.

A handful of influential B.C.-based organizations and commentators have made claims about B.C.’s energy system this past year that we believe are misinformed and likely to mislead British Columbians. To set the record straight, Clean Energy Canada is releasing a special media brief to respond to four consequential myths we’ve seen appear over and over again.

Claim: Deploying EVs and heat pumps will overwhelm our energy grid, and therefore governments should undo efforts to support EVs and heat pumps.

Fact: Electricity demand for EVs is very manageable, while heat pumps greatly improve energy efficiency.

• Electricity demand for EVs is manageable
  • BC Hydro estimates that current EV sales requirements will increase electricity demand by 2% in 2030, consistent with other global forecasts. This is based on 421,000 EVs on the road in 2030 and compliance with the provincial EV sales requirements between now and 2030. For comparison, the number of EVs on the road in B.C. was around 90,000 in 2022.
  • A Canadian government study on the anticipated electricity needs of EVs found that they would represent 3%, 16%, and 22% of electrical power demand in 2030, 2040, and 2050, respectively. As the study states, “This number is significant, but since the growth is spread over 30 years, with most happening during the 2030 to 2050 timeframe, Canadian utilities have 10 years to refine the load forecast and plan for grid expansion.”
  • A recent U.S. study by Consumer Reports found that even if EVs accounted for 100% of new vehicle sales by 2035, it would take until 2050 for almost all vehicles on the road to be electric. Accounting for increases in kilometers driven in 2050, if all vehicles driven were electric, electricity demand would need to increase by 26% compared to current electricity demand, meaning that meeting this new electricity demand for passenger EVs will only require about 1% per year growth in electricity production, well below the 3.2% average annual growth rate for the electricity generation over the past 70 years in the U.S.
• EVs can contribute to grid capacity and reliability
  • While most current EVs are unidirectional, meaning that they only take power from the grid, EVs have the ability to also do the opposite and improve grid reliability when they are used as batteries that utilities can draw from in times of need.
  • In fact, there are vehicles for sale today, including Ford’s F-150 Lightning (extended range) and GM’s Chevrolet Silverado EV First Edition RST, that are bidirectional, meaning they can both send and receive power to the home (called vehicle-to-home) or to the grid in conjunction with a participating utility (called vehicle-to-grid). 
  • The Baltimore Gas and Electric Company already has an operating vehicle-to-grid pilot program up and running in partnership with Ford and Sunrun to deliver power to owners’ homes during peak demand times in summer to support Maryland’s power grid.
  • PG&E is offering California customers under their Vehicle-to-Everything (V2X) program the opportunity to earn incentives by sending electricity to the grid from their EVs in times of peak demand.
  • The city of Oakland, California, is converting its 74 school buses to vehicle-to-grid capable electric buses that will be able to provide 2.1 GWh back to the grid annually, enough to power 400 homes for a year.
  • Bidirectional charging is expected to become much more widespread in the coming years. In August 2024, California passed a law that gives the California Energy Commission the powers to require “any weight class” of battery-electric vehicles to have vehicle-to-grid charging capabilities.
• Heat pumps can lower grid demand
  • Heat pumps use significantly less electricity than electric baseboard heating, lowering grid demand and saving money for the 40% of B.C. households heating their homes this way. 
  • A heat pump is also three to five times more energy efficient overall than a natural gas furnace, resulting in less electricity demand than some commenters have assumed. In fact, a new Clean Energy Canada report shows that a typical B.C. household living in a detached house which transitioned from a natural gas furnace to a heat pump would be expected to save $570 a year (including equipment costs and rebates).
• There are additional steps utilities are taking to improve grid reliability and stability that will reduce future demand
  • Currently, B.C. and Ontario offer time-of-use rates to incent customers to operate appliances, including EVs and heat pumps, during off-peak hours to help balance electrical loads across the grid. BC Hydro has an option to subscribe to a 5 cent per kWh discount for power usage between 11 pm and 7 am with a corresponding 5 cent per kWh surcharge between 4 pm and 9 pm. Ontario offers an ultra-low overnight rate of 2.8 cents per kWh between 11 pm and 7 am. For contrast, the on-peak rate is 28.6 cents per kWh between 4 pm and 9 pm.
  • Analysis commissioned by Ontario’s Independent Energy System Operator found that distributed energy resources (DERs), such as smart thermostats or using your EV to provide power to the grid, are able to satisfy a material portion of the province’s energy needs, from 1.3 to 4.3 GW of peak summer demand by 2032.
  • In the coming years, households are set to evolve from energy customers to both customers and providers of electricity. We see early indications of this in B.C. with the government’s June 2024 announcement of grid-tied household solar and battery storage incentives. 

Claim: Importing electricity from other jurisdictions drives up costs and means B.C. can’t meet its own demand for electricity.

Fact: B.C. both imports and exports electricity, a practice that keeps rates lower for consumers.

• B.C. benefits significantly from electricity trade with its neighbours. Importing and exporting electricity helps us manage our system in a manner that keeps rates more affordable for customers. Over the last decade and a half, B.C. was a net importer in seven years and a net exporter in the other eight (including during the period from 2019 to 2023). 
• With more of our partners deploying larger quantities of cheap renewables—and generating a surplus of energy at certain times of the day—B.C. is able to buy power when prices are low, helping conserve water in our reservoirs for periods of high demand, like during the winter months.

Claim: B.C. doesn’t have enough electricity to meet its climate commitments.

Fact: BC Hydro has taken a number of steps to ensure it’s bringing online the resources it requires.

• In January, BC Hydro announced its intention to invest $36 billion over the next 10 years to support the growth of B.C.’s electricity system, a 50% increase in planned spending compared to 2023.
• Additional capacity is being brought online through Site C, which will be operational in 2025 and add 8% to B.C.’s grid capacity. The most recent 2024 BC Hydro call for power will add another 5% capacity to the province’s electricity grid, starting in 2029.
• In September 2024, BC Hydro announced it had received 21 proposals from independent power producers representing three times the amount of electricity generation needed in its call for power, indicating that a strong pipeline of projects exists in B.C. to meet growing demand.

Claim: Renewables like wind and solar can’t provide the reliable power B.C. needs as electricity demand grows.

Fact: Renewables are extremely cost-competitive, work in tandem with other technologies, and are already being used successfully at scale in other countries.

• Wind and solar globally are the cheapest sources of power. An analysis from Clean Energy Canada found that solar and wind with battery storage are set to produce cheaper electricity than natural gas in Alberta and Ontario, and this trend is expected to be similar for B.C. 
• While wind and solar are variable resources, solutions are available to complement them, from batteries and dispatchable power, to stronger grids and interconnections, to technological demand-side measures (i.e. storing and sending power where and when it’s needed). These options can enable relatively high shares of wind and solar on a grid. 
• A look at other countries around the world offers plenty of examples of high wind and solar shares, such as 67% in Denmark, around 40% in Germany and the Netherlands, and 28% in Australia. In a scenario where Canada achieves a net-zero economy by 2050, wind and solar would be responsible for only 30% to 40% of required electricity production, less than some countries produce today.
• The state of South Australia–almost identical in size to B.C. with a smaller population—saw 75% of its electricity needs met by solar and wind energy in 2023, while the state is hoping to achieve a 100% renewable-powered grid by 2027. 

The post Addressing common myths around B.C.’s energy future appeared first on Clean Energy Canada.

Clean Energy Canada is a clean energy think tank at the Morris J. Wosk Centre for Dialogue at Simon Fraser University. Through media briefs, we aim to provide useful factual and contextual information related to Canada’s clean energy transition. Please use this as a resource, and let us know if there are any topics that you would like to see for future media briefs.

The 2023 wildfire season was like no other. By May, the area burned in Alberta exceeded a million hectares, putting the province on track to blow past the previous record set in 1981. And less than a week into June, wildfires in Eastern Canada have put tens of millions of North Americans under air quality alerts. And at its conclusion, it was comfortably Canada’s worst wildfire season ever—burning more than double the area of the previous record and nearly seven times more than the historical average.

The season comes only a few years after B.C.’s 2017 and 2018 wildfire seasons, which were the worst two on record at the time. According to the Canadian Climate Institute, since 2010, the costs of weather-related disasters and catastrophic events have amounted to about 5 to 6% of Canada’s annual GDP growth, up from an average of 1% in previous decades. In the insurance industry, nine out of the most costly 10 years in Canada ever have occurred since 2011.

Given the regularity of record-breaking events, the link to climate change is increasingly hard to ignore. But while the scientific link is clear, the connection is not always made explicit in media coverage of the weather events themselves. Extreme weather attribution is a growing field of science, dedicated to establishing the role that climate change plays in our changing weather patterns. It is now possible to attribute certain weather events to climate change with some confidence, with one analysis suggesting 71% of all studied extreme weather events were made more likely by climate change. And more recently, some analyses are even able to link damage from extreme weather to specific emitters. 

The following brief summarizes some of the latest studies around the implications of extreme weather in Canada and the world.

Wildfires

• Climate change more than doubled the likelihood of extreme fire weather conditions in Eastern Canada in 2023, according to the World Weather Attribution Initiative.
• The 2016 Fort McMurray fire was 1.5 to 6 times more likely because of climate change. Another study found that pressure vapour defects, which increased the fire risk, were made worse by climate change. 
• B.C.’s record-breaking 2017 wildfires were made 2 to 4 times more likely, while the area burned was 7 to 11 times bigger.
• The conditions that caused the devastating wildfires in southeastern Australia in late 2019 and early 2020 were made at least 30% more likely due to the effects of climate change.
• Climate change is expected to result in a 41% increase in the frequency of lightning worldwide, with the western coast of North America listed as one of the areas most at risk. Lightning is the leading cause of wildfire ignition in B.C.
• The contribution to poor air quality from wildfires is projected to increase more than tenfold by the 2050s under a high-emissions scenario, compared to the present climate in the Western U.S.
• Fine particulate pollution over the U.S. Pacific Northwest could double to triple during late summer to fall by the late 21st century. The historic fires and resulting pollution extremes of 2017 to 2020 could occur every three to five years under 21st-century climate change, posing challenges for air quality management and threatening public health.
• An increase in wildfire size, associated with climate change, in the Western U.S. has resulted in higher wildfire smoke plumes. The result is that aerosols from wildfires are injected into the atmosphere at greater heights, resulting in more widespread implications for air quality and long-range smoke transport.
• 37% of the area burned by wildfires in Western Canada and the United States between 1986 and 2021 can be traced back to emissions from 88 major fossil fuel producers and cement manufacturers.
• A Canadian study found that wildfire exposure was associated with slightly increased incidences of lung cancer and brain tumours. 
• The health costs of wildfires between June 4 and June 8 last year are estimated to be $1.28 billion in Ontario alone.
• A study showing seasonal pattern changes of atmospheric carbon monoxide indicated that transported wildfire pollution could potentially impact the health of millions of people across North America.
• Natural Resources Canada estimates the fire protection costs could double in Canada by 2040 as we attempt to keep up with the worsening risk.

Heatwaves

• Heatwaves will become longer and more intense because of climate change. 
• The latest report from the United Nations’ Intergovernmental Panel on Climate Change found that heatwaves that, on average, arose once every 10 years in a climate with little human influence will likely occur 4.1 times more frequently with 1.5°C of warming, 5.6 times with 2°C, and 9.4 times with 4°C.
• The June 2021 heatwave in B.C.—which was the most deadly weather event in Canadian history, killing 570 people—was made 150 times more likely because of climate change and would have been “ virtually impossible” without human-caused warming.
• A new study found the 2018 northern hemisphere heatwave, which killed 74 people in Quebec, would have been “impossible” without climate change.
• Another study found that extremely hot days occur five times more often when compared to pre-industrial times as a result of climate change (where an extremely hot day is a one-in-a-thousand day event under pre-industrial conditions).
• A rapid attribution analysis of the heatwave in Europe in June 2021, which saw temperatures of more than 45°C in parts of France, found it was made five times more likely because of climate change.

Floods and storms 

• Hurricane Fiona, which hit Atlantic Canada in 2022, was the most costly weather event ever to hit the region. Evidence suggests that climate change is making hurricanes more intense.
• Toronto’s 2024 summer floods are estimated to have cost around $1 billion in insurable claims. Across Canada, a once-in-every-50-years rainstorm could come around every 10 years by late century under a high emissions scenario, according to a 2019 federal assessment.
• One-in-100-year flood events in Toronto and Montreal are expected to become 1-in-15 year events by the end of the century as a consequence of climate change, according to a study by scientists from Western University and the National Research Council of Canada.
• Research investigating the 2013 Alberta floods found that climate change may have led to an increased likelihood of extreme rainfall. 
• Another Canadian study, looking at the extreme flooding in Saskatchewan and Manitoba in 2014, found that climate change may have played a role in the significant increase in rainfall.
• Another study found that extremely rainy days are 18% more likely now than they were in pre-industrial times as a result of climate change (where an extremely rainy day is a one-in-a-thousand day event under pre-industrial conditions). This is expected to climb to 65% if global warming reaches 2°C.

The post Media brief: The link between wildfires and other extreme weather and climate change appeared first on Clean Energy Canada.

Clean Energy Canada is a clean energy think tank at the Morris J. Wosk Centre for Dialogue at Simon Fraser University. Through media briefs, we aim to provide useful factual and contextual information related to Canada’s clean energy transition. Please use this as a resource, and let us know if there are any topics that you would like to see for future media briefs. 

Global renewable power generation is growing at an unprecedented rate, driven by  the favourable economics of wind and solar along with energy security concerns around oil and gas (largely caused by recent wars), and emissions goals. So much so that new analysis suggests global emissions from electricity generation may peak this year due to a surge in wind and solar power.

Canada’s hydropower-rich grid is 84% non-emitting with variable renewables (essentially wind and solar) currently making up 7% of the country’s total electricity generation. However, the Canada Energy Regulator projects that this would rise to between 33% and 37% of electricity generation in 2050 in a net-zero 2050. With studies indicating that Canadian power demand could double between now and 2050, the federal government recently proposed the Clean Electricity Regulations to help ensure that Canada’s power system remains both clean and affordable in the years ahead. Renewable power, including variable renewables, will clearly have a big role to play in Canada’s energy future, but its use has faced criticism that is often based on inaccurate or misleading information.

The following brief breaks down some of the common misconceptions about the use of variable renewable power in Canada and around the world.

Myth 1: “Renewables can contribute only a small share of grid electricity because they only work when the wind blows and the sun shines”

• It’s true that wind and solar are variable resources that provide most power to the grid when the sun shines or the wind blows. However, solutions are available to complement variable resources, from stronger grids and interconnections to demand-side measures (such as the smart charging of electric vehicles and industrial demand response), affordable storage, and dispatchable power supply. These options can enable relatively high shares of wind and solar on a grid.
• A look at other countries around the world offers plenty of examples of current wind and solar shares that are much higher than Canada’s today, with some even higher than the 33% to 37% that the Canada Energy Regulator projects for a Canadian net-zero future.
  • Wind and solar accounted for 61% of electricity generated in Denmark in 2022. Other countries with relatively high shares of wind and solar include Uruguay (36%), Ireland (34%), Germany and the Netherlands (32% each), the U.K. (29%), Chile (28%), and Australia (26%).
  • Regionally, the EU-wide average share of electricity generated from wind and solar in 2022 was 22%. In May 2023, wind and solar produced more electricity than fossil fuels in the European Union for the first full month on record. Almost a third of the EU’s electricity that month was generated from wind and solar (31%), while fossil fuels generated a record low of 27%.
  • The average in the G7 was 15%, just above the global average of 12%.
  • South of the border, the U.S. has a share of 15%, although with great state-level variation. Over a third of all U.S. states (18) generated more than 20% of electricity from wind and solar in 2022. The U.S. states with the highest shares were Iowa (63%) and South Dakota (55%). Others with relatively high shares include major states like California (34%) and Texas (26%).
• A 2022 assessment of the potential to add variable renewables to Canada’s electricity system found that an average renewables penetration rate of 54% could be realized, with even higher shares possible under certain measures.

Myth 2: “Renewables are expensive, and the cost of energy storage required to support renewables is prohibitive”

• A recent Clean Energy Canada report, A Renewables Powerhouse, found that electricity from wind and solar is already cost-competitive with natural gas generation in Ontario and Alberta (the two provinces studied), with even more cost reductions on the horizon.
  • When Canada’s carbon price is also included, both wind and solar are significantly cheaper than natural gas already today.

• Analyses for the U.S. from Lazard and the Energy Information Administration show similar results. Both find wind and solar to be cost-competitive with natural gas-fired electricity in the U.S. even without a carbon price.
  
• That said, lower costs alone are only part of the equation. Wind and solar are variable resources, meaning they provide most power to the grid when the sun shines or the wind blows. As costs continue to fall, there are a number of ways to complement the variability of wind and solar, including energy storage and increased transmission capacity.
  
• Our recent report found that, even when the costs of battery storage are included, both wind and solar are cost-competitive in many scenarios in the two provinces studied.

• Again, results for the U.S. are comparable, where estimates show that variable renewables plus storage can be cost-competitive with natural gas-fired electricity.
• As energy storage costs continue to fall, variable renewables are expected to become even more cost-competitive with electricity from natural gas. For example, analysis from BloombergNEF shows a near-80% decline in lithium-ion battery prices over the last 10 years across applications ranging from vehicles to stationary storage. Looking ahead, the U.S. National Renewable Energy Laboratory projects utility-scale lithium-ion battery storage costs to potentially halve over this decade, with continued cost declines through 2050.

• Apart from providing low-cost electricity, renewables can also help the communities in which they are located. New analysis found that some southern Alberta municipalities receive a substantial amount of tax revenues from wind and solar projects, some as high as 50%.
• Our recent report found that, even when the costs of battery storage are included, both wind and solar are cost-competitive in many scenarios in the two provinces studied.

Myth 3: “Electricity from renewables is not clean when you consider the resources required to produce solar panels and wind turbines”

• Studies by some of the world’s most reputable energy institutions have shown that the greenhouse gas emissions of electricity generation from variable renewables like wind and solar are considerably lower than power from natural gas and coal:
  • The U.S. National Renewable Energy Laboratory conducted a comprehensive review of around 3,000 life-cycle assessment studies on utility-scale electricity generation from various energy sources. The Intergovernmental Panel on Climate Change cited this work in a special report on renewables, and NREL recently updated its review. A full life-cycle assessment covers all stages of electricity generation, from resource extraction and power plant construction to operation and eventually decommissioning and recycling or disposal.
  • The NREL review showed that total life-cycle greenhouse gas emissions from solar, wind, and nuclear are considerably lower and less variable than those from natural gas and coal. Specifically, the median total life-cycle emissions from natural gas power is almost 40 times that of wind and more than 10 times that of solar. Previous review studies found similar results.

Myth 4: “Renewables are not clean when you account for the equipment waste they generate at their end of life”

• Research that specifically looked at waste from solar panels shows that 35 years of global projected cumulative solar panel waste is dwarfed by the waste generated by fossil fuel energy and other common waste streams.
  • For example, if there was no transition to renewable energy sources, coal ash and oily sludge waste generated from fossil fuel energy would be 300 to 800 times and 2 to 5 times larger, respectively, than solar panel waste by 2050. In other words, waste from solar electricity is significantly lower than that from fossil fuels.
• Although some 85% to 90% of the mass of a wind turbine and solar panel can be reused or recycled, most decommissioned solar modules and blade waste in Canada are currently directed to landfills or are being stored pending future recycling options, according to a 2021 report.
• However, numerous policy tools are available to minimize waste generation and encourage circularity of materials from renewables equipment, including targeted end-of-life regulations, extended producer responsibility, eco-design regulations, labelling and certification, and binding and measurable recovery and recycling targets. Indeed, some provinces, like B.C. and Alberta, have already begun advancing their solar panel recycling efforts in recent years.
• Analysts expect rising energy costs, improved recycling technology, and government regulation to increase recycling rates. In fact, the recycling market for solar panels alone is projected to be worth US$2.7 billion globally by 2030, up from only US$170 million last year.

Myth 5: “Renewables technology is not ready”

• The International Energy Agency attests that solar and wind are “well established and readily available” today. In fact, renewables are set to contribute 80% of new power capacity worldwide between now and 2030 under current policies, with solar alone accounting for more than half.
• Solar deployment has seen exceptional growth in recent years, with global installed capacity poised to surpass that of coal by 2027. Earlier this year, the International Energy Agency projected global spending on solar power in 2023 to exceed US$380 billion, for the first time surpassing worldwide investment in oil production (US$370 billion). At the current rate, global growth in solar generation is on track with what’s needed from this technology to achieve net-zero emissions by 2050, according to the International Energy Agency.
• Onshore wind is a “proven, mature technology with an extensive global supply chain,” according to the International Energy Agency. Meanwhile, offshore wind is expected to grow rapidly in the coming years as deploying turbines at sea takes advantage of stronger winds.
• In fact, the rapid deployment of solar and wind in the past few years has exceeded expectations, driven by energy security concerns and new global policies, leading to significant upward revisions of the International Energy Agency’s renewable power forecasts. The agency’s latest world energy outlook similarly highlights how projections for solar and wind generation to 2030 have increased substantially in successive editions of the outlook since 2019.

Myth 6: “Renewables may work elsewhere but are not suited to Canada”

• A 2021 study analyzed the ability of solar and wind to meet electricity demand in over 40 countries and ranked Canada second.
• Earlier analysis similarly found significant potential for variable renewables like wind and solar across Canada. Highlights include on-shore wind potential in Newfoundland and Labrador and Saskatchewan, off-shore wind potential in B.C. and Ontario, and solar potential in Ontario and the Prairies.
• Atlantic Canada is home to some of the best wind power resources in the world, with a recent study pointing out that “offshore wind could be for Atlantic Canada what oil was to Texas or hydro power to Quebec.” 
• Also according to the federal government, parts of southern Alberta, Saskatchewan, and Manitoba have been shown to have high solar power potential.
• In fact, Canada’s hydro-dominated electricity network is well-suited to complement the integration of significant shares of wind and solar. Analysis from 2022 found that Canada could see variable renewables reach a penetration rate of 54% across the country on average, with even higher rates possible when adding demand-side measures.
• In addition, Canada has “tremendous potential for pumped-storage hydropower,” with more than 8,000 GW identified at almost 1,200 sites, according to WaterPower Canada.

The post Media Brief: Addressing common myths around renewable power appeared first on Clean Energy Canada.

The federal government has released a new paper, Powering Canada Forward, which lays out the federal government’s vision for a 100% clean power grid by 2035. The paper precedes the forthcoming Clean Electricity Regulations that will provide the regulatory support.

Canada’s grid is already 84% emissions free, but as the energy transition progresses, more homes, vehicles, and industries will be plugging into the grid. Estimates indicate that power demand could double between now and 2050 while generation capacity will need to be up to three times larger. The Clean Electricity Regulations help ensure that Canada’s regionally divided power system remains both clean and affordable in the years ahead.

This media brief summarizes some of the most relevant studies on what a clean power grid means for provinces, electricity costs, jobs, and public opinion, while providing a run down of similar policies in place elsewhere in the world.

Costs of clean power

• A recent Clean Energy Canada report, A Renewables Powerhouse, looked at the costs of producing power from wind and solar in Alberta and Ontario compared to gas power. Specifically it found:
  • In Alberta and Ontario, wind can now produce electricity at lower costs than natural-gas-fired power with even more cost reductions on the horizon.
  • Solar power is already cheaper than natural gas power in Alberta and is on track to be 16% less expensive by the end of the decade.
  • Even when the costs of battery storage are included, both wind and solar are cost-competitive in many scenarios. 
• Canadians will spend 12% less on energy overall than they do today when they switch off fossil fuels to power their homes, vehicles and businesses with clean electricity, according to a report from the Canadian Climate Institute. While electricity bills may increase over time, the report notes that Canadians will overall spend “less on energy because electric technologies are so much more energy efficient than fossil-based ones. The cost of renewable power has also fallen dramatically over the last decade, making it the cheapest source of new power.” For example, the price of charging an electric car may increase your electricity bill, but the savings on gasoline are far greater, as shown in Clean Energy Canada’s report, The True Cost. 
• The price of clean power is controlled by local market forces (and is therefore subject to fewer price fluctuations), while power produced from fossil fuels is exposed to the geopolitics surrounding global oil and gas prices. In Quebec, for example, which has an almost entirely emissions-free grid, utility Hydro-Québecpointed out that over the last 60 years, “electricity prices followed the inflation curve while oil and natural gas prices show(ed) greater fluctuations.”

• Already, provinces with the cleanest grids typically pay the least for electricity. 

• The effects of the climate crisis could cost Canadians some $700 per year by 2025—a price tag that is expected to double or triple by 2050.

Implications for provinces

• The financial support for clean electricity grids offered by the federal government in Budget 2023 benefits all provinces, but particularly those transitioning away from more emissions-intensive grids (namely Alberta, Saskatchewan, Nova Scotia, and New Brunswick), according to a recent paper by the Canadian Climate Institute. These provinces all stand to receive 33% more funding than hydro-rich provinces per gigawatt of presently installed capacity. Specifically,
  • Alberta could receive as much as $3.5 billion, in addition to $3 billion of financing support from the Canada Infrastructure Bank.
  • Saskatchewan could access more than $1.6 billion in direct support and over $1 billion in financing.
  • Ontario could receive as much as $13.4 billion in funding specifically for clean electricity. 
• Independent modelling in a variety of provinces has shown pathways to decarbonizing provincial electricity grids:
  • In Ontario, a recent analysis found that there are multiple pathways to achieving the 2035 goal, and that these pathways could be pursued cost-effectively if the right decisions are made. Importantly, all of the scenarios greatly limited the role of natural gas, playing as little as 3% of all generation in 2035 (with the assumption that emerging technologies like carbon capture and storage or carbon offsets would account from the remaining emissions).
  • In Alberta, significant decarbonization could be achieved by 2035 and would be $22 to $28 billion cheaper than estimated by the Alberta Electric System Operator, according to research from Pembina Institute and the University of Alberta.
• Alberta has seen nearly $4.7 billion of new clean electricity projects between 2019 and 2023, creating over 5,300 jobs. However, last week the Alberta government surprised investors and companies by announcing a seven-month moratorium on new projects. It is estimated that around 91 projects and over $25 billion of investment are now at risk due to this sudden announcement.

Impacts on jobs and the economy

Canada’s clean grid offers a competitive advantage to Canadian industry. Canadian electricity is, on average, more than twice as clean as America’s, meaning that many goods and services produced here are accordingly lower carbon. 

• Several big companies like Volkswagen and General Motors have indicated that they chose Canada for their manufacturing facilities in part due to its clean power.

In addition, clean electricity projects themselves are benefitting Canada’s economy.  

• Canada will see 700,000 more energy jobs in 2050 than exist today if Canada and the world reach net zero, with growth in clean energy jobs outpacing the decline in fossil fuel ones, according to a recent Clean Energy Canada report.
• The same report found that clean energy supply (which includes electricity generation) will support 478,700 workers in a net-zero 2050 with almost 60% more Canadians working to supply clean energy than in 2025.

Similar international actions

Canada is not alone with its ambition to create a clean power grid by 2035.

• The United States, Canada’s largest trading partner, also has a goal of producing 100% carbon pollution-free electricity by 2035. Significant investments in the Inflation Reduction Act and Bipartisan Infrastructure Law have already advanced the country’s clean power ambitions, with the National Renewable Energy Laboratory predicting that grid emissions could decline between 72% to 91% below 2005 levels by 2030 as a result.
• G7 countries all committed in 2022 to achieve “predominantly decarbonised electricity sectors by 2035.” As part of its G7 presidency, the U.K. requested an International Energy Agency assessment of the pathways to achieve this objective. The agency concluded there was a “comprehensive and cost-effective route to achieve net zero electricity in the G7 without compromising energy security.”

Public opinion

• An overwhelming majority (71%) of Canadians support the federal government’s Clean Electricity Regulations according to a recent Abacus Data poll commissioned by Clean Energy Canada. In B.C. and Atlantic Canada, support for the Clean Electricity Regulations is even higher, with nearly 8 in 10 saying that they “somewhat” or “strongly” support them. More Canadians support the regulations than are against them in every region, including Alberta.

• A different Clean Energy Canada poll found that two thirds of Canadians think a clean energy system would be more affordable than a fossil fuel energy system. This view is shared by a majority in every region or province, except for Alberta. Two-thirds also think a clean energy system would be more secure—that is, a system where prices and supply are less influenced by goal markets. This view is shared by a majority in every region or province, including in Alberta.

The post Media Brief: Canada’s Clean Electricity Regulations appeared first on Clean Energy Canada.

Clean Energy Canada is a clean energy think tank at the Morris J. Wosk Centre for Dialogue at Simon Fraser University. Through media briefs, we aim to provide useful factual and contextual information related to Canada’s clean energy transition. Please use this as a resource, and let us know if there are any topics that you would like to see for future media briefs. 

Electric vehicles now make up 9% of new car sales in Canada. In B.C. and Quebec, the market share is even higher, with electric vehicles making up around 20% and 14% of new cars sold in each province, respectively. But as EVs have gained in popularity, so have misinformed arguments against their adoption. This media brief unpacks a number of the most common ones with relevant, publicly available research. 

Myth 1. “EVs have greater lifecycle emissions than gas cars”

Globally, electric vehicles have been shown repeatedly to have lower lifecycle emissions than traditional gas-powered vehicles even in regions with fossil-fuel-dependent electricity grids. Lifecycle emissions commonly include emissions from mineral sourcing like mining or recycling, mineral processing, vehicle and battery manufacturing, car use and, in some cases, disposal and recycling at end of life.

• A study from the International Council on Clean Transportation found that the lifecycle emissions of a new battery-electric vehicle are lower than a comparable gas car by around 60% to 69% in the U.S. and Europe and 37% to 45% in China, depending largely on the emissions intensity of the electricity used to charge the vehicle.
• Another recent study (which includes battery recycling in its calculation) found that when charged with 100% renewable electricity, electric vehicles are 89% lower emission than gas vehicles. Canada’s electricity grid is currently 84% non-emitting. 
• A study from Ford Motors and the University of Michigan found that most passenger electric vehicles have approximately 64% lower lifecycle emissions than gas vehicles on average across the U.S.
• A Canada-specific study indicated that an EV would have lower lifecycle emissions regardless of the provincial grid it is plugged into, with emissions savings relative to an equivalent gas car ranging from 25% in Alberta to 85% in Quebec. Note that the federal government’s proposed Clean Electricity Regulations would see Canada reach a net-zero grid by 2035. If achieved, EVs in Canada would be charged with even cleaner power across the country, further reducing their lifecycle emissions.
• There is a significant push to reduce emissions associated with the manufacturing of EVs. Many automakers, like Tesla, Ford, and General Motors, are investing in battery materials recycling. Some are already preferentially buying materials from mines and manufacturers with lower carbon footprints.

Myth 2. “There are not enough metal and mineral resources to supply electric vehicles”

• Studies indicate that there are sufficient reserves of key minerals to supply future global EV demand. However, the adoption of recycling technologies is key to reducing the amount of new minerals and metals extracted, limiting environmental damage, and reducing social and economic costs.
• The International Council on Clean Transportation estimates that battery recycling can reduce the need for new mining by 20% in 2040 and 40% in 2050 globally.
• Supply constraints may cause bottlenecks and price fluctuations in the near term, but these stresses will be temporary if policymakers and industry anticipate and prepare for them. According to BloombergNEF, global battery manufacturing capacity increased 84% between 2019 and 2021. Canada is making significant efforts to build its battery manufacturing capacity, backed by the Critical Minerals Strategy, while the U.S.’s Inflation Reduction Act is channeling billions of dollars toward building a North American battery supply chain.
• The EV battery recycling industry is growing, with a number of Canadian companies showing global leadership, including Lithion and Li-Cycle. In addition, some jurisdictions—like the EU—have set mandatory recycled content targets for cobalt, lead, lithium, and nickel from batteries. 
• Many automakers have pledged not to use minerals sourced from deepsea mining.
• Various companies are advancing battery technologies that are less mineral-intensive or rely on cheaper, more readily available raw materials (e.g. solid-state batteries and iron-phosphate batteries). China’s BYD, which is the world’s second-largest EV manufacturer and also supplies other carmakers with its battery technology, announced it would produce batteries without nickel, cobalt, and manganese.

Myth 3. “EV batteries need replacing before the vehicle’s end of life”

• All EVs sold today include a battery warranty of at least eight years and 160,000 kilometres. A recent study showed that the majority of EVs that have been driven more than 160,000 kilometres still retained at least 90% of their original range. 
• Out of 15,000 electric cars analyzed in a 2023 study, only 1.5% have required a battery replacement, and most have occurred under warranty.
• Tesla has claimed that the range on its Model S and X vehicles decreased by just 12% after 321,000 kilometers of driving (these models are older and therefore offer insights based on real-world data). This is reinforced by a crowd-sourced study by Tesla owners in the Netherlands that found that long-range Teslas typically held at least 90% of their original charge after 240,000 kilometers of driving. 
• EVs have fewer moving parts, resulting in less engine wear, meaning they are likely to be longer-lasting than their gas counterparts and require fewer repairs.

Myth 4. “EVs are less affordable than gas cars”

• Clean Energy Canada analyzed a number of popular electric car models, comparing their total ownership costs with that of gas equivalents. With just one exception, the electric version of every car analyzed was cheaper, usually significantly so.
• Specifically, the analysis found that the electric Hyundai Kona, Canada’s second best-selling EV in 2021, is $17,800 cheaper to own than the gas-powered Kona with an average gas price of $2 per litre. Even at a gas price of $1.45, the Kona is still $10,500 cheaper. The electric Chevrolet Bolt offered even more cost savings, with the comparable gas-powered Toyota Corolla costing $22,000 more over its lifetime at a $2 gas price.

Myth 5. “EVs do not have enough range”

• The average range of new EVs sold in the U.S. last year was 468 kilometres (291 miles).
• Most Canadians drive less than 60 kilometres per day, and 80% of charging happens at home.
• As Canada’s fast-charging network grows, range and charging will become less of a concern for longer trips.

Myth 6. “The grid can’t handle EVs”

• While the switch to EVs will require good electricity planning, other countries around the world, like Norway (where EVs account for some 80% of new cars sold), have not experienced grid-related issues as a result of high EV adoption.
• In California, where EV sales made up 21% of new car sales in the first quarter of 2023 (the highest in North America, followed closely by B.C.), EV charging currently accounts for less than 1% of the grid’s total load during peak hours. In 2030, when EVs are set to account for 68% of new sales, charging is projected to make up less than 5% of that load.
• A federal government study on the anticipated electricity demand from EVs found that they would represent 3.4%, 16.1%, and 22.6% of the electrical power demand in 2030, 2040, and 2050 respectively. As the study states, “This number is significant, but since the growth is spread over 30 years, with most of the growth happening during the 2030 to 2050 timeframe, Canadian utilities have ten years to refine the load forecast and plan for grid expansion.”
• Utilities and manufacturers are also working on using EVs to help manage and decarbonize electricity grids. When plugged into the grid, EV batteries could provide valuable power storage by storing electricity in their batteries and then giving it back to the grid when required. One study showed that electric vehicle batteries alone could satisfy short-term global grid storage demand by as early as 2030. Some Canadian utilities are also offering lower off-peak electricity rates to encourage EV owners to charge their EVs during times of low demand, reducing the need for extra capacity. 
• One of the best ways to support electric utilities in their grid readiness efforts is to offer market certainty, something that is provided in the forthcoming zero-emission vehicle regulated sales targets, which require an increasing proportion of new cars sold in Canada to be electric.

Myth 7. “EVs are not suitable for cold Canadian winters”

• EVs do lose some range during extreme cold. Some studies have shown range loss to be no more than 30% and as low as 8% for some makes and models. However, other studies of extreme cold have found it to be between 30% and 50%.
• EVs have considerably more range than required for most daily journeys (see myth five).
• What’s more, cold weather can also increase gas car fuel consumption by up to 28%, effectively reducing range and increasing fuel costs.
• In addition, most modern EVs have battery heating options that preheat the battery before driving to reduce range loss.
• Unlike a gas car, EVs do not have problems starting in cold weather, and many EVs allow owners to remotely preheat the passenger compartment before driving.
• A number of Canadians have spoken about their experiences driving EVs in Canadian winters (see here and here).

Myth 8. “EVs have a greater fire risk than gas cars”

• A 2022 study from insurance website AutoInsuranceEZ tracked car fires in the U.S., finding that electric vehicles saw just 25 fires per 100,000 EVs sold compared to 1,530 fires for every 100,000 gas cars. In other words, fires occurred in one in every 4,000 EVs compared to one in every 65 gas cars.

Myth 9: “There is no demand for EVs in Canada”

• EV sales have continued to significantly increase year on year. The latest data from the third quarter of 2023 revealed that EVs now make up over 13% of new cars sold in Canada—a 19% increase over the previous quarter and a 50% increase over the same quarter in 2022.
• The provinces with the highest proportion of EV sales in Q3 2023 were B.C. and Quebec (both of which have supportive EV policies) with 26% and 23% market shares, respectively. They were followed by the Yukon (11%), Prince Edward Island (9%), and Ontario (9%).
• Globally, 14% of all new cars sold were electric in 2022, up from around 9% in 2021 and less than 5% in 2020, according to the International Energy Agency.

The post Media Brief: Countering common myths about electric vehicles appeared first on Clean Energy Canada.

Clean Energy Canada is a clean energy think tank at the Morris J. Wosk Centre for Dialogue at Simon Fraser University. Through media briefs, we aim to provide useful factual and contextual information related to Canada’s clean energy transition. Please use this as a resource, and let us know if there are any topics that you would like to see for future media briefs. 

The federal government’s Clean Fuel Regulations, finalized in June 2022, took effect this month. The following media brief explores the purpose of the regulations and the impact they will have on consumers and the Canadian fuels industry.

What are the Clean Fuel Regulations?

• The Clean Fuel Regulations set increasingly stringent requirements on fuel producers and importers to reduce the carbon intensity of transportation fuels such as gasoline and diesel with the eventual goal of decreasing the carbon intensity by approximately 15% (below 2016 levels) by 2030.
• The new regulation, which came into effect this month (July 2023), is currently at just a quarter of its full stringency in 2030. This means the carbon intensity of fuels must be reduced by less than 4% this year (compared to 2016 levels), rising to 15% by 2030.
• B.C., California, Oregon, and Washington state have similar regulations in place.
• The federal government has also introduced a complementary program, the $1.5 billion Clean Fuels Fund, to support clean fuel production in Canada, including advanced biofuels and hydrogen projects.

Why is the policy needed?

• The transportation and oil and gas sectors each accounted for 150 and 189 megatonnes of emissions respectively in 2021—just over half of Canada’s total. The federal government’s 2030 Emissions Reduction Plan, which would see Canada meet its international climate commitments, suggests that transportation emissions would need to be reduced to 143 megatonnes and oil and gas emissions to 110 megatonnes by 2030.
• According to Environment and Climate Change Canada, the Clean Fuels Regulations will help cut up to 26.6 megatonnes of greenhouse gas pollution in 2030, one of the largest reductions from Canada’s portfolio of climate policies.
• Industry association Advanced Biofuels Canada estimates the annual economic contribution from domestic clean fuel production will be $14.1 billion in 2030, almost triple the sector’s $5.3 billion in 2020.

What does it mean for gas prices?

• In seven years, when the regulation is in full force, the federal government estimates the measure to add between 6 to 13 cents per litre of gasoline. Price impacts in the earlier years of the policy are expected to be minimal.
• Similarly, Advanced Biofuels Canada estimates, based on real world data, that the Clean Fuel Regulations would add around 9 cents per litre to the cost of gasoline and diesel in Canada by 2030. 
• A recent Parliamentary Budget Officer’s report estimated that the regulation could add up to 16 to 17 cents per litre respectively to the price of gasoline and diesel purchased in Canada in 2030. However, the PBO acknowledges that its “estimates should be regarded as upper bound estimates.” The PBO also indicates it doesn’t account for the technology change the policy is designed to incentivize, which could lower the regulation’s economic impact. Advanced Biofuels Canada says the PBO’s estimate overstates compliance costs by 80% to 95% and that the methodology is not supported by real world evidence from jurisdictions where similar policies have already been implemented.

The shift to EVs

• The Clean Fuel Regulations are accompanied by other federal policies to make electric vehicles more affordable and available. These include:
  • The federal government’s incentives for zero-emission vehicles offers rebates of up to $5,000 for Canadians hoping to purchase an EV. 
  • The federal government’s forthcoming regulated sales targets for zero-emission vehicles will ensure that at least 20% of new vehicle sales are zero-emission by 2026, at least 60% by 2030, and 100% by 2035. A study from Environmental Defence found that requiring automakers to sell 100% EVs by 2035 would lead to a 20% reduction in electric vehicle prices because automakers would have to put affordable models on the market instead of just focusing on luxury models.
• A recent Clean Energy Canada analysis compared the total ownership costs of a number of popular electric car models with gas-powered equivalents. With just one exception, the electric version of every car analyzed was cheaper, usually significantly so. The analysis found that the electric Hyundai Kona, Canada’s second best-selling EV in 2021, is $17,800 cheaper to own than the gas-powered Kona when gas prices are $2 per litre.

The post Media Brief: Canada’s Clean Fuel Regulations appeared first on Clean Energy Canada.

Clean Energy Canada is a clean energy think tank at the Morris J. Wosk Centre for Dialogue at Simon Fraser University. Through media briefs, we aim to provide useful factual and contextual information related to Canada’s clean energy transition. Please use this as a resource, and let us know if there are any topics that you would like to see for future media briefs. 

The government of Canada is currently consulting on the proposed regulation to achieve its zero-emission vehicle regulated sales targets, also known in other jurisdictions as a “ZEV mandate”. The policy lays out the route to meeting 100% zero-emission vehicle sales Canada-wide in 2035. This media brief breaks down the design of the draft regulation and compares it to other jurisdictions internationally. It also summarizes how the measure will affect consumer choice, EV prices, and EV availability. 

What are the proposed regulations?

• Starting from the 2026 model year, automakers must ensure that 20% of new passenger vehicles available for sale in Canada are zero-emission, increasing to 60% by 2030 and 100% by 2035.  Battery electric (BEV), plug-in hybrid electric (PHEV), and fuel cell electric vehicles (FCEV) are all classed as “ZEVs” for the purposes of the regulation.  
• The design of the proposed regulation is flexible, allowing automakers a number of pathways to meet sales requirements. It uses a credit trading system, where one credit is created when one battery or fuel-cell electric vehicle is made available for sale (partial credits are awarded for plug-in hybrids). An automaker can use that credit to meet their sales requirements, sell any surplus credits to other automakers, or bank them for compliance at a later time. Automakers can also buy credits from other automakers or borrow them from future compliance years to meet their sales requirements. They can also generate credits by investing in ZEV charging and refuelling infrastructure.
• If an automaker does not meet their requirements, they are subject to enforcement under the Canadian Environmental Protection Act. The act provides the authority to carry out inspections and investigations to ensure that the regulation is followed, and the ability to impose a variety of penalties from a warning to a criminal prosecution. However, this enforcement mechanism differs from leading jurisdictions with similar regulations. These jurisdictions use administrative penalty regimes with predictable financial penalties of $20,000 fine per credit deficit. This type of financial penalty is transparent, enforceable, and certain, and has proven to be a successful incentive for compliance.  While a Canadian Environmental Protection Act prosecution is a serious matter, it is not certain or timely, as charges often take months to years to resolve. It is ultimately unlikely a prosecution would be undertaken against automakers falling short of their requirements by a few credits.  

ZEV mandates in other jurisdictions

• Quebec, B.C., and California all use a similar system to achieve their sales requirements en route to 100% new ZEV sales by 2035. However, unlike the draft federal design, these requirements are enforced using predictable financial penalties (as described above).

• Since California enacted its ZEV mandate in 1990, 15 other U.S. states have followed suit. 
• A number of other countries also have a ZEV mandate in place, including China, which has requirements that 40% of new vehicle sales are “new energy vehicles,” (which also comprises BEVs, PHEVs, and FCEVs) by 2030.
• In addition, there are other regulations in place globally that, while not technically ZEV mandates, could lead to similar outcomes:
  • The U.S. has recently proposed a new, more ambitious average fleet emissions standard, which requires that automaker fleets adhere to increasingly strict tailpipe emissions requirements. As the rules become more stringent over time, automakers will be forced to sell a greater share of zero-emission vehicles. Once the new emission standards are in force, the U.S. Environmental Protection Agency projects that this would be equivalent to 36% battery-electric sales (not including sales of plug-in hybrids) in 2027, 60% in 2030, and 67% in 2032 (when the regulations end). 
  • The EU is also using strict tailpipe emission regulations, rather than sales requirements, to phase out gas and diesel cars by 2035. A proposal allowing the continued sale of vehicles with an internal combustion engine running exclusively on synthetic fuels beyond 2035 is anticipated later this year, although both analysts and automakers expect EVs to dominate the market. Indeed, three quarters of all automakers operating in Europe have announced their intention to sell 100% battery electric vehicles by 2035.

Impact on ZEV sales and supply

• In Canada, the provinces with the most ZEV availability are the ones with regulated ZEV sales targets. A study commissioned by Transport Canada found that 82% of dealerships didn’t have any ZEVs (BEVs and PHEVs) in stock in March 2022—and those with stock were concentrated in B.C. and Quebec.
  

What are the impacts on consumers?

• A recent analysis by Environmental Defence found that Canadian regulated ZEV sales targets to phase out gas and diesel cars by 2035 would cut ZEV prices by 20% as automakers are forced to sell more affordable models, instead of just luxury ZEVs, to meet the requirements.
• EV costs will continue to go down as automakers compete for consumers—an effect that would be accelerated by a ZEV mandate. Earlier this year, Tesla announced global price cuts across all models, including in Canada. Ford’s Mach-E followed suit, while one of the world’s largest EV battery producers, CATL, is offering battery price cuts to key customers. In terms of more affordable models, Volkswagen intends to create its first €20,000 EV in Europe by 2027, and in the U.S., the Chevrolet Bolt will become the first EV to hit less than US$30,000 of total ownership cost over five years (including purchase, charging, and maintenance), thanks in part to incentives provided by the Inflation Reduction Act. 
• Last year, Clean Energy Canada analyzed a number of popular electric car models, comparing their total ownership costs with that of gas equivalents. With just one exception (the F-150 Lightning pick up truck), the electric version of every car analyzed was cheaper, usually significantly so. Specifically, the analysis found that the electric Hyundai Kona, Canada’s second best-selling EV in 2021 (after the Tesla Model 3), is $17,800 cheaper to own than the gas-powered Kona with an average gas price of $2. Even at a gas price of $1.45, the Kona is still $10,500 cheaper. The electric Chevrolet Bolt offered even more cost savings, with the comparable gas-powered Toyota Corolla costing $22,000 more over its lifetime at a $2 gas price.

• Almost six in ten (59%) Canadians correctly believe that an electric vehicle will end up being cheaper for them over a gas vehicle, according to a Clean Energy Canada poll in December 2022. In addition, 72% of Canadians believe that it is certain, very likely, or likely that a majority of consumer vehicles sold around the world will be electric.
• A B.C.-based survey from March 2023 found that 96% of current EV drivers say their vehicle is more affordable. What’s more, the same percentage would buy another EV when the time comes (Albertan EV drivers concurred in a separate survey).

Resources

Video | Canada’s Zero-Emission Vehicle Mandate

The post Media Brief: Canada’s new zero-emission vehicle regulation and how it will affect consumer choice appeared first on Clean Energy Canada.

Clean Energy Canada is a clean energy think tank at the Morris J. Wosk Centre for Dialogue at Simon Fraser University. Through media briefs, we aim to provide useful factual and contextual information related to Canada’s clean energy transition. Please use this as a resource, and let us know if there are any topics that you would like to see for future media briefs. 

The war in Ukraine and the associated energy crisis have squeezed household energy bills around the world. In response, many jurisdictions—particularly in the EU—are working to diversify energy supply away from fossil fuels toward cleaner alternatives such as wind, solar and hydrogen.

Evidence suggests that the energy transition is not only necessary to avoid the worst impacts of climate change, but also to address the energy insecurity and price volatility being felt by consumers around the world. Indeed, a number of studies suggest that Canadians will be spending less on energy in a net-zero world.

This media brief summarizes available research on the potential impacts of the energy transition on household energy spending in Canada.

1. The International Energy Agency’s World Energy Outlook 2021 found that, under current global policies, average household energy bills in advanced economies would decline between 2020 and 2050. Under a scenario where governments introduce policies to reach net zero by 2050, bills would decline even further. While electricity bills are set to be higher in a net-zero world due to increased use of electricity, cost savings from energy efficiency and the lack of fossil-fuel-related expenditure (like gasoline for cars and natural gas for heating) mean that overall household energy bills are projected to be lower. More ambitious climate policies would reduce the financial impact of fossil fuel price shocks on households, such as the recent one in Europe. 

2. Similarly, 2022’s World Energy Outlook indicates that a net-zero scenario will require less consumer spending on energy in 2030 than in a scenario where only current policies are retained, and less overall than was spent in 2021. The average cost per unit of electricity in a net zero 2050 is set to be 10% below 2021 levels.

3. The Canadian Climate Institute’s report on Canada’s Net-Zero Future, using modelling by Navius research, examined the proportion of household income spent on energy services (including home heating, electricity, and transportation). The report found that households across all income groups are likely to spend less in 2050 compared to 2020. This is due to three reasons: 

• Energy efficiency is set to improve, significantly reducing total energy use.
• The additional costs of clean technologies would be more than offset by the savings derived from their reduced energy consumption. While the ability to pay higher upfront costs varies by income group, public policy and program solutions such as rebates or incentives can help address this concern. 
• Economic growth nationwide from 2020 to 2050 would cause average incomes to rise, meaning even if energy spending holds steady in absolute terms for some households, the share of income spent on energy would decline.

4. When the impacts of climate change are considered, affordability is negatively impacted, emphasizing the importance of climate action and clean energy to bring down economy-wide costs over the coming decades. Another study from the Canadian Climate Institute found that inaction on climate will have significant impacts on affordability. According to the report, Canada’s GDP could fall by 12% by the end of the century while household incomes could fall as much as 18% compared to a “stable-climate” scenario. The study projects that lower income households would be the most adversely affected. 

5. A study from researchers at Oxford University found that switching from fossil fuels to renewables could save the world between US$5 trillion and US$12 trillion by 2050, emphasizing that “a rapid green energy transition is likely to be beneficial, even if climate change were not a problem.” The study argues, specifically, that there are minimal trade-offs associated with the energy transition and that “a greener, healthier, and safer global energy system is also likely to be cheaper.” When the social cost of carbon is included in the analysis (i.e. the costs to our economy in terms of damage from climate change per unit of carbon emitted), the savings are even higher, in the range of US$31 trillion to US$775 trillion depending on the assumed social cost of carbon and discount rate. 

6. In many cases, clean electricity already costs consumers less than fossil-fuel-powered electricity.

• A recent Clean Energy Canada report pointed out that provinces with the lowest proportions of fossil fuels on the grid also spend the least on electricity. 

• South Australia gets 62% of its electricity from wind and solar combined with grid-scale battery storage. Since 2018, household energy bills have declined some A$300, while the state’s grid is the only one in the country not to have lost a single hour of electricity.

7. Many climate solutions involve technologies that will save Canadians money overall, even if they cost more upfront. This is particularly relevant for transportation and buildings.

• Earlier this year, Clean Energy Canada analyzed a number of popular electric car models, comparing their total ownership costs with that of gas equivalents. With just one exception, the electric version of every car analyzed was cheaper, usually significantly so. Specifically, the analysis found that the electric Hyundai Kona, Canada’s second best-selling EV in 2021 (after the Tesla Model 3), is $17,800 cheaper to own than the gas-powered Kona with an average gas price of $2. Even at a gas price of $1.45, the Kona is still $10,500 cheaper. The electric Chevrolet Bolt offered even more cost savings, with the comparable gas-powered Toyota Corolla costing $22,000 more over its lifetime at a $2 gas price.

• Canadian families would save $151 annually per household on average with best-in-class energy efficiency policies in place, according to 2018 modelling conducted by Dunsky Energy Consulting on behalf of Clean Energy Canada and Efficiency Canada. For families that retrofit their homes, savings would be far higher. Across the Canadian economy, such measures would lead to $1.8 billion in net residential savings and $4.9 billion in net commercial and industrial savings.

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CLIMATE TARGETS

Overview: The 2015 Paris Agreement includes a requirement for countries to submit more ambitious Nationally Determined Contributions (greenhouse gas emissions targets) every five years. Because COP26 has been delayed by a year, many countries—including Canada—announced their new five-year targets earlier this year.

More than 100 countries have announced new reduction targets (including China and India) ahead of the COP26 deadline, while others have not (including Australia and Russia). However, a recent UN Climate report suggests that the current climate targets are still projected to result in a 16% increase in global emissions by 2030 compared to 2010, which would lead to a temperature rise of about 2.7°C by the end of the century. However, the report does not include recent commitments made last week.

Relevance for Canada: Canada is one of several countries to increase its target.

• Canada has committed to reducing emissions by 40% to 45% below 2005levels by 2030, up from a previous target of 30%.
• Recent independent modelling indicates that the government’s current climate plan, if fully implemented, could achieve a 37%-to-41% reduction in Canada’s greenhouse gas emissions by 2030.
• For comparison, the U.S. has committed to reducing emissions by 50% below 2005 levels by 2030, up from its previous commitment of 26% to 28% below 2005 levels by 2025. The EU’s member states and parliament agreed in principle to a legally binding target of reducing emissions by 55% below 1990 levels by 2030, up from a previous target of 40%.

CLIMATE FINANCE

Overview:  A major discussion point of COP26 is expected to be climate financing for developing countries. The Paris Agreement indicates that wealthier nations should pay an increasing amount to less wealthy countries to assist with climate-related investments like flood defense from sea level rise, clean energy development, or the use of energy efficiency retrofits.

At COP15 in Copenhagen in 2009, richer countries pledged that they would collectively provide US$100 billion (CA$123 billion) per year by 2020. Estimates suggest that goal has not been met, and the target likely won’t be reached until 2023. There are also concerns about the quality of climate finance: how much funding is actually new, a reliance on loans instead of grants, and a lack of clarity about what projects are eligible. 

The funding commitments are made on the basis that richer countries’ economic development has, in large part, been enabled by the use of fossil fuels, and therefore these countries should take some responsibility for addressing climate change in less developed nations. 

Relevance for Canada: Canada is one of the countries expected to provide climate financing for developing countries. 

• Between 2015 and 2020, Canada delivered $2.65 billion over that five year period.
• At the G7 leaders summit in June 2021, the prime minister announced that Canada would double its pledge to $5.3 billion over the next five years.
• In July 2021, Canada’s then-environment minister Jonathan Wilkinson, in collaboration with his counterpart in Germany, was tasked to come up with a plan for developed countries to reach the US$100 billion goal. The plan was published last month and estimates that developed countries likely would not meet the goal of US$100 billion annually until 2023, sparking calls for a total of US$500 billion to be mobilized instead across the five-year period between 2021 and 2025. As part of its COP presidency, the U.K. is keeping track ofcountries’ climate finance commitments.

CARBON MARKETS

Overview: Article 6 of the Paris Agreement sets up the guidelines for an international carbon market, where emission reductions can be traded across countries. It contains three mechanisms for trading these kinds of offset credits, two of which are market-based. These are: 

• Article 6.2, where a country can transfer emissions reductions, dubbed “Internationally Transferred Mitigation Outcomes” or ITMOs, to another country and authorize their use towards that country’s Nationally Determined Contribution (the amount of emissions reductions pledged in a given year); 
• Article 6.4, where a centralized “credit” system (known as the Sustainable Development Mechanism, which is to replace the existing mechanism under the Kyoto Agreement) would allow both the public and private sector to generate tradable credits from specific emissions-saving projects. For example, one country could pay another to build a wind farm instead of a coal plant. The first country gets the emission reduction credit to count towards its climate target, and the second gets the benefit of clean power.

Article 6 is the only article in the Paris Agreement that has yet to be operationalized. While significant progress was made at COP25 in Madrid, there is still no consensus on how the system should work. Negotiators hope that talks at COP26 could lead to a resolution. 

Relevance for Canada: The federal government is considering whether and how it might use ITMOs toward its climate targets by complementing domestic emission reduction efforts with reductions taking place in other countries. However, there are challenges around the use of offsets in carbon reduction, and there is contentionaround whether Canada could gain emissions credit from exporting liquefied natural gas.

CLEAN TRANSPORTATION

Overview: COP26 is calling on countries to commit to ensuring all new car and van sales are for zero-emission vehicles by 2035 in advanced markets and 2040 in all other markets. Currently, 16 national and subnational governments accounting for 14% of global passenger vehicle sales have committed to phasing out gas cars by 2040 or earlier. 

As part of the global Drive to Zero campaign, a group of countries led by the Netherlands, including Canada, are also urging leading nations to jointly pursue a global memorandum of understanding to accelerate the manufacturing and adoption of zero-emission medium- and heavy-duty vehicles (such as commercial trucks and buses). This global agreement would aim for 100% zero-emission medium- and heavy-duty vehicle sales between 2040 and 2050.

Relevance for Canada: In June, the federal government set a mandatory target for 100% of all new light-duty car and passenger truck sales to be zero-emissions by 2035. The Liberals followed this up with campaign platform commitments to achieve at least 50% zero-emission vehicle sales by 2030 and require 100% of medium- and heavy-duty vehicles sales to be zero-emission by 2040, where feasible. 

The post Media Brief: COP26 and the implications for Canada appeared first on Clean Energy Canada.

The Liberals, Conservatives, NDP and most recently the Greens have all released climate plans with varying approaches and levels of detail. This media brief provides an overview of the key policies, regulations, investments, and incentives being offered, including emissions targets and the effectiveness of each plan to reach them.

2030 Targets

• The Liberal Party: reduce emissions by 40% to 45% from 2005 levels.
• The Conservative Party: reduce emissions by 30% from 2005 levels (backtracking on our current Paris target).
• The New Democratic Party: reduce emissions by 50% from 2005 levels.
• The Green Party: reduce emissions by 60% from 2005 levels

Does the plan reach the target?

• The Conservative Party’s climate plan, Securing the Environment, has been independently modelled to reach a weakened 30% target. However, the modelling indicates that it is dependent on raising the industrial carbon price to $170 a tonne by 2030, something the party has said it will only do if Canada’s trading partners (notably the U.S. and EU) do the same.
• The Liberal Party’s December 2020 climate update, A Healthy Environment and a Healthy Economy in combination with measures announced in Budget 2021 are projected to achieve emission reductions of 36% by 2030, an assertion verified by the Parliamentary Budget Officer. When the additional measures announced in the new climate platform are included, a “triangulation” of existing modelling done by economist Mark Jaccard suggests they could achieve the 40% target.
• The New Democratic Party’s plan is not accompanied by modelling or enough detail to determine whether the proposed measures would lead to reductions in line with the party’s 50% target. 
• The Green Party’s plan is also not accompanied by modelling, and we do not know whether the proposed measures would lead to reductions in line with the party’s 60% target. 

How much would the plans cost?

Simon Fraser University economist Mark Jaccard modelled the proposed climate plans to determine the impact each would have on Canada’s GDP compared to a scenario where no climate plans were implemented. He determined the following:

• The Conservative Party’s plan would result in 23% GDP growth by 2030 (2 percentage points below a 25% baseline growth rate). 
• The Liberal Party’s plan would result in 22.5% GDP growth by 2030 (2.5 percentage points below the 25% baseline). 
• The New Democratic Party’s plan would result in 18.5% GDP growth by 2030 (6.5 percentage points below the 25% baseline). However, because there was insufficient information in the party’s climate plan to determine how it would meet its target, a number of assumptions were made in order to reach 50% that may not accurately reflect the NDP’s position. 
• The Green Party’s plan would result in 17.5% GDP growth by 2030 (7.5% below the 25% baseline), although this is based on a previous version of the climate plan and does not include all the policies presented in the party’s recently released election platform.

What carbon prices are proposed?

• The Conservative Party: beginning at $20 per tonne and increasing to a maximum of $50 per tonne by 2030.
• The Liberal Party: increasing from $40 per tonne (current level) to $170 per tonne by 2030.
• The New Democratic Party: increasing from $40 per tonne (current level) to $170 per tonne by 2030.
• The Green Party: increasing by $25 per tonne each year from 2022 to 2030, reaching $250 per tonne by 2030.

Key regulations

In addition to putting a price on carbon, the parties say they would employ the following key regulations:

The Conservative Party: 

• A zero-emission vehicle mandate requiring that 30% of new passenger vehicle sales are zero-emission by 2030.
• Maintaining the industrial carbon price for large emitters that reaches $170 per tonne by 2030 (subject to review in 2023).
• Turn the existing Clean Fuels Standard into a low carbon fuel standard, based on B.C.’s, to achieve a 20% reduction in carbon intensity for transport fuels.
• Introducing a renewable natural gas mandate that requires 15% of natural gas consumption to be renewable.
• Working with the U.S. to set a standard for charging and then adding mandatory charging stations or wiring required for chargers to the national building code.
• Proposing minimum North American industrial emissions standards, backed up by border carbon adjustments to prevent carbon leakage and economic activity shifting to countries with lower emissions standards.

The Liberal Party 

Regulations or targets proposed or updated in the last year:

• A revised mandatory target that all new passenger vehicles sold by 2035 be zero-emission.
• A proposed Clean Fuel Standard that requires fossil fuel suppliers to reduce the carbon intensity of the fuel they supply.

Regulations indicated in election platform:

• A requirement that at least 50% of all new passenger vehicle sales be zero-emission in 2030, on par with the U.S.’s new target and en route to 100% zero-emission vehicle sales by 2035. 
• Reaching a net-zero electricity grid by 2035 by implementing a Clean Electricity Standard.
• Capping oil and gas sector emissions at current levels and introducing five-year targets starting in 2025 to reduce emissions in line with a net-zero 2050.
• Requiring oil and gas companies to reduce methane emissions by at least 75% below 2012 levels by 2030.
• Eliminating fossil fuel subsidies by 2023 and developing a plan to phase out public financing for the fossil fuel sector, including from Crown corporations.
• Introducing a Buy Clean Strategy to prioritize the use of low-carbon building materials for public and private infrastructure projects.
• Moving forward on applying border carbon adjustments to carbon-intensive imports in collaboration with key trading partners.

The New Democratic Party: 

• Establishing multi-year national and sectoral carbon budgets as a key guiding framework to develop Canada’s path to 2030 and beyond.
• Setting a target of net-zero electricity by 2030.
• Requiring that 100% of all new car sales be zero-emission by 2035.
• Electrifying transit and other municipal fleets by 2030.
• Continue with and also look at ways to strengthen the proposed Clean Fuel Standard that requires fossil fuel suppliers to reduce the carbon intensity of the fuel they supply.
• Eliminating fossil fuel subsidies and redirecting these funds to low-carbon initiatives, while putting in place legislation to prevent future governments from reversing decisions.
• Ensuring that provincial methane regulations are equivalent with federal regulations, and increasing the ambition of those targets in the 2025 to 2030 period.
• Requiring the use of low-carbon, Canadian-made steel, aluminum, cement and wood products for infrastructure projects.
• Introducing a border carbon adjustment on imports from countries without a carbon price.

The Green Party:

• Ending the extraction of fossil fuels, including cancelling new pipeline and oil exploration projects, ending subsidies to the fossil fuel sector, and phasing out bitumen production between 2030 and 2035.
• Enacting a detailed carbon budget reflecting Canada’s based on the 60% target. 
• Ensuring that 100 % of Canadian electricity is produced from renewable sources by 2030.
• Banning the sale of all internal combustion engine passenger vehicles by 2030.
• Mandating a faster transition to renewable energy in every sector.
• Banning the export of thermal coal. 
• Introducing carbon border adjustments.

Investments of note

The Conservative Party: 

• $1 billion in small modular reactors, a new nuclear technology.
• $5 billion in carbon capture, utilization and storage technology and a tax credit to accelerate deployment.
• $1 billion in EV manufacturing, including batteries, parts, and electric trucks.
• Investment in electricity transmission infrastructure to support EV growth.

The Liberal Party

Investments in the last year:

• Investments in clean industries, including $8 billion into the Net Zero Accelerator Initiative.
• A $2.75 billion “Zero Emission Transit Fund” to electrify transit and school buses.
• $300-million for consumer electric vehicle rebates.

Investment promises made in election platform:

• Extending the EV consumer rebates of up to $5,000 for another three years.
• Building 50,000 more charging stations across the country.
• Investing $2 billion in a Futures Fund for Alberta, Saskatchewan and Newfoundland and Labrador to create jobs.
• Creating a Clean Jobs Training Centre to help workers upgrade or gain new skills.
• Working to attract near-term multi-billion-dollar investments in minerals processing and cell manufacturing.
• Launching a Canada-U.S. Battery Alliance to help build an “integrated, world-scale battery supply chain.”
• Doubling the Mineral Exploration Tax Credit for materials on the Canadian list of critical minerals, such as those needed to manufacture batteries.

The New Democratic Party: 

• Extending federal incentives for EVs, waiving the federal sales tax on EV purchases, and offering up to $15,000 per family for made-in-Canada vehicles.
• Building out Canada’s charging infrastructure and helping cover the cost of installing a charger.
• Providing dedicated employment support with expanded EI benefits, retraining and job placement services for workers affected by the energy transition.
• Boosting cleantech research and manufacturing with new funding and incentives.
• Creating a centre of excellence for the research and development of zero-emission vehicles and batteries.
• Using funding, incentives and Buy Canadian procurement to support Canadian manufacturing in batteries and clean technologies. 

The Green Party:

• Investing in electric vehicle charging stations and incentives for new and used EVs.
• Investing $720 million by 2024 to develop regional rail networks, including electric high-speed rail in the Toronto-Ottawa-Montreal-Quebec City triangle and the Calgary-Edmonton corridor.
• Creating a permanent, dedicated federal public transit fund of $3.4 billion annually starting in 2026.
• Increasing climate finance to $US4 billion per year to support climate mitigation, adaptation, and loss and damage in developing countries.
• Establishing a federally funded Green Venture Capital Fund of $1 billion to support viable small local green business startups.

The post Media brief: How do the federal parties stack up on climate? appeared first on Clean Energy Canada.

Clean Energy Canada is a climate and clean energy program within the Morris J. Wosk Centre for Dialogue at Simon Fraser University. Through media briefs, we aim to provide journalists with useful factual and contextual information related to Canada’s clean energy transition. Please use this as a resource, and let us know if there are any topics that you would like to see for future media briefs. 

A few weeks ago, the federal government announced a consultation on a proposed greenhouse gas offset system. Such a scheme would follow in the footsteps of other similar systems around the world, including in Alberta and B.C. Offsets allow emitters to purchase “credits” representing reductions in emissions by another emitter, as an alternative to reducing their own emissions. Offsets offer a carbon polluter (like the operator of a steel plant) an additional option to comply with government rules that limit carbon pollution. 

While purchasing offsets can help emitters offset their pollution in a low-cost way, studies have shown that in many cases, offsets do not create the additional emission reductions that were planned. How offsets are created and the extent to which they are used dictates their effectiveness at reducing pollution. This media brief provides a summary of offsets, examples of current offset use, their potential benefits and drawbacks, and examples of best offset practices. 

WHAT ARE OFFSETS?

• A carbon offset is a reduction in emissions made in order to compensate for emissions created elsewhere.Offsets are measured in tonnes of carbon dioxide-equivalent (CO₂e), which represents either a one-tonne reduction of carbon dioxide or its equivalent in other greenhouse gases.
• Carbon offsets can be generated and used under government-approved frameworks, for example to help industrial emitters who continue to emit carbon pollution meet their compliance obligations under climate policies. Separately from these programs, some private-sector companies also offer customers the option of offsetting emissions from using their products or services on a voluntary basis, for example airlines allowing flyers to pay extra to offset their flight.
• Carbon offsets have been enabled under international law in the 1997 Kyoto Protocol and were first used internationally in 2001. An approach to use them also exists under Article 6 of the 2016 Paris Agreement. World leaders attending the 2021 United Nations Climate Change Conference later this year are expected to discuss how to operationalize Article 6 going forward.
• Not all actions taken to generate offsets lead to permanent reductions of emissions.^1,2 Therefore, the following types of offsets need to be distinguished: 
  • Temporary: where carbon is stored using methods that release the carbon back into the atmosphere at a later date. For example, this includes storing carbon in forests or oceans, or capturing carbon at industrial facilities for subsequent reuse in products like concrete or synthetic fuels.
  • Permanent: where emissions are either prevented or removed from the atmosphere and stored underground so that they cannot be released back into the atmosphere. This includes using renewable energy to replace fossil fuels, improvements to energy efficiency, or capturing carbon at an industrial site or from the atmosphere and injecting it into an underground reservoir for permanent storage.
• The global experience with offsets is mixed, and many of the largest offset projects—particularly those under the first international offset program (the Clean Development Mechanism) enabled under the Kyoto Protocol—failed to achieve their intended emission reductions.³ However, more recent studies suggest that offsets could reduce emissions to some extent so long as they are designed with the principles outlined below alongside proper checks and balances.^4,5

HOW ARE OFFSETS USED?

Policies that employ carbon offsets are in use around the world. Below are several examples of how offsets have been used in Canada and internationally: 

• B.C. greenhouse gas emission offset projects: B.C. has operated an emissions offset system since 2009 to attain carbon-neutral government operations.⁶ The program has allowed some Indigenous communities to sell offsets to protect their territories from deforestation while generating revenue. While the program’s early offsets were criticized for a lack of additionality (meaning they credited actions that would have happened anyway), the program has operated for over a decade, primarily using offsets from the protection of the Great Bear Rainforest.^7,8
• California’s Compliance Offsets Program: The California program issues offset credits for use within the Western Climate Initiative’s cap and trade system (a form of carbon pricing) that Quebec also partakes in. Emitters may use offset credits to meet a maximum of 8% of their emission reduction requirements—in other words, a small proportion.⁹
• European Union Emissions Trading System: The world’s largest cap and trade program allowed polluters to draw on offsets to some extent in the past. Since the system’s launch in 2005, the EU has gradually placed limits on the types of projects from which credits are accepted and on the amount of offsets used for compliance in its carbon market. Starting this year, offsets are no longer expected to be used.¹⁰

THE BENEFITS OF USING OFFSETS

• Creates additional avenues for emitters to reduce their carbon footprint until new clean technologies are developed and commercially available. For example, offsetting process emissions in the production of cement until the technology for capturing carbon in cement kilns is more mature, or remote communities using offsets until they have identified solutions to switching off of diesel power generation.
• Helps emitters meet their emissions reductions targets in a cost-effective way.¹¹
• Provides opportunities for Indigenous peoples and landowners to derive revenue from stewardship projects on their lands by providing a financial incentive for habitat protection and conservation.¹²

THE CHALLENGES OF USING OFFSETS

• Emission reductions from offsets can be difficult to measure and are therefore not always properly quantified.¹³ One of the most important but also most difficult tasks is the determination of whether offset projects fulfill the criterion of “additionality.” This means: 
  • If offset credits are generated from actions that would have happened anyway, their subsequent use for compliance does not actually reduce emissions.
  • Determining whether an offset is truly “additional” requires the difficult assessment of how emissions would have developed in the absence of the intervention claimed to have reduced emissions.¹⁴
• Some offsets have been shown to lack “additionality.” Offsets generated under the United Nations Clean Development Mechanism have been criticized for their lack of additionality.³ Significant uncertainty has also been identified around the extent of true emission reductions from California’s offsets program.¹⁵
• Offsets can also provide a disincentive for an emitter to invest in carbon reduction (i.e. they buy offsets instead of reducing their own emissions).¹⁵
• Finally, studies have shown potential negative effects on climate change mitigation, such as cases where planting trees on natural grasslands and peatlands can add more carbon to the atmosphere than they take up. Other research has highlighted the risks of offsets potentially leading to negative outcomes for biodiversity, for example by introducing invasive species or negatively affecting key ecosystem processes.^16–18

A SUMMARY OF BEST PRACTICES

• High-quality offsets represent credits generated from projects that produce real, independently verified, quantifiable, permanent, and additional emission reductions. If there is a compelling reason to use temporary offsets (e.g. Indigenous reconciliation), the lack of permanence should be accounted for.
• Offsets should be employed only to a limited extent so that emitters are still incentivized to focus on cutting their own emissions.
• Offsets should not be used to grow industries that produce products that increase global emissions when emission-free alternatives are available. 

REFERENCES

1. Thamo, T. & Pannell, D. J. Challenges in developing effective policy for soil carbon sequestration: Perspectives on additionality, leakage, and permanence. Climate Policy 16, 973–992 (2016).

2. Richards, K. R. & Huebner, G. E. Evaluating protocols and standards for forest carbon-offset programs, Part A: Additionality, baselines and permanence. Carbon Management 3, 393–410 (2012).

3. Gillenwater, M. & Seres, S. The Clean Development Mechanism: A review of the first international offset programme. Greenhouse Gas Measurement and Management 1, 179–203 (2011).

4. Seddon, N. et al. Getting the message right on nature‐based solutions to climate change. Global Change Biology 27, 1518–1546 (2021).

5. Chausson, A. et al. Mapping the effectiveness of nature‐based solutions for climate change adaptation. Global Change Biology 26, 6134–6155 (2020).

6. Carbon Neutral Government program requirements. Government of British Columbiahttps://www2.gov.bc.ca/gov/content/environment/climate-change/public-sector/carbon-neutral.

7. Annual Reports & CNARs Table. Government of British Columbiahttps://www2.gov.bc.ca/gov/content/environment/climate-change/public-sector/cnar/annual-reports-cnars-table.

8. An audit of carbon neutral government. The office of the Auditor Generalhttps://www.bcauditor.com/sites/default/files/publications/2013/report_14/report/
OAG%20Carbon%20Neutral.pdf (2013).

9. Compliance Offset Program. California Air Resources Board https://ww2.arb.ca.gov/our-work/programs/compliance-offset-program/about.

10. Use of international credits. European Commissionhttps://ec.europa.eu/clima/policies/ets/credits_en (2016).

11. Bushnell, J. B. The Economics of Carbon Offsets. The Design and Implementation of U.S. Climate Policy (2012).

12. Forest Carbon Credits – Economic Revenue for Forest Conservation. Coastal First Nationshttps://coastalfirstnations.ca/wp-content/uploads/2017/06/CFN-Carbon-Credit-info-brochure-.pdf.

13. Federal carbon-offset proposal will likely give illusion of progress, even as it increases emissions. CBC https://www.cbc.ca/news/opinion/opinion-carbon-offsets-1.5951395 (2021).

14. Bento, A., Kanbur, R. & Leard, B. On the importance of baseline setting in carbon offsets markets. Climatic Change 137, 625–637 (2016).

15. Haya, B. et al. Managing uncertainty in carbon offsets: Insights from California’s standardized approach. Climate Policy 20, 1112–1126 (2020).

16. On the misuse of nature-based carbon offsets. Nature-based Solutions Initiativehttps://www.naturebasedsolutionsinitiative.org/wp-content/uploads/2021/04/Greenwashing-response-final-version.pdf.

17. Bradshaw, C. J. A. et al. Brave new green world – Consequences of a carbon economy for the conservation of Australian biodiversity. Biological Conservation 161, 71–90 (2013).

18. Lindenmayer, D. B. et al. Avoiding bio‐perversity from carbon sequestration solutions. Conservation Letters 5, 28–36 (2011).

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