Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

The oil industry and the Alberta government say Ottawa’s removal of gaseous and solid fuels from Canada’s long-awaited federal Clean Fuel Standard will avoid an exodus of investment in the fossil fuel sector.

The federal Liberals’ climate change plan, released last Friday, proposed to triple the carbon tax and spend more than $15-billion to pass Canada’s 2030 greenhouse gas emissions reduction targets. But it also significantly dialled back its original plans for the Clean Fuel Standard – a complicated policy to provide emissions reduction incentives and create a credits-trading market – narrowing its scope to focus only on liquid fossil fuels such as gasoline, diesel and oil.

Ottawa is expected to release more details on the standard this week.

Story continues below advertisement

The goal of the CFS is to reduce the emissions content of fuels by targeting pollution associated with all stages of fuel production and use, from extraction through processing, distribution and end-use.

The change means alternative fuel, such as hydrogen, which Ottawa is eyeing as part of Canada’s transition to cleaner energy, will no longer be part of the standard. Officials said the change was possible because the overall carbon tax is increasing.

Tim McMillan, president and chief executive of the Canadian Association of Petroleum Producers, said in an e-mail that narrowing the CFS was a “positive decision” that reflected industry concerns about driving away investment.

Alberta Environment Minister Jason Nixon also applauded the move. He said the province, which has been battered by tumbling oil prices, has been pushing for this for years.

“From Alberta’s perspective – and certainly from industries in our province’s perspective – the Clean Fuel Standard that was originally being proposed would have had significant and long-term negative impacts on our industries,” he told media Friday.

While Mr. Nixon would prefer Ottawa scrap the CFS altogether, he said his department will continue to work with the office of federal Environment Minister Jonathan Wilkinson on Alberta’s concerns with the standard.

“Our suggestions are intended to address potential unintended consequences of the regulation, like losing investment and revenue to other jurisdictions and exposure for our trade-exposed industries,” he said. “At the very least, we need to continue to make sure that it will not negatively impact job creators in the province.”

Story continues below advertisement

In Mr. Nixon’s main beef with the CFS, he believes the standard amounts to layering one carbon tax on top of another, which will scare away investment by making it more expensive to do business in Canada. Alberta has joined other provinces to fight the federal carbon tax in court, and criticized the federal government last Friday over plans to increase pollution pricing to $170 a tonne by 2030.

Jennifer Winter, director of energy and environmental policy with the University of Calgary’s School of Public Policy, said there is “absolutely” overlap between the CFS and carbon pricing, in that it’s two policies with the same objective – reducing emissions.

“There is still overlap, and there is research out there – even specifically for Canada – that a Clean Fuel Standard is a more expensive way to have emissions reductions compared to a carbon tax,” she said.

A 2018 report from Canada’s Ecofiscal Commission, a group of policy-minded economists from across the country, said a CFS would likely be “considerably more expensive than a carbon price-based approach” for the transportation sector.

Although scant details on the CFS were available Friday when Ottawa released its new climate plan, the proposal said the federal government would provide incentives for technologies such as carbon capture and storage and renewable energy, and “create economic opportunities for lower-carbon fuel providers,” such as biofuel producers. The CFS will also promote the uptake of lower-emission vehicles.

The federal government is also planning several investments alongside the CFS, including a $1.5-billion fund to increase the production and use of low-carbon fuels including hydrogen, and renewable natural gas and diesel. It also cites the coming federal hydrogen strategy, which will set out a path for integrating low-emitting hydrogen across the Canadian economy before the end of the year.

Story continues below advertisement

Ian Cameron, press secretary to federal Natural Resources Minster Seamus O’Regan, confirmed the hydrogen strategy is coming soon.

Mr. McMillan from CAPP said new technologies – particularly ones developed by the natural gas and oil industry, such as carbon capture – “will play a major role in ensuring Canada can meet its domestic emissions reduction goals” while also providing lower-emission fossil fuels to world markets.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies