As part of Clean Air Day, the Government of British Columbia is announcing changes to the greenhouse gas reduction regulation to encourage more fleet operators to switch from diesel and gasoline to cleaner-burning natural gas to run their buses, trucks and marine vessels.
A natural gas vehicle produces 20% to 30% fewer greenhouse gas emissions compared to a gasoline or diesel vehicle.
The changes will allow utilities to expand incentives to fleet operators to convert to natural gas as their primary or secondary fuel, and advance the development of more natural gas fuelling stations.
The greenhouse gas reduction regulation under the Clean Energy Act was introduced in 2012 and allows utilities to make time limited investments in clean-energy transportation and infrastructure to reduce greenhouse gas emissions and help diversify and increase the market for natural gas in British Columbia’s transportation sector, including opportunities to:
- Offer incentives (grants or zero interest loans) for transportation fleets to purchase compressed natural gas (CNG) or liquefied natural gas (LNG) vehicles, buses, trucks or ferries.
- Offer incentives for fleets to upgrade their vehicle maintenance facilities to be natural-gas-safe.
- Build, own and operate compressed natural gas fuelling stations or LNG fuelling stations.
To date the incentive program has resulted in commitments for more than 500 natural gas vehicles and vessels that will displace approximately 36 million litres per year of diesel fuel consumption and reduce carbon dioxide emissions by 42,000 tonnes per year.
The updates to the regulation will allow for shifts in the allocation of incentives and investments within the previously-approved total spending caps to promote continued development of a domestic market for natural gas in the transportation sector, and will:
- Extend the existing incentive programs by one year to March 31, 2018.
- Allow a utility to spend up to $5 million on pilot programs to convert diesel engines in medium and heavy duty vehicles to also use natural gas.
- Remove the existing cap of $11 million on expenditures for LNG powered marine engines to allow the incentive amounts to be applied to all eligible vehicles including marine.
- Make the eligibility criteria and grant and loan structure for replacement of diesel engines more flexible to encourage greater use of natural gas powered engines.
- Facilitate the construction of natural gas fuelling station infrastructure.
FortisBC has started construction of a $400 million expansion to increase natural gas liquefaction capacity at the Tilbury LNG facility to meet future domestic transportation and export demand, including LNG supply to BC Ferries.
In February 2015, BC Ferries signed a 10-year contract with FortisBC to supply LNG for three new dual-fuel ferries, capable of running on LNG or diesel, that are currently under construction. FortisBC provided BC Ferries with $6 million in incentive funding toward the three new vessels. The incentive funding was made possible by the greenhouse gas reduction regulation.
Promoting natural gas as a transportation fuel is a key action in British Columbia’s Natural Gas Strategy and reduces greenhouse gas emissions.
Bill Bennett, Minister of Energy and Mines -
“Natural gas is cheaper and cleaner than traditional fuels, reducing transportation costs and greenhouse gas emissions. We’re updating the greenhouse gas reduction regulation to give utilities like FortisBC more flexibility to expand incentives to fleet operators to convert their trucks, buses and ferries to natural gas.“
Rich Coleman, Minister of Natural Gas Development -
“Developing a market for natural gas transportation in B.C. using our abundant supply of resources makes economic sense for the province. We are creating jobs and economic development by making it easier for the transportation sector to use natural gas.”
Michael Mulcahy, president and CEO, FortisBC -
“FortisBC is committed to growing the natural gas for transportation market in British Columbia. Natural gas vehicles can save between 25 to 50 per cent in fuel costs compared to diesel. Natural gas also burns cleaner, helping B.C. meet its carbon reduction goals.”
British Columbia’s Natural Gas Strategy: http://www.empr.gov.bc.ca/OG/NGS/Pages/default.aspx
Ministry of Energy and Mines