B.C.'s Low Carbon Fuel Standard (LCFS) requires fuel suppliers to reduce the carbon intensity of the transportation fuels they supply in British Columbia by 1.09% annually from 2020 to 2030 to reach a carbon intensity reduction target of 20% by 2030.

The LCFS is a market-based approach to achieving emission reductions that:

• helps reduce the environmental impact of transportation fuels;
• contributes to a new, low-carbon economy;
• diversifies B.C.'s transportation fuel supply;
• decreases greenhouse gas emissions by establishing a sustainable market for low-carbon and renewable fuels; and
• spurs market transformation of B.C.'s transportation fuel supply toward renewable and lower-carbon fuels.

The carbon intensity of a fuel refers to the greenhouse gas emissions associated with its production and use, as determined by a lifecycle assessment. Carbon intensity is represented in grams of carbon dioxide equivalent per megajoule of produced fuel. A lifecycle assessment considers emissions associated with each stage of a fuel product's life and all materials and energy used from feedstock production or acquisition through to fuel use.

Fuel suppliers' compliance with annual carbon intensity reduction targets is calculated by assessing compliance units. The compliance units are proportional to the emissions a fuel generates over its life cycle. Low-carbon fuels increase a supplier's compliance balance, while high-carbon fuels decrease it. At the end of each compliance period, suppliers must have a balance of zero or a positive number of compliance units to avoid non-compliance penalties.

A key feature of the low-carbon requirement is its flexibility. Fuel suppliers can reduce the carbon intensity of their fuels and meet the low-carbon requirement in a number of ways, including by:

• supplying more fuels that have a lower carbon intensity than fossil-based gasoline and diesel, such as ethanol from corn, biodiesel from canola, renewable diesel from used cooking oil, electricity, hydrogen and renewable natural gas from agricultural waste;
• improving agricultural practices for growing biofuel crops; and
• acquiring low-carbon fuel credits from another supplier who supplies low-carbon fuels.

Fuel suppliers can also earn compliance credits through agreements with the Ministry of Energy, Mines and Low Carbon Innovation for undertaking activities that increase the production and use of low-carbon fuels and reduce greenhouse gas emissions. For example, in 2020, the Province entered into agreements to support 22 projects with potential new investments exceeding $2.19 billion, including low-carbon fuel and hydrogen production and supply projects, and electrification projects. 

Upon completion, the projects are expected to supply fuel that will reduce lifecycle greenhouse gas emissions by approximately four million tonnes of carbon dioxide equivalent per year. If successful, seven of these projects will lead to the annual production of over 880 million litres of low-carbon renewable fuel in B.C. by 2025.

The ministry has a variety of compliance and enforcement tools to gather information, obtain compliance, and deter non-compliance with the LCFS, including audits, inspections, monetary penalties and court prosecution. Information on compliance and enforcement is available online.

The ministry consults regularly on the LCFS with all suppliers and producers, and conducts focused reviews with all interested stakeholders on outstanding issues every three years.

Learn More:

For more information on British Columbia’s Low Carbon Fuel Standard, including compliance and enforcement activities, visit: https://www2.gov.bc.ca/gov/content/industry/electricity-alternative-energy/transportation-energies/renewable-low-carbon-fuels

Fourteen years ago, the existing Greenhouse Gas Reduction (Renewable and Low Carbon Fuels) Act introduced a new approach to environmental policy implementation that had little precedent to draw from.

It is now the single largest contributor to reducing greenhouse gas emissions in B.C. and achieving CleanBC goals, and a proven method of intervention in B.C.'s fuel market to effect lasting change.

Given the negative environmental consequences of high-carbon fuels and the resulting need for significant reductions in greenhouse gas emissions, more needs to be done to provide incentives for the use of low-carbon alternative fuels. Transformation requires an evolving mix of strategic interventions.

The Government of British Columbia has introduced legislation to replace the existing act with a new low-carbon fuels act. The new act will make the legislation easier to understand, administer and enforce, and will accelerate B.C.'s transition to low-carbon energy.

Proposed changes to the Low Carbon Fuel Standard (LCFS) include:

• broadening the scope of the LCFS to include fuel supplied for aviation and marine use. This would ensure that over time, all fossil-derived transportation fuels supplied in B.C. would be subject to carbon-intensity requirements and generate market opportunities for a wider range of low-carbon fuels.
• authorizing the provision of compliance credits for direct air-capture and permanent sequestration of greenhouse gases. This would stimulate investment in technologies that remove carbon dioxide from the air.
• requiring some utilities to direct a portion of their revenues from the sale of low-carbon fuel credits toward programs dedicated to increasing the use of low-carbon products. This would provide a funding stream for utility rebates, incentives and other investments to increase the uptake of electric vehicles.
• enabling those who are not fuel suppliers to earn low-carbon fuel credits and engage in credit trading. This would provide a new funding mechanism for businesses, communities, academic institutions and other parties that are commercializing new fuel production methods or developing clean-energy technologies that could reduce greenhouse gas emissions.
• providing greater clarity by making the LCFS easier to administer and enforce, thereby enhancing understanding and providing regulatory certainty for the Province, for fuel suppliers and for other parties making investments in low-carbon fuels.

The new legislation implements a commitment in the CleanBC Roadmap to 2030 to expand and increase the effectiveness of the LCFS and supports the development of production capacity for 1.3 billion litres of made-in-B.C. renewable fuels per year by 2030.

Parkland’s Burnaby refinery was the first facility in North America to use existing infrastructure to produce low-carbon fuels by co-processing renewable feedstock, such as canola oil and oil derived from animal fats (tallow) alongside crude feedstock.

This has resulted in biofuels with lower carbon intensity and greenhouse gas emissions. Parkland’s co-processed fuels have approximately one-eighth of the carbon intensity of conventional fuels and can be used in existing vehicles without any changes or modifications.

Building on this success, Parkland is announcing plans to expand its co-processing activities and build British Columbia’s largest renewable diesel complex.

These plans will increase production of low-carbon fuels to approximately 700 million litres per year by:

• expanding existing co-processing capacity to approximately 5,500 barrels per day; and
• building a stand-alone renewable diesel complex within the Burnaby refinery capable of producing approximately 6,500 barrels per day of renewable diesel.

The cost of these projects is estimated to be approximately $600 million.