November 2021Clean Fuel Regulations : Path ForwardENGAGEMENT ON 
LAND USE AND BIODIVERSITY CRITERIA 
2PROPOSED UPDATES (1) 
Feedstock Type
•Agriculture residues and by -products, as well as forest biomass from fire prevention activities, are not subject to 
LUB and moved to Type 2 feedstock
•"Short rotation woody biomass crop" is defined by setting a rotational period <25 years to differentiate these 
feedstock from those that are forest -based
All Feedstock Criteria
•Legality clause was removed to retain the intended scope of LUB
•For criteria recognized at national level: criteria were altered from solely recognizing existing legislation to 
imposing equivalent requirements across jurisdictions with and without relevant legislation
•“Protected areas” exception applications may be approved by recognized certification bodies, in addition to the 
Minister
Forest Criteria 
•Removed “old -growth” terminology from forest criteria as there is lack of consensus on the definition, and 
instead defined this term using key characteristics of environmental importance that they exhibit
•Artificial regeneration timeframe changed from 2 years to 4 years
•Chemical and fertilizer application removed from the regeneration criterion as it is adequately addressed by the 
water, soil, and biodiversity forest criteria
3PROPOSED UPDATES (2) 
Legislative Recognition 
•Added more implementation details for the legislative recognition process
–Consultation process will vary on a case -by-case basis (desk review, PT consultation, expert 
consultation , public consultation )
–An accepted legislative recognition application will be valid for 7 years
–Accepted legislative recognition applications can only be used as proof of compliance if the 
feedstock is obligated under the piece of recognized legislation
•The following LUB criteria will receive national level aggregate compliance in Canada
–Watercourse connectivity requirement in Fisheries Act: s.34.3(2)
–Damaging Agents requirement in Plant Protection Act: s.6(1) 
•Engagement with US industry associations will be used to determine if equivalent US 
requirements exist
4PROPOSED UPDATES (3)
Material Balance and Declarations 
•Declarations changed from a per -batch basis to per -contract period, with a maximum 
aggregation period of one year
•Material balancing verification will occur as of January 1, 2023
•LUB requirements (including declarations) will come into force on January 1, 2024
•Removed requirement that foreign suppliers must send material balancing calculations and 
reports to importers
–Can be kept on site but must provide promptly to ECCC or a third -party verifier when requested
•Domestic producers will now report their material balancing calculations in the Material 
Balancing Report annually instead of in the quarterly Credit Creation Report
5ENGAGEMENT ON QUANTIFICATION METHODS 
6PROPOSED UPDATES (1)
Compliance Category 1 crediting opportunities
•Compliance Category 1 governs credits for actions throughout the lifecycle of a liquid fossil fuel that reduce its CI 
through GHG emission reduction projects
•In line with the narrowed scope of the CFR and the focus on fuels mainly used in transportation, no credits will be 
provided for GHG reduction or removal projects that reduce the lifecycle CI of gaseous or solid fuels .
QMs for CO2 capture and permanent storage & enhanced oil recovery with CO2capture and 
permanent storage
•CO2emissions must be captured at a facility that produces liquid fossil fuels or at a hydrogen plant, prorated based 
onthe portion of hydrogen supplied to a facility that produces liquid fossil fuels
•Direct air capture is no longer an eligible source of CO2for CFR crediting purposes, however , it is expected to be 
incented under the federal offset system
•No more distinction between combustion emissions and process emissions is necessary, simplifying 
thequantification method
Credits for international GHG reduction projects 
•Crediting emissions reductions projects for US (and other foreign) facilities that produce liquid fossil fuels for the 
portion of fuel supplied to Canada 
•Will ensure that foreign projects are comparable to Canadian projects in effectiveness and meeting the CFR 
objectives
7PROPOSED UPDATES (2)
Project -type specific QMs: CCS, EOR, Low -CI Electricity Integration, Co -processing
•No change to the crediting period
–No end to the crediting period for coprocessing
–For CCS, initial crediting period of 20 years
–For all other projects (including EOR), initial crediting period of 10 years
–One 5 -year renewal provided QM still exists
•No change to the additionality assessment:
1. Beyond regulatory requirements (i.e. no regulatory overlap)
2. Must deliver reductions + must not earn CFR credits under another category
3. A) Penetration rate < 5% or 5 facilities
B) Supplemental barrier testing (financial, technological)
•A QM for low -CI hydrogen will be developed by Summer 2022
Generic QM
•No change to the crediting period: 10 years + one 5 -year renewal
•Credits can be used to meet 10% of annual obligation
•Streamlined additionality criteria: project must be additional to most stringent regulations in 
Canada
8PROPOSED UPDATES (3)
Transition from the generic QM to a Project -Type Specific QM
•Existing projects have the choice ( i.e. it is not an obligation) to stay under the G eneric QM 
or move to the Project -Type Specific QM for the duration of the initial crediting period
–Extensions and any new projects must use the Project -Type Specific QM
•Project proponent submits new shorter application for recognition
–Additionality assessment already performed at project type level
•Remaining crediting period = Crediting period allowed under Project -Type Specific QM 
(usually 10 years) –Years for which project already created credits
•Credits may start to be created under the Project -Type Specific QM with no 10% limit on 
use
•Unused banked credits previously created under the Generic QM would still be subject to 
the 10 % limit
•The quantification rules and the eligibility criteria may be different under the Generic QM 
and the Project -Type Specific QM, resulting in more or less credits after the transition
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