QUANTIFICATION METHODS (QM)
Nov 25, 2021
Multi Stakeholder Consultative 
Committee (MSCC)DISCLAIMER
•This presentation provide guidance only.
•It does not in any way supersede or modify the Canadian Environmental 
Protection Act , 1999 or the proposed Clean Fuel Regulations (CFR).
•In the event of an inconsistency between this document and the Act or 
proposed Regulations, the Act and the proposed Regulations prevail .
•This presentation and the draft quantification methods include references 
to the Proposed Regulations. These references may change and the final 
Clean Fuel Regulations may be different than the proposed Regulations.
2CONTENT
•Introduction
–Proposed Updates
–International CO2e emissions reduction projects
•Overview of the Generic QM
•Overview of the QM for Enhanced Oil Recovery with CO2
Capture and Permanent Storage (EOR ) 
•Overview of the QM for Co -processing in Refineries
The presentation and the draft QMs will be made 
available on the CFS Google Drive in folder 15.PROPOSED UPDATES
Compliance Category 1 crediting opportunities
•Compliance Category 1 governs credits for actions throughout the lifecycle of a liquid fossil fuel that reduce 
its carbon intensity (CI) through CO2e emissions 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 CO2e emissions 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 Fossil Fuel Facility or at a hydrogen plant, prorated based on the 
portion of hydrogen supplied to a Fossil Fuel Facility.
•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.
4The definition of Fossil Fuel Facility was reviewed: a facility that produces, processes, 
stores, transports or distributes finished fossil fuels that are in the liquid state at standard 
conditions or petroleum feedstocks upstream of refining. INTERNATIONAL CO2E REDUCTION PROJECTS 
•Crediting emissions reductions projects at fossil fuel facilities in US or in other 
countries, prorated based onthe portion of liquid fossil fuel or crude oil supplied 
to Canada. 
•Facilities in jurisdictions outside of Canada will have a mechanism to have their 
projects recognized.
–The draft QMs only apply to projects carried out in Canada, but can be adapted for other 
jurisdictions as part of this mechanism, ensuring the projects are comparable to Canadian 
projects in effectiveness, requirements, and meeting the CFR objectives.
5QMS FOR LOW -CI HYDROGEN
•References used as a starting point:
–Low Carbon Fuel Standard Regulation in California (Renewable Hydrogen Credit 
Program)
–Specifications for Fuel LCA Model CI calculations
•Decision points include:
–CO2captured for CCS or EOR projects: should it be moved under this QM or stay under 
the QMs for CCS and EOR
–Inclusion of hydrogen used as a fuel
•Risk of double counting with hydrogen creating gaseous class credits under compliance category 2
•Not always possible for a hydrogen producer to distinguish hydrogen used as a feedstock or as a fuel
–Requirements related to shared hydrogen pipelines
–When hydrogen is used as feedstock, selection of the baseline
•Historical CI value or dynamic CI value to take into account future improvement
•Pre-defined CI value or facility -specific CI value for hydrogen produced from natural gas
6GENERIC QUANTIFICATION METHOD 
(QM)
Nov 25, 2021
Multi Stakeholder Consultative 
Committee (MSCC)CONTENT
•Introduction
•Transition from the generic QM to a specific QM
•Eligibility
•Streamlined Additionality Criteria –Regulatory Overlap
•Crediting
•Application and Approval Process
•Boundary
•Selection of the Baseline
•Emission Reduction QuantificationINTRODUCTION
Purpose
•Incent early 
investments and 
innovative 
technologies.Context
•The Generic QM 
aims to strike a 
balance between 
providing sufficient 
guidance to project 
proponents to 
develop their own 
quantification for 
the project, while 
still providing 
flexibility given the 
wide range of 
projects.Limit on Use
•A primary supplier 
may use credits 
created under this 
quantification 
method (QM) to 
satisfy up to 10% 
of its annual 
reduction 
requirement.Examples
•Energy efficiency
•Electrification
•Fuel switching
•Methane
•Combined heat 
and power 
systemsTRANSITION FROM THE GENERIC QM TO A SPECIFIC QM
•Existing projects have the choice (i.e. it is not an obligation) to stay under the Generic 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 under the Generic QM
•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.
10ELIGIBILITY -GENERAL
•Please refer to paragraphs 28(1)(a) to (c) and subsections 
28(3) and 30(1) of the proposed Regulations for general 
eligibility and ineligibility criteria.
•In addition, the following projects types are not eligible for 
credit creation under this QM:
–A project of a type that is already eligible to create credits under a 
specific QM;
–Virtual power purchase agreements for low -CI electricity;
–Electricity or thermal energy transferred;
–Book and claim accounting for RNG;
–Carbon, capture, utilization and storage technologies.
11SPECIFIC ELIGIBILITY AND INELIGIBILITY CRITERIA
Eligible Ineligible
Energy Efficiency 
and
Electrification•Project involves physical piece of equipment which 
was assembled and consumes energy or a system 
control device or equipment having an effect on 
energy consumption. In addition, one of the following:
•Evidence that the end of life of the equipment or
device in the baseline occurs after the end of the 
period for which credits are being awarded;
•Evidence that there are multiple equipment options for 
the project, and the equipment or device to be installed 
is more efficient than standard industry practice.•Best practices in equipment 
operation
•Change in equipment as a 
result of maintenance
Fuel Switching •The project involves switching from a higher CI fuel 
to a lower CI fuel, other than a combined heat and 
power project.
•In the case of a fuel switch to a fuel derived from 
biomass , the fuel meets the land use and biodiversity 
criteria set out in section 48 of the proposed 
Regulations.•Actions which are eligible to 
create credits under another 
QM or compliance category 
(except for gaseous fuels 
under CC2) under the 
proposed RegulationsSPECIFIC ELIGIBILITY AND INELIGIBILITY CRITERIA
Eligible Ineligible
Methane •The project involves the installation of hydrocarbon gas conservation 
equipment or equipment that routes a source of hydrocarbon gas that 
was vented, flared or destroyed before the project to an existing 
hydrocarbon gas conservation equipment.
•The provincial or territorial jurisdiction has not directed the licensee, 
operator or approval holder to conserve gas that would have been 
flared, vented or destroyed.
•In the case of a facility that is subject to anaggregate limit , that in 
absence of the project, the company would still be in compliance 
withtheaggregate limit.
•In the case where hydrocarbon gas wasvented before the project:
•that in absence of the project, the facility would still be in 
compliance with the overall objectives and the limits of the 
regulations and directives in their own province that are in force 
or that will come into force in 2023;
•combined flaring and venting volumes at the site do not exceed 
900 m3/day, calculated based on a three -month 
rolling average; or
•thefacility must demonstrate that conservation was not 
determined to be economic using the economic decision tree 
process under Directive 060in Alberta.•Pneumatic devices, 
including pneumatic 
controllers and 
pneumatic pumps
•Leak Detection And 
Repair (LDAR)
•Compressors
•Orphan wells
•Flaring or destroying 
hydrocarbon emissions 
that were vented 
before the projectSPECIFIC ELIGIBILITY AND INELIGIBILITY CRITERIA
Eligible Ineligible
Combined 
Heat and 
Power•Theproject involves at least one of the following actions:
1.switching from a higher CI fuel to a lower CI fuel for the production of 
thermal energy for a combined heat and power system;
2.the installation of a technology that does not combust fossil fuels for the 
production of thermal energy for a combined heat and power system;
3.the use of a fuel other than a fossil fuel.
•In addition, in the case of thermal energy and electricity not generated at the 
fossil fuel facility:
•the electricity is provided directly to the fossil fuel facility and not 
provided through the electrical distribution network ;
•the thermal energy is provided directly to the fossil fuel facility and not 
provided through a shared network that has more than one source of 
thermal energy.STREAMLINED ADDITIONALITY CRITERIA -
REGULATORY OVERLAP (1)
•Actions that are part of a project type that are legally required by other federal or provincial 
laws, regulations, by -laws or directives are not additional.
•Existing projects will no longer receive credits for the remaining duration of the crediting 
period due to regulatory overlap.
•The following project types are not considered to be legally required:
–A project type that overlaps with the compliance requirements or enables the creation of credits 
under federal, provincial or territorial carbon pollution pricing systems;
–A project type that overlaps with BC’s Low Carbon Fuel Standard.
•The proposed Regulations allow for credit creation opportunities, even if a given project 
generates credits in another program. However, different programs may decide not to 
provide credits for the same actions.
–For example, projects creating credits as of registration of the final Regulations will not be able to 
seek credits under the Federal Greenhouse Gas Offset System for the emission reduction / 
removals achieved by the sources, sinks or reservoirs included in the scope of the project .
–Stakeholders seeking clarify should contact the programs they are interested in to determine if CFS 
credit creation would make a project ineligible for that particular program.
15STREAMLINED ADDITIONALITY CRITERIA -
REGULATORY OVERLAP (2)
•Co-benefits –If an action is required by legislation, co -benefits would not be additional and 
therefore not credited
–For example, if a regulation came into place requiring an action to reduce SO2and this action also 
reduced GHGs, this action would not be eligible/credited under the CFS
•If not mandated by legislation, but the action is necessary in order to comply with the 
legislation, it is not additional and not credited. 
–If the action is not necessary in order to comply with the legislation, it is additional and may be 
credited.  In other words, in absence of the action (i.e. project), one is still in compliance with the 
legislation in question
•In the case where legislation is implemented in one P/T, but not another, regulatory overlap is 
based on the most stringent legislation. 
–If one P/T legislates an action, then no crediting in any P/T is allowed for this action. 
–Exception: if the most stringent legislation sets an application threshold and the facility 
demonstrates that the legislation would not apply to them due to not meeting the application 
threshold , then the action may be eligible for this facility
•Methane projects: Due to the complexities of the regulatory and legislative framework for 
methane across Canada, specific eligibility criteria for these projects is outlined on slide 8CREDITING
•10 yearsInitial Crediting 
Period
•One extension of 5 years (provided the QM 
still exists, eligibility criteria still met)Possible Extension 
•Owner or operator of a Fossil Fuel FacilityDefault Credit 
Creator
•LiquidClass of Credits 
Created APPLICATION AND APPROVAL PROCESS
•The application must include the information listed under 
Reporting Requirements
•In order for a project to be recognized it must meet the 
criteria in subsection 30(1) of the proposed Regulations 
and the following:
–The selected activities and associated CO2e emissions that 
would have occurred had the project not been implemented, 
including its boundaries, are appropriate;
–The boundary for the project is appropriate.PROJECT AND BASELINE SCENARIO -BOUNDARY
•The boundary on both the baseline and the project should be 
placed such that it is as small as possible but large enough 
that it still encompasses the project’s effect on GHG 
emissions in order to reduce the likelihood of leakage. 
–Leakage refers to the implementation of an activity or project which 
could impact emissions outside of the project boundary. 
•There may exist situations in which the boundary covers 
multiple facilities.
–For example, if the emissions shift from one facility to another.SELECTION OF THE BASELINE
•A description of activities, along with specific activity data, that would have occurred had the project not 
been implemented must be determined.
•In order to calculate emissions, activity data and emission factors are often used. 
–Activity data is the level of a specific action that produces emissions. 
•Examples include energy consumed, fuel produced or waste generated. 
•In order to establish the baseline, this activity data may be obtained through:
–historical activity data (based on a subset of existing components, process configurations and operating 
procedures within the facility prior to the implementation of the project);
–functionally equivalent alternatives (technologies or practices that provide products and/or services of a type 
and quality that are functionally equivalent to a project); 
–standard industry practice (the most common practice in Canada with respect to operational practices and/or 
facility components), which must be functionally equivalent to the project. The standard practice must be in 
compliance with any federal or provincial legislation and must meet any minimum standards or codes; or
–activity data in the project (ex. Electricity consumption in the project is the same as the baseline).YesOPTIONS FOR BASELINE ACTIVITY DATA
STARTHistorical
activity
data?Provide 
information on 
functionally 
equivalent 
alternatives or 
standard industry 
practice
Provide information 
and activity data (2 
years min, unless 
justification 
approved) on 
functionally 
equivalent 
alternatives or 
standard industry 
practiceProvide minimum of 
2 years of historical 
activity data, unless 
justification 
approvedActivity 
data from 
project?No
NoYesBASELINE FOR COMBINED HEAT AND POWER (1)
•For a combined heat and power system that combusts fossil fuels , the emissions from the 
baseline are based on the following formula:
𝐸×𝐶𝐼𝐸+𝑇×𝐶𝐼𝑇
where
•E–the electricity consumed by the fossil fuel facility in the project
•CIE–The smaller of:
–the carbon intensity of the electricity grid in the province or territory where the project occurs, as 
indicated in Table 37 of the Fuel LCA Model Methodology *; and
–40 g CO2e/MJ (144 g CO2e/kWh)
•T–the thermal energy consumed by the fossil fuel facility in the project
•CIT–One of the following:
–the carbon intensity of the thermal energy produced before the project; or
–in the case where no thermal energy was produced before the project, 85.6* g CO2e/MJ
*These carbon intensities may be updated periodically. The carbon intensities published in the 
version of the Fuel LCA Model Methodology for the compliance period in which credit creation is 
occurring must be used.BASELINE FOR COMBINED HEAT AND POWER (2)
•For a combined heat and power system that does not combust fossil fuels , the emissions 
from the baseline are based on the following formula:
𝐸×𝐶𝐼𝐸+𝑇×𝐶𝐼𝑇
where
•E–the electricity consumed by the fossil fuel facility in the project
•CIE–The smaller of:
–the carbon intensity of the electricity grid in the province or territory where the project occurs, as 
indicated in Table 37 of the Fuel LCA Model Methodology *; and
–96.0 g CO2e/MJ (345 g CO2e/kWh)
•T–the thermal energy consumed by the fossil fuel facility in the project
•CIT–One of the following:
–the carbon intensity of the thermal energy produced before the project; or
–in the case where no thermal energy was produced before the project, 85.6* g CO2e/MJ
*These carbon intensities may be updated periodically. The carbon intensities published in the 
version of the Fuel LCA Model Methodology for the compliance period in which credit creation is 
occurring must be used.EMISSION REDUCTION QUANTIFICATION
•Emission Reduction (tCO2e) = EmissionsBaseline –EmissionsProject
•Credits must be pro -rated for years where the units within the project were 
non-operational. This pro -rating will consider the calendar days of 
operation relative to non -operation.
•Emission Factors from the Fuel LCA model may be extracted for use in 
the generic QM. In the case where an emission factor is not available or 
the value in the model is not technically feasible, emission factors may be 
sought out from other reputable sources, listed in the QM .EMISSION REDUCTION QUANTIFICATION FOR 
ELECTRICITY OR THERMAL ENERGY TRANSFERRED
•Emissions from electricity or thermal energy transferred must be subtracted from the total 
project emissions
–𝐸𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 𝑃𝑟𝑜𝑗𝑒𝑐𝑡=𝐴𝑛𝑛𝑢𝑎𝑙𝑆𝑦𝑠𝑡𝑒𝑚𝐸𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 −𝐸𝑙𝑒𝑐𝑡𝑟𝑖𝑐𝑖𝑡𝑦 𝑇𝑟𝑎𝑛𝑠𝑓𝑒𝑟𝑟𝑒𝑑 ×𝐸𝑙𝑒𝑐𝑡𝑟𝑖𝑐𝑖𝑡𝑦 𝐶𝐼−
𝑇ℎ𝑒𝑟𝑚𝑎𝑙 𝐸𝑛𝑒𝑟𝑔𝑦𝑇𝑟𝑎𝑛𝑠𝑓𝑒𝑟𝑟𝑒𝑑 ×𝑇ℎ𝑒𝑟𝑚𝑎𝑙 𝐸𝑛𝑒𝑟𝑔𝑦𝐶𝐼
•In order to subtract emissions from electricity transferred, the emissions are calculated using 
the amount of electricity transferred multiplied by the smaller of:
–the carbon intensity of the electricity grid in the province/territory where the project occurs, as 
indicated in Table 37 of the Fuel LCA Model Methodology* ; or 
–40g CO2e/MJ (144 g CO2e/kWh).
•In order to subtract emissions from thermal energy transferred, the emissions are calculated 
using the amount of thermal energy transferred multiplied by a carbon intensity of 85.6 *g 
CO2e/MJ (308 g CO2e/kWh).
*These carbon intensities may be updated periodically. The carbon intensities published in the 
version of the Fuel LCA Model Methodology for the compliance period in which credit creation is 
occurring must be used.QUANTIFICATION METHOD FOR 
ENHANCED OIL RECOVERY WITH CO2
CAPTURE AND PERMANENT STORAGE 
Nov 25, 2021
Multi Stakeholder Consultative 
Committee (MSCC)CONTENT
•Introduction
•Terms and Definitions
•Applicability and Eligibility
•Hydrogen Production Facility
•Crediting
•Permanence
•Project Scenario
•Baseline Scenario
•Quantification MethodsINTRODUCTION
•Credits can be created under the proposed Regulations with this 
quantification method (QM) by capturing carbon dioxide (CO2), using it for 
Enhanced Oil Recovery (EOR) and permanently storing it.
•CO2is emitted in many processes at Fossil Fuel Facilities. This CO2may be 
captured for other uses, or vented directly to the atmosphere .
•Capturing CO2emissions and transferring them to permanent storage results 
in a reduction of anthropogenic CO2emissions in the atmosphere .TERMS AND DEFINITIONS
•CO2Capture: The capture, purification and compression of CO2at a facility where it would 
otherwise be directly released to the atmosphere.
•CO2Injection: An activity that places captured CO2into a long -term geological storage site.
•CO2Storage: The long -term isolation of carbon dioxide in subsurface geological formations 
(synonymous with permanent storage).
•CO2Transport System: Any mode of transport used to move captured CO2to the CO2
injection site.
•Fossil Fuel Facility: a facility that produces, processes, stores, transports or distributes 
finished fossil fuels that are in the liquid state at standard conditions or petroleum feedstocks
upstream of refining. 
•Injected Gas: The total quantity of CO2that is measured directly upstream of the injection 
wellhead. This quantity is from the project scenario and used to determine the baseline 
activity level .APPLICABILITY AND ELIGIBILITY
•To demonstrate that a CO2e emission reduction project meets the requirements under this QM, the participant must supply 
sufficient evidence that:
1. The project captures CO2directly from an emitting facility in Canada;
2. The project is injecting into an oil -producing geological formation capable of permanently storing CO2gases in Canada as 
defined by the relevant regulations in the province(s) or territory( ies) where it is located; 
3. The captured and injected CO2is from one or more of the following sources:
a) CO2captured at a Fossil Fuel Facility not associated with the production of low -CI fuels other than co -processed low -CI 
fuels;
b) CO2captured at a hydrogen production facility that supplies its hydrogen to a Fossil Fuel Facility, prorated based on the 
proportion of produced hydrogen supplied to the Fossil Fuel Facility;
4. The capture of CO2started on or after July 1, 2017;
5. The project must be in good standing with all operating permits and relevant regulations in the province(s) and /or territory( ies) 
where it is located; and
6. The project must not be required to lower the reservoir pressure at abandonment below the pressure at the end of production 
operations as a condition of its permits and/or regulatory requirements .
The Minister may not recognize projects for credit creation under the proposed Regulations in province(s) or territory( ies) 
if it can not be demonstrated that they have relevant regulations to ensure permanent storage .HYDROGEN PRODUCTION FACILITY
•Hydrogen production facilities are often integrated with Fossil Fuel Facilities 
and a unique approach is required.
•Unique to a hydrogen production facility, a portion of the captured CO2is 
eligible if the hydrogen is supplied to a Fossil Fuel Facility:
–This portion is determined by the proportion of produced hydrogen supplied to 
the Fossil Fuel Facility.CREDITING
•Crediting Period
–Eligible to create credits for a period of 10 years from the day on which the project is 
recognized by the Minister.
–Following 10 years , an extension period of 5 years is permitted as per section 29(3) of 
the proposed Regulations.
•Credit Creators
–The owner or operator of a facility that injects the CO2into the geological formation is the 
default credit creator.
–This person must register as a R egistered Creator before creating credits.
–The Registered Creator may differ from the default, if the owner or operator of the facility 
that injects the CO2into the geological formation enters into an agreement with another 
participant to create credits for the CO2emission reduction or removal project.PERMANENCE
•Reversals During the Crediting Period
–These reversals, both intentional and unintentional, must be quantified 
according to the QM.
–These reversals directly count against the amount of credits created each 
year.
•Reversals After the Crediting Period
–A discount rate of 2% is applied to the credits created by EOR projects.
–These credits are never returned to the Registered Creator.
–Projects that must reduce the pressure in the reservoir at the end of 
production operations are not eligible under the CFS.PROJECT SCENARIO
•The project scenario is the capture, compression, transport and injection of the CO2into a geological 
formation for permanent storage.
•Project Locations 
–A project consists of multiple interconnected locations. These may include:
•A facility where the generation of CO2that is captured by the project occurs;
•A facility where the CO2capture infrastructure, including compression/dehydration, is located (which may be at the same site as the 
CO2generation);
•A means of transporting CO2from the capture facility to the injection site(s);
•Compressor stations located along the CO2pipeline (where additional compression beyond what is provided at the capture facility is 
needed)
•The site(s) where CO2is injected into the geological formation .
•The site(s) where CO2is produced and processed for re -injected into the geological formation .
–Each project location must be uniquely identified (address, GPS coordinates, boundary file ).
•Project Aggregation
–Multiple CO2generation facilities, capture facilities, pipelines, and/or injection sites may be aggregated into a single 
project. BASELINE SCENARIO
•Baseline Identification and Selection
–The baseline scenario for this QMis the continued emission of CO2to the 
atmosphere that is captured and injected in the project .
–The baseline scenario does not include any amount of re -injected CO2.
–The baseline is dynamic and will be quantified annually, as the amount CO2
captured and injected will change during the project period.QUANTIFICATION METHODS
•The QM describes the following terms that must be quantified in the project and baseline scenarios. To determine 
the total emission reductions for the compliance period, the following equation must be used: 
•Project Scenario Sources: 
–Production and delivery of material inputs;
–Construction of EOR facilities and well drill and service;
–Off-site electricity generation;
–Off-site heat generation;
–On-site electricity generation;
–Fuel consumption ;
–Venting at injection and production wells and in recycle stream;
–Fugitives from injection, recycle, and production wells;
–Flare at injection, recycle, and production wells;
–Emissions from subsurface to atmosphere;
–Loss , disposal or recycling of material inputs.
•Baseline Scenario Sources: 
–Injected CO2.Emission Reduction (tCO2e) = EmissionsBaseline–EmissionsProject –Discounted Emission Reductions QUANTIFICATION METHOD FOR CO -
PROCESSING IN REFINERIES
Nov 25, 2021
Multi Stakeholder Consultative 
Committee (MSCC)CONTENT
•Definitions
•Introduction
•Applicability and Eligibility
•Crediting
•Project Boundary
•Baseline
•Co-Processing Benchmark Scenario
•Emissions Reduction Quantifications
–Low-CI Mass/Volume Quantification
–Carbon Intensity
•Additional points for consultationDEFINITIONS
•Co-processing is the substituting of a portion of a refinery's petroleum feedstock with a low -CI 
feedstock to create a co-processed fuel that has a low-CI fuel component and a petroleum 
fuelcomponent.
•The portion that requires quantification of the produced fuel mass and determination of the 
carbon intensity to create credits under the proposed Regulations is the low-CI fuel
component only .
Co-processing 
UnitPetroleum Feedstock
Low-CI FeedstockPetroleum Fuel
Low-CI Fuel*Co-processed Fuel
*Portion potentially eligible for credit 
under the proposed RegulationsINTRODUCTION
•The QM provides the requirements for creating credits under the proposed
Regulations from co-processing low-CI feedstocks withpetroleum feedstocks 
at a refinery , including :
–Eligible project types;
–Calculation methods for determining the quantity and carbon intensity of the low-CI fuel 
produced ; 
–Monitoring and reporting requirements for annual credit creation .APPLICABILITY AND ELIGIBILITY
•Eligible projects include co -processing in a hydrotreater and in a FCC, at a 
refinery.
•Co-processed low -CI fuels are subject to the land use and biodiversity criteria 
and must be used or sold for use, in Canada whether as neat fuel or as part 
of a blend.
•Co-processed low-CI propane that is supplied to a vehicle fuelling station is 
eligible for producing liquid credits. This is the same treatment as renewable 
propane under Compliance Category 3 (CC3).
•Fuels exported are not eligible for creating credits under the proposed 
Regulations, however, in the case of multiple low -CI feedstocks being 
simultaneously processed, the carbon intensity of fuels can be assigned to 
specific batches, including for exported fuel.CO-PROCESSING UNDER THE PROPOSED 
REGULATIONS
•Co-processing is a Compliance Category 1 (CC1) activity -actions throughout the lifecycle of 
a fossil fuel that reduce its carbon intensity through CO2e emission reduction projects, but 
shares some similarities with Compliance Category 2 (CC2) -supplying low-CI fuels.
Activities similar to CC2Registration
Registration 
ReportIdentification of Operating Scenarios
Baseline 
(min. 12 
months)Co-processing 
Benchmark Scenario (min. 
3 months)
Maximum 
Feedrate Mode 
(min. 1 month, 
must cover each 
operating mode)Applications
New 
Pathway 
Application 
under 
s.67(2)Application 
for 
Approval 
of Carbon 
IntensityCO2e 
Emissions 
Reduction 
or Removal 
Project 
ApplicationCredit Creation
Credit 
Creation 
Report 
(Annual)CI Re -
determination 
(Bi-annual CI 
Application)CREDITING
•Crediting Period
–There is no end to the crediting period, similar to a CC2 option under the proposed Regulations.
–This project type will be considered additional as long as other low-CI fuels are eligible for credit creation under 
the proposed Regulations.
•Credit Creators
–Theperson that produces in Canada a volume of liquid co -processed low-CI fuel during a compliance period is 
the default credit creator.
–This person must register as a Registered Creator before creating credits.
–The Registered Creator may differ from the default, if the owner or operator of the facility that produces low-CI 
fuel in Canada through co -processing enters into an agreement with another participant to create credits for the 
CO2 emission reduction or removal project.
•Credit Class
–Liquid class credits are created for the production of co-processed low -CI fuels that are liquid at standard 
conditions.
–Gaseous class credits are created for the production of co-processed low-CI propane.
–Liquid class credits are created for the production of co-processed low-CI propane that is supplied to a fuelling
station (supporting documents are required).GENERAL APPROACH
•Credit creation is based on the same approach as CC2.
•Credits for co -processed low -CI fuels are created based on the amount of low -CI 
fuelsupplied to the Canadian market annually (in MJ), and the difference between the 
lifecycle carbon intensity of the low-CI fuel and the reference carbon intensity value for the 
fuel.
•Credits are only created when:
–The operation of the refinery is within the bounds identified by the applicant in the carbon 
intensity application during co -processing ;
–The mass -balance error for the co -processing project is demonstrated to be within 3%.
•All fuels produced from biogenic feedstocks need to be validated through carbon -14testing, 
with a requirement for the testing of each batch starting in 2025.
•Credits will be subject to verification as per the proposed Regulations .LIQUID CLASS CREDITS
CIReference CIis the liquid class reference carbon intensity for the compliance period as set out in 
item 1 of Schedule 1 of the proposed Regulations (g CO2e/MJ )
CIijis the carbon intensity of a liquid low -CI fuel, i, for an operating mode j, as determined using 
the QM and the Fuel LCA Model (g CO2e/MJ)
Qijis, subject to subsection 32(1) of the proposed Regulations (land -use and biodiversity 
criteria), the quantity of that low-CI fuel, i, for an operating mode j, produced in Canada by the 
person during the period for use as a fuel in Canada (m3)
D is the energy density of that low -CI fuel, as set out in Schedule 2 of the proposed Regulations 
or as applied for in the New Pathway Application under s.67(2) using the Specifications for Fuel 
LCA Model CI Calculations (MJ/m3)𝑬𝒎𝒊𝒔𝒔𝒊𝒐𝒏𝒔 𝑹𝒆𝒅𝒖𝒄𝒕𝒊𝒐𝒏𝒔 𝒕𝑪𝑶𝟐𝒆=𝑪𝑰𝑹𝒆𝒇𝒆𝒓𝒆𝒏𝒄𝒆 𝑪𝑰−𝑪𝑰𝒊𝒋×𝑸𝒊𝒋×𝑫𝒊×𝟏𝟎−𝟔CO-PROCESSED LOW -CARBON -INTENSITY PROPANE 
–GASEOUS CLASS CREDITS
CIdiffis the difference between the reference carbon intensity of renewable propane, as set out 
in item 3 of Schedule 1 and the carbon intensity of the co -processed low-CI propane, as 
determined using the QM and the Fuel LCA Model (g CO2e/MJ)
Qis, subject to subsection 32(1 ) of the proposed Regulations, the quantity of that co-processed 
low-CI propane that was produced in Canada during the period for use as a fuel in Canada, 
excluding co-processed low-CI propane for which liquid class credits were created ( m3)
Dis the energy density of renewable propane as set out in Schedule 2 ( 25,310 MJ/m3)𝑬𝒎𝒊𝒔𝒔𝒊𝒐𝒏𝒔 𝑹𝒆𝒅𝒖𝒄𝒕𝒊𝒐𝒏𝒔 (𝒕𝑪𝑶𝟐𝒆)=𝑪𝑰𝒅𝒊𝒇𝒇×(𝑸×𝑫)×𝟏𝟎−𝟔CO-PROCESSED LOW -CARBON -INTENSITY PROPANE 
–LIQUID CLASS CREDITS
CIdiffis the difference between the reference carbon intensity of renewable propane, as set out 
in item 3 of Schedule 1 and the carbon intensity of the co -processed low-CI propane, as 
determined using the QM and the Fuel LCA Model (g CO2e/MJ)
Qis, subject to subsection 32(1 ) of the proposed Regulations, thequantity of that co-processed 
low-CIpropane supplied to the fuelling station, as indicated in the supporting documents 
referred to in subsection 86(2) of the proposed Regulations (m3)
•The supporting documents must establish that the co-processed low-CIpropane was 
supplied to a fuelling station and indicate the volume of fuel supplied during the compliance 
period and the owner or operator of the fuelling station at which the fuel was supplied.
Dis the energy density of renewable propane as set out in Schedule 2 ( 25,310 MJ/m3)𝑬𝒎𝒊𝒔𝒔𝒊𝒐𝒏𝒔 𝑹𝒆𝒅𝒖𝒄𝒕𝒊𝒐𝒏𝒔 (𝒕𝑪𝑶𝟐𝒆)=𝑪𝑰𝒅𝒊𝒇𝒇×(𝑸×𝑫)×𝟏𝟎−𝟔PROJECT BOUNDARY
•The boundary of the co -processing project includes all units downstream of the co -
processing feed unit that undertake any additional processing of the low -CI fuel including 
blending of the fuel to a finished product, but excluding:
–Any hydrogen production units ;
–The blending of ethanol or biodiesel with the co -processed fuel.
•A separate QM will be developed for low -CI hydrogen integration at fossil fuel facilities.
•Where different co -processing activities take place in separate units at a facility, a different 
project is designated for each co -processing feed unit.
–A refiner with a Hydrotreater undertaking co -processing and a FCC undertaking co-processing will 
have two co-processing projects at their facility .BASELINE
•The QM uses a static baseline which means the reference baseline is considered to be same 
over a period of 24 months until the next CI Re -Determination, unless the refiner changes 
the baseline. 
•The initial baseline is a 12 -month period of data as collected under the ‘petroleum -only’ 
refinery operation.
•The baseline must identify relevant operating modes which encompass a set of operational 
parameters that change a co -processing unit’s energy usage, process CO2e emissions or 
product yields, as per the thresholds in the QM.
–Examples of operating modes for a co -processing FCC ERRP could include a summer diesel mode 
and a winter diesel mode. 
•Changes to the baseline will require a new Application for Approval of Carbon Intensity and a 
New Pathway Application.CO-PROCESSING BENCHMARK SCENARIO
•The co -processing benchmark scenario describes the operating conditions for the refinery 
which are established during co -processing operation.
•The benchmark scenario has the following requirements:
–A benchmark scenario applies to one distinct low -CI feedstock being processed (multiple 
feedstocks will require multiple benchmark scenarios);
–It must cover all operating modes that the refinery will undertake during the compliance period ; 
–It is valid for operation up to a maximum low -CI feedstock feedrate .
•Changes to the benchmark scenario (new feedstock, new maximum low -CI feedstock 
feedrate) will require a new Application for Approval of Carbon Intensity and may require a 
New Pathway application .CALCULATION METHODS FOR LOW -CI MASS/VOLUME 
QUANTIFICATION
•Multiple calculation methods for the quantification of the low -CI fuel produced are available, depending 
on the project and feedstock type.
•Requests for an adjusted calculation method can be made through the New Pathway Application.
Co-processing ERRP Calculation Methodology Feedstock Types
HydrotreaterMass Balance based on Observed Yields Non-Biogenic
Carbon Mass Balance Non-biogenic
Total Mass Balance Non-Biogenic
Mass Balance with Carbon -14 Testing Biogenic
Carbon -14 Testing of Produced Batches Biogenic 
FCCMass Balance based on Observed Yields Non-biogenic
Carbon Mass Balance Non-biogenic
Total Mass Balance Non-biogenic
Mass Balance with Carbon -14 Testing Biogenic 
Carbon -14 Testing of Produced Batches Biogenic CARBON INTENSITY
•Carbon intensity of co -processed low -CI fuels will be based on the incremental allocation method and 
require the creation of a new pathway in the Fuel LCA model.
•One carbon intensity is valid for:
–One distinct feedstock (i.e. Canola from Alberta) or one feedstock type (i.e. canola oil vs used 
cooking oil) if distinct feedstocks are aggregated within one feedstock type;
–A maximum feedrate for the distinct feedstock or feedstock type (i.e. up to 10,000 BPD of canola);
–One low-CI fuel produced (i.e. co -processed low -CI diesel); 
–One operating mode that applies (i.e. low -cloud diesel).
•The carbon intensity will be determined using the Fuel LCA Model:
–The Specifications for Fuel LCA Model CI Calculations will apply to co -processed low -CI fuels.
–Additional guidance for the carbon intensity calculations for a new diesel hydrotreater or new FCC 
pathway in the Fuel LCA model are being developed and are expected to be available Winter 
2022 .ADDITIONAL POINTS FOR CONSULTATION
•In the draft QM, we are also asking for feedback on importing activities 
(through Appendix 2).
–Imported co -processed low -CI fuels will be eligible through a mechanism to have 
international projects recognized.
•Additional information is required for co-processing in upgraders and co -
processing of renewable naphtha (Appendix 1) to determine if these activities 
could be included in a future version of the Co -processing QM:
–A description of the commercial activities that are being undertaken or are planned to be 
undertaken; 
–Information on the quantification of low -CI fuel produced and the calculation methods for 
determining the fuel carbon intensity.