10 December 2009

The Government of Canada released draft regulations to limit greenhouse gas (GHG) emissions from new vehicles beginning with the 2011 model year. Progressively tighter regulatory requirements would become effective through the 2016 model year. The proposal is aligned with the GHG program proposed by the United States.

The draft regulations would establish a regulatory program for reducing GHG emissions:

  • Vehicle manufacturers would be required to comply with “unique” fleet average GHG emission standards for passenger automobiles and light trucks for each model year.
  • A company’s “unique” fleet average standard would be determined based on the size (“footprint”) and the number of vehicles it sells in a given model year.
  • The fleet average GHG emission standards would become progressively more stringent with each new model year from 2011-2016.
  • The GHG emission standards would put Canadian requirements at par with US national standards and, by 2016 with the California standards.
  • It is anticipated that the average GHG emission performance of the 2016 Canadian fleet of new cars and light trucks would match the average level of 155 g CO2/km (250 g CO2/mile) that has been projected for the US, which would represent an approximate 20% reduction compared to the new vehicle fleet that was sold in Canada in 2007.
  • The regulations would also establish separate limits for other tailpipe GHG emissions such as nitrous oxide (N2O) and methane (CH4)

Flexibility in meeting the regulations would be provided through a system of emission credits. Credits would be granted for companies doing better than the applicable fleet average standard for a given model year. Deficits would be incurred for not achieving the applicable fleet average standard in a given model year. Companies would be also able to generate GHG emission credits for the 2008-2010 period if their average GHG performance exceeds specified emission levels that are based on US regulatory requirements. Emission credits could be traded between companies.

The proposed regulations recognize vehicle design improvements which reduce GHG emissions through approaches other than directly reducing tailpipe CO2 emissions, such as technologies that improve the efficiency of air conditioning systems, reduce refrigerant leakage, or—in general—reduce GHG emissions under conditions that are not captured by conventional emission testing procedures. The beneficial effects of such technologies would be accounted for by subtracting their GHG-reducing impacts from the average CO2 tailpipe emissions of a company’s fleet.

The proposal also provides an incentive for companies to market “advanced technology vehicles”, including electric vehicles, plug-in hybrid electric vehicles and fuel cells vehicles. Through to the 2016 model year, a company would be credited with selling two times the number of advanced technology vehicles than it actually sold in the calculation of its fleet average GHG emission performance.

Transportation accounts for 27% of Canada’s total GHG emissions. Cars and light trucks account for 12% of Canada’s total GHG emissions.

The GHG emission regulations are being developed under the authority of the Canadian Environmental Protection Act, 1999 (CEPA). The release of the draft regulations will allow for early consultations with provinces, territories and stakeholders. Following these consultations, proposed regulations are expected to be published in the Canada Gazette for a 60-day formal public comment period.

Source: Environment Canada