Rethinking Energy Conservation in Ontario – Results:Transportation Fuels Standards
| In November, 2010, the ECO released volume 2 of its Annual Report on the progress of activities in Ontario to reduce or make more efficient use of electricity, natural gas, propane, oil and transportation fuels. Click here for more information on this report, including videos and communications materials. | |||||
|
|||||
As shown in our Annual Energy Conservation Progress Report – 2009 (Volume One), transportation fuels represent the greatest energy demand by fuel type for the province, and it is therefore important that the government focuses on this area.
A number of actions have been taken to develop a broader climate change initiative that directly relates to transportation fuels. At the provincial level, Ontario introduced a renewable fuel standard and signed a memorandum of understanding (MOU) with California to establish a low carbon fuel standard (LCFS). At the federal level, the Canadian government announced a renewable fuel standard, which includes proposed renewable content requirements for diesel and heating oil.
Contents |
Low Carbon Fuel Standard
The Ontario government signed an agreement with California in May 2007 to co-ordinate policy development on an LCFS that would require a 10 per cent reduction in carbon emissions from transportation fuels by 2020. Such a standard is meant to reduce overall carbon emissions by considering not only tailpipe emissions, but also carbon emissions during the production and distribution of the fuel. In theory, an LCFS will reduce the net amount of carbon used per unit of fuel energy.
Ethanol in Gasoline
Ethanol increases the amount of oxygen present during the combustion process. As a result, its addition increases the combustion efficiency of gasoline and, therefore, reduces carbon monoxide emissions.
In October 2005, the Ontario government passed O. Reg. 535/05 under the Environmental Protection Act, requiring an average of five per cent ethanol in gasoline sold in the province beginning January 1, 2007. The regulation includes an additional incentive for cellulosic ethanol, which is derived from cellulose in the non-edible parts of plants, such as stalks, forestry materials, and agricultural residue, as well as through fast growing grasses. Cellulosic ethanol is chemically the same as ethanol produced from cornstarch and sugarcane, commonly known as starch- and sugar-based ethanol, respectively. However, the production process is different. The incentive works by treating each litre of cellulosic ethanol as being equivalent to 2.5 litres of conventional ethanol.
On September 1, 2010, the federal government announced that its renewable fuels strategy will take effect December 15, 2010 and will require five per cent ethanol in gasoline nationwide.
Federal Targets for Biodiesel and Heating Oil
When the federal government made its September 1, 2010 announcement for five per cent ethanol in gasoline, it included a statement regarding its intention to regulate a two per cent renewable content requirement in diesel fuel and heating oil by 2011. The federal government has been supporting the production of both ethanol and biodiesel through its ecoEnergy for Biofuels Program since 2008. Through this, Ottawa will invest up to $1.5 billion over nine years towards the production of biofuels. The renewable fuel content requirements, as proposed for diesel fuel and heating oil, are subject to the successful demonstration of technological feasibility under a range of Canadian conditions.
Results
Low Carbon Fuel Standard
As of October 2010, Ontario has held consultations with industry but has not established an LCFS.
Ethanol in Gasoline
Ontario has achieved its five per cent ethanol in gasoline target. With the implementation of O. Reg. 535/05, Ontario legally requires five per cent ethanol content in gasoline by volume, ensuring that the province’s gasoline will contain fuel from this renewable energy source. Furthermore, the September 1, 2010 announcement made by the federal government aligns the federal and provincial ethanol in gasoline requirements.
Issues and ECO Comment
Low Carbon Fuel Standard
As the ECO noted in our Annual Energy Conservation Progress Report – 2009 (Volume One), since signing the MOU, California has moved ahead with legislating its LCFS through regulations that require emissions reductions beginning in 2011. Conversely, Ontario has not yet taken comparable action.
The Ontario government appears to be relying on the development of a cap-and-trade system through the Western Climate Initiative (WCI), which would lead to the use of less carbon-intensive fuels to fulfill its commitment of establishing an LCFS. However, the currently proposed WCI cap-and-trade system would not begin to capture emissions from transportation fuels until January 2015, eight years after Ontario signed the MOU with California.
The ECO plans to examine future details of an LCFS as they become available, and encourages the Ministry of Energy to take timely and appropriate action in developing a policy that is suitable for Ontario.
Ethanol in Gasoline
If cellulosic ethanol production increases, and it supplies most of the ethanol blended into Ontario’s gasoline, due to the current cellulosic incentive as written in the regulation, there may be less than five per cent ethanol in Ontario’s gasoline. This is not an immediate concern. As time goes on, the commercialization potential is growing and cellulosic ethanol will become more available.
To ensure that Ontario makes progress in reducing or making more efficient use of transportation fuels, the ECO will continue to monitor these policies and will report as necessary in future years.
