Newsletter April 2024

The advantages of propane and renewable propane were discussed at the Smart Energy Conference in Halifax on April 15 and 16. 

In the session,  Energy Transition – Hybrid Solutions, CPA Sr. VP Government Relations Allan Murphy joined panellists from the electricity and natural gas industries. The central theme revolved around the urgency of transitioning from fossil fuel dependence to achieving net-zero economies by 2030 to 2050. Murphy highlighted the importance of hybrid solutions, emphasizing that propane and renewable propane will play vital roles in this transition. 

Murphy also presented the case for propane and renewable propane in a session on clean fuels advancement. He outlined the CPA roadmap to renewable propane, stressing the necessity for government support, including incentives and streamlining regulatory processes to facilitate the entry of renewable propane into commercial markets. 

While renewable propane is currently being produced in Canada, it is not directly marketed; instead, it is utilized to reduce carbon emissions from renewable diesel refineries that produce it as a by-product. 

Streamlining regulatory changes and offering incentives could set the stage to commercialize renewable propane in Canada. Murphy noted that renewable propane is available commercially in Europe and the United States. 

With the next federal election less than 18 months away, the CPA has been closely monitoring developments of Canada’s major political parties as they discuss issues that may find their way into platform documents and featured in the upcoming campaign. 

From April 10 to April 12, CPA Sr. VP Allan Murphy and Ontario VP Chris Crawford participated in the Canada Strong and Free Conference, formally known as the Manning Conference. Among the issues discussed, there was a focus on advancing technology to reduce the growth of carbon rather than relying on carbon taxes. 

Conservative leader Pierre Poilievre repeated his commitment to eliminate the carbon tax and emphasized the need for technological solutions to reduce emissions. His plan centers around making life more affordable for Canadians. New Brunswick Premier Blaine Higgs spoke about the opportunities to help other countries reduce emissions by exporting LNG, noting his province’s abundant natural gas supply. Alberta Premier Smith spoke about her opposition to the carbon tax and called it a “sin tax on productivity.” She highlighted the need to allow for alternative solutions to reduce emissions.  

The CPA will continue to hold discussions with political parties, including possibly a federal lobby day in the fall. 

The CPA has joined forces with the Hearth, Patio, and Barbeque Association (HPBAC) to address pressing challenges facing the industry, particularly concerning the potential prohibition of natural gas and gas appliances, including propane, in certain Canadian jurisdictions. 

Representing the CPA, Board Chair Cameron Stewart participated in an HPBAC meeting in October, during which it was decided that a white paper outlining these challenges needed to be developed. On April 8, CPA Sr. VP Government Relations Allan Murphy participated in the review of this white paper that highlighted the need for governments to better understand that existing gas infrastructure is needed to support the transition to cleaner energy and that includes gas/propane heating appliances. 

HPBAC is actively looking at directly lobbying governments to ensure that perspective is understood. Murphy offered the CPA’s full support. The Canadian Gas Association and Fortis BC also support the efforts of the HPBAC.

BC Hydro announced its first call in 15 years for private-power producers to supply the province’s grid with enough electricity to power the equivalent of 270,000 homes by 2031 at a cost of up to $3.6 billion. 

According to Minister of Energy Josie Osborne, BC Hydro’s latest integrated resource plan indicates that demand to power the province’s CleanBC ambitions for electrifying the province’s vehicle fleet, home heating and industry activities will start to outstrip Site C’s supply before the end of the decade.  

Proposals will be expected to align with CleanBC’s definition of renewable power (mostly wind and solar more than run-of-river hydro) and require a minimum of 25 per cent equity ownership by First Nations whose territories host the facilities. 

The call comes at a time when BC Hydro is preparing for the impact of successive droughts. In 2023, the utility imported about 20 per cent of the electricity it requires due to these conditions. The CPA will continue to work with the provincial government to encourage the use of propane (and possible advance of renewable propane) both as primary and back up sources for energy, as the electricity grid struggles to keep up with increasing demand.

Deputy Premier and long-time Finance Minister Donna Harpauer tabled her last budget before Saskatchewanians return to the polls and she retires from elected politics this fall. Harpauer was first elected in 1999 and has served as finance minister since 2017 under both Premiers Brad Wall and Scott Moe. Her final budget, titled “Classrooms, Care & Communities,” charts the course for Moe’s Saskatchewan party seeking its fifth consecutive election victory in the upcoming election.  

Budget highlights relevant to CPA members include: 

• The government keeping its current one per cent small business tax rate until July 2025 (the tax had been scheduled to return to two per cent in July).  
• No new taxes or tax increases on Saskatchewan residents.

The CPA will continue to work with key stakeholders across Saskatchewan to ensure that the importance of propane is well understood ahead of the fall election and provide solutions for affordability measures targeting the propane sector and its customers. For any questions, please reach out to Katie Kachur, VP Government Relations West. 

On June 6, the CPA will host a special event at the DoubleTree Hotel in Regina for all Saskatchewan-based CPA members. The event will feature speakers from various levels of government and is intended to raise the profile of propane. It ensures that decision-makers are well-informed about the pivotal role of propane, particularly as the people of Saskatchewan head to the polls in October 2024. If you or any representative from your company is interested in joining this exciting event, please reach out Katie Kachur, VP Government Relations, West. Spots are limited.  

In March, the CPA met with Ontario NDP Energy Critic, MPP Peter Tabuns to discuss the industry’s roadmap to produce renewable propane in Canada. Chris Crawford, Government Relations VP, Ontario and Manitoba and Katie Kachur, Government Relations VP, Western Canada explained the findings of the report to Tabuns, who appreciated hearing how Canada’s propane industry has a roadmap for the future.

ECCC’s Low Carbon Fuels Division will be holding an outreach session on the Clean Fuel Regulations (the Regulations) on May 9, 2024, from 1:00 – 3:00 pm ET.  See Webex meeting details below.

During this session, the Low Carbon Fuels Division will be providing information on the following topics:

• The new version of the Fuel Life Cycle Assessment (LCA) Model and other related documents that will be published in June 2024.
• The requirement to submit new CI applications after July 1, 2024, using the new version of the Fuel LCA Model, including a verification report.
• Clarification for new pathway applications.
• Summary on credit adjustments.

IMPORTANT NOTES

A new version of the Fuel LCA Model will be published in June 2024. All CI applications submitted on or after June 30, 2024, must be verified by an accredited verification body.

Please note that CI applications that were submitted before July 1, 2024, for CI values determined using input data for a period of 24 consecutive months (Final CI), and that do not get approved by July 1, 2024, will not be approved, given the new version of the Fuel LCA Model will then be available. 

These applicants will be required to submit a new CI application using the new version of the Fuel LCA Model.

Due to the large number of CFR CI applications currently being reviewed by ECCC, applicants that are considering submitting a CI application in the next two months are encouraged to wait until after July 1, 2024, to submit a CI application using the new version of the Fuel LCA Model.

ADDITIONAL INFORMATION

The Regulations allow registered creators to adjust the number of compliance credits created following updates to the CIs used for credit creation. Please consult the factsheet on the Clean Fuel Regulations Google Drive:

• 4 – Credit Creation – Google Drive: Factsheet on Credit Adjustments Based on Carbon Intensities.

All final CIs approved by ECCC before July 1, 2024 (determined using a version of the Fuel LCA Model published before June 2024), cease to be valid on December 31, 2025, as per subsection 86(9) of the Regulations. All registered creators, CI contributors or foreign suppliers requiring a CI must submit a new CI application after July 1, 2024, using the new version of the Fuel LCA Model. The CI application must be verified by an accredited verification body in accordance with section 130 of the Regulations. The approval of the new CI is required to request a credit adjustment based on CIs.

The earliest date possible for a credit adjustment based on CIs would be in the annual credit-creation report or the credit-adjustment report submitted in 2025 (in respect of the 2024 compliance period).

It is strongly recommended to submit a verified application for approval of a final CI, using the new version of the Fuel LCA Model, as early as possible after July 1, 2024, to allow for adequate time for approval.

After July 1, 2024, approved new pathways may continue to be used until the new elements (e.g. a new feedstock such as rye) get added to the Fuel LCA Model. ECCC will advise applicants on a case-by-case basis if the changes to the Fuel LCA Model necessitate updates to specific new pathways.

Meeting WebEX Details

• Link: https://canada.webex.com/canada/j.php?MTID=mfafbfa5ac673c3c0de1aae58eef17976
• Or join: https://canada.webex.com/
  • Meeting number: 2770 069 1452
  • Password: XDhPR6772e@

For feedback and questions related to the Regulations and supporting documents, please contact the Low Carbon Fuels Division at cfsncp@ec.gc.ca.