CFR credits are a critical tool to help ease the transition to a zero-emission fleet. 3Degrees shares tips and expertise on the program

In 2023, Canada launched its Clean Fuel Regulations (CFR) program targeting the transportation sector — the country’s second-largest source of greenhouse gas emissions. This initiative mirrors successful programs in British Columbia, California, Oregon and Washington State that aim to slash fuel carbon intensity and spark a shift towards cleaner transportation technologies.

Other jurisdictions with active clean fuels programs have benefited greatly from the adoption of clean vehicle technology and the reduction in emissions. Now, it’s Canada’s turn to start reaping the positive outcomes of its program.

This guide unpacks the critical elements of the CFR, spotlighting its potential to curb emissions and champion zero-emission vehicle adoption.

What are the Canadian Clean Fuel Regulations?

Canada’s CFR program launched in July 2023. It marks a significant step in the country’s effort to combat climate change.

Targeting fuel suppliers, these regulations aim to lower transportation fuels’ carbon intensity (CI) and promote a shift towards cleaner alternatives. The CFR’s goal is to achieve a 15 per cent reduction in the CI of gasoline and diesel by 2030, which is expected to eliminate 26 million tonnes of greenhouse gas emissions.

To do this, the CFR sets CI benchmarks for gasoline and diesel, requiring fuel producers and importers to lower the CI of their products incrementally. Suppliers exceeding these carbon limits must acquire compliance credits being sold on the open market. Credits can be generated by those supplying or using low carbon fuels including electricity, renewable natural gas (RNG) or green hydrogen.

This market mechanism encourages the reduction of high-CI fuels while supporting the adoption and expansion of cleaner energy sources.

The revenue generated from the sale of compliance credits is crucial in furthering Canada’s decarbonization efforts.

Who are eligible credit creators under the Canadian CFR?

Entities that can generate credits are categorized into three main buckets:

1. Fossil fuel producers that reduce emissions in the fuel production process;
2. Producers/importers of low-CI fuels, like ethanol or biodiesel; and
3. Suppliers of low-CI fuels directly to vehicles, promoting the adoption of EVs, green hydrogen fuel cell vehicles and renewable natural gas vehicles. (This includes credits for both light-duty and heavy-duty vehicles, including off-road vehicles, where alternative fuels replace fossil fuels.)

There are three main classifications for registered creators under this third compliance category:

1. EV charging network operators managing public or residential metered EV charging;
2. Charging site hosts who lease or own and install chargers for their fleets; and
3. Operators of clean alternative fueling stations, such as green hydrogen or RNG.

Projects must meet Environment & Climate Change Canada’s (ECCC) CFR’s eligibility and reporting requirements and pass independent third-party verification before they can generate credits. 

Unlocking value with the Canadian CFR

The Canadian CFR is designed to boost clean technology jobs, enhance EV adoption and grow the clean fuel sector by encouraging the use of low-carbon technologies. It offers significant revenue opportunities for fleets adopting renewable fuels like RNG, green hydrogen, or electricity, aiding fleet decarbonization and advancing GHG reduction goals.

3Degrees offers an effective path to harness the Canadian CFR’s advantages, easing regulatory and administrative burdens. With expertise in aiding fleet operators, EV infrastructure, and hydrogen and RNG fuel providers, it ensures clients maximize revenue.

The CFR program’s benefits extend to reducing ownership costs and increasing revenue for fleets transitioning to lower emissions. The value gained varies based on vehicle type, usage, refueling location, and provincial carbon intensity, influencing the credits earned and overall financial advantage.

3Degrees’ service encompasses a full-suite solution for Canadian CFR participation, covering fuel supply equipment (FSE) registration, data collection and integrity, credit creation and sale, and comprehensive reporting to the ECCC, facilitating a seamless experience.

We leverage a dedicated market research team to monitor CFR and relevant markets for regulatory changes, trends and opportunities and increase client value through expert analysis and proprietary models. This insights-driven approach means clients benefit from strategic market recommendations.

With our expert team focused on renewable energy and climate solutions communication, now is the perfect time to dive into the CFR program. Offering free evaluations, 3Degrees clarifies the program and spotlights your eligibility for credit generation. Ready to uncover your CFR opportunities? Reach out to 3Degrees.

About 3Degrees

3Degrees is a leading global climate solutions provider, pioneer of environmental markets, and Certified B Corporation. We help develop and deploy impactful climate solutions that make good business sense and advance an equitable transition to a low-carbon future. Learn more at 3Degrees.com or follow us on LinkedIn.

John Somers is Sr. Development Manager of Transportation Markets at 3Degrees where he works with fleet operators, EV charging infrastructure providers and Hydrogen & RNG suppliers to quantify and monetize their transportation-related emissions reductions from road, rail and marine operations in order to take full advantage of the LCFS and clean fuels programs.