Canada proposes changes to support the low-carbon fuel industry

OTTAWA, ON, Oct. 27, 2026 /CNW/ -- The Government of Canada is helping strengthen Canada's low-carbon fuel industry by proposing changes to the Clean Fuel Regulations. This will support domestic production and encourage long-term reductions in greenhouse gas emissions. These amendments are part of the Government's broader efforts to build Canada strong by strengthening economic resilience, supporting Canadian workers and businesses, and ensuring Canada remains competitive in the face of rapid change.

The proposed amendments will be published in the Canada Gazette, Part I, on October 30, 2026, followed by a 75-day public consultation period. By creating the conditions for long-term investment and growth, together these proposed amendments would:

• Close the competitiveness gap facing Canadian low-carbon fuel producers so they can compete fairly in the domestic low-carbon fuel market.
• Create conditions for more investment in clean technology projects in the fuels sector, like carbon capture and storage at low-carbon fuel (for example, ethanol) facilities and co-processing bio-based feedstocks, like canola oil, along with crude oil at refineries.
• Make it easier and cheaper for companies to comply with the Regulations and supply fuels to Canadians and businesses that lower emissions gradually and reliably.

The Clean Fuel Regulations encourage companies to invest in cleaner technologies and reduce emissions throughout the fuel supply chain. Since the Regulations came into effect, the credit market has grown to more than $3 billion, supporting investment in low-carbon fuels, agriculture, forestry, and clean technology. The value of the Clean Fuel Regulations credit market is reflected in the investments, jobs, facilities, feedstock demand, and domestic production capacity that those credits help create and sustain across Canada.

These proposed amendments support the Government's goal of building a stronger, more competitive, and more resilient Canadian economy while continuing to reduce emissions. The Government of Canada is laying the foundations for a more prosperous Canada.

Quotes

"Our government designed these proposed amendments to support Canada's low-carbon fuel sector and ensure resilient long-term emissions reductions while building the decarbonized industries of the future. We look forward to continuing to work with industry, provinces and territories, Indigenous partners, and other stakeholders as we advance these measures to support a strong, competitive, low-carbon fuel sector and Canada's clean economy."

– The Honourable Julie Dabrusin, Minister of the Environment, Climate Change and Nature

Quick facts

• A strong Canadian low-carbon fuel industry is critical to maintaining a reliable supply of low-carbon fuels and achieving sustained greenhouse gas reductions over time from the almost 200 million litres of gasoline and diesel consumed per day.
• Canada's Biofuels Production Incentive program complements the proposed amendments and is open for intake until December 2027.
  • The program provides up to $372 million in production-based support for domestic biodiesel and renewable diesel producers, helping sustain domestic production capacity, strengthen Canadian value chains, and support jobs across the sector.
• To date, the Clean Fuel Regulations have driven billions of dollars in investments in clean technologies and low carbon fuel production, supporting and growing sustainable jobs for Canadians. This includes:
  • Co-processing projects at six refineries across Canada and allowing renewable feedstocks, like crop-based oils and other biogenic materials, to be refined along with crude oil.
  • Ongoing operations and expansion of several Canadian liquid low-carbon fuel producers, as well as the construction of new facilities, and new canola crush plants to provide feedstocks for these facilities.
  • Diversification of our low-carbon fuel supply, with investments in new hydrogen and renewable natural gas facilities.
• The Clean Fuel Regulations have generated more than $185 million in credits for residential and public electric vehicle charging. By creating compliance options that direct Clean Fuel Regulations credit revenue into charging infrastructure, it supports electric vehicle adoption through lower charging costs and more charging stations for Canadians while also reducing emissions.

Associated links

• Proposed Amendments Regulatory Text
• Clean Fuel Regulations

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SOURCE Environment and Climate Change Canada

Contacts: Amy Falkner, Press Secretary, Office of the Minister of the Environment, Climate Change and Nature, 873-355-9725, [email protected]; Media Relations, Environment and Climate Change Canada, 819-938-3338 or 1-844-836-7799 (toll-free), [email protected]