Canadian regulators today confirmed the first trades in the country's new, federal low-carbon fuel standard (LCFS).
Environment and Climate Change Canada (ECCC) said that the system used to report and transfer Clean Fuel Regulations (CFR) credits had recorded trades in the first week since credits became eligible for transfers. The regulator did not comment on trade volume or prices.
The first provisional credits generated in 2022 and 2023 and meeting certain reporting requirements became eligible for trade beginning on 30 June. ECCC last month invited comment on what market data participants might need and how often to report them. Feedback on that continues, the agency said.
LCFS programs require yearly reductions to transportation fuel carbon intensity. Higher-carbon fuel supplied to Canada and exceeding the annual limit incurs deficits that producers or importers must offset with credits generated from approved, lower-carbon alternatives. The CFR target a 15pc reduction in road fuel carbon intensity by 2030.
Canadian regulators finalized the program last June, but obligations began this month. In the interim, companies were able to register to qualify low-carbon fuels they supplied into Canada last year to generate credits under the program. The first early credits were produced from verified reports that were due on 30 June.
That set off a scramble this spring as credit generators struggled to find qualified auditors needed to verify those first credit-generating reports. ECCC last month pledged flexibility for reporting parties that documented their efforts to meet the deadline. At least 10 auditors were approved by early July.
ECCC declined to comment on how many companies had filed verified reports by the deadline, or how many the agency expected would need the additional flexibility. The filing system was functioning as expected, the agency said.
Canada administers North America's first federal LCFS program. A previously-established provincial British Columbia LCFS will continue to operate alongside the new federal program, allowing suppliers to generate credits for both programs in that market.
