The BC Greenhouse Gas Reduction (Renewable And Low Carbon Fuel Requirements) Act came in to force at the beginning of January.

Ethanol and Biodiesel Standards

Under the Act, a supplier who sells gasoline (for the first time after the fuel is manufactured or imported) in BC, must ensure that renewable fuel (ethanol produced from biomass) comprises 5% of supplies for each calendar year starting in 2010.

A supplier who sells diesel (for the first time after it is manufactured or imported) in BC, must ensure that renewable fuel (biodiesel) comprises 3% of supplies for the calendar year 2010; 4% for 2011 and 5% for 2012.

A handful of companies in BC import or manufacture transport fuels, but there are also numerous smaller companies that will be affected by the new requirements.

Notional Transfers

A supplier may "notionally transfer" all or part of the renewable fuel that it supplies in a compliance period to another supplier. In other words, if one fuel supplier in the province supplies more renewable fuel than is required under the Act that supplier will effectively be able to sell its "over-compliance" as a credit to another supplier who cannot (or who decides not) to meet the compliance obligation.

These trades take place under private contract.

Compliance reports must set out the volume of fuel notionally transferred as measured in litres, and be evidenced by "dated contracts, records of transfer, invoices, sales receipts, and records of payments". Compliance reports must be submitted in March 2011 for the 2010 reporting year.

Carbon Intensity Standards - Emissions Trading

Also, suppliers who sell gasoline, diesel, natural gas, propane, hydrogen or electricity (for the first time after it is manufactured or imported) in BC for use as a transport fuel must ensure that the weighted average of "carbon intensities" for all such fuels is no greater that a prescribed level for a compliance period. However, there are no penalty provisions yet in force for this part of the Act.

"Carbon intensity" means the GHG emissions proportionate to the energy provided by the fuel (measured in grams of carbon dioxide equivalent per megajoule)

As with the renewable fuels standard, suppliers will also be able to "notionally transfer" to other fuel suppliers carbon dioxide equivalent emissions if they exceed requirements.