Low-carbon fuel expansion cuts emissions, creates jobs

Parkland Corp. has announced an expansion to produce low-carbon fuel at its Burnaby refinery, creating new jobs and economic opportunities for British Columbians, while significantly reducing greenhouse gas emissions.

This is with support from British Columbia’s Low Carbon Fuel Standard compliance credits.

BC’s Low Carbon Fuel Standard (LCFS) is powering this extensive expansion that will increase production of low-carbon fuels to about 700 million liters per year by 2026. With support for more than 40% of the project costs in the form of BC Low Carbon Fuel Standard compliance credits, this $600-million upgrade and expansion will create 1,000 jobs during construction and operation, and will further reduce greenhouse gas emissions by two megatons per year – equivalent to removing 700,000 vehicles from BC’s roads.

“The Low Carbon Fuel Standard is an incredibly successful program and is the single largest contributor to reducing greenhouse gas emissions,” said Bruce Ralston, Minister of Energy, Mines and Low Carbon Innovation. “LCFS is expected to lead to five million tonnes of greenhouse gas emissions reductions by 2030, accounting for 31% of the total emissions reductions required to meet our CleanBC climate targets. We are building on our successes and developing an even more effective tool to stimulate new jobs and investment in the production and use of cleaner fuels.”

The LCFS requires fuel suppliers to gradually decrease the average carbon intensity of the fuels they supply to users in British Columbia and encourages fuel suppliers to invest in low-carbon fuel alternatives. Under the LCFS, the Province awards compliance credits to fuel suppliers for actions that increase the use of low-carbon fuels like hydrogen, electricity, renewable gas and diesel.

The Province has entered into multiple agreements since 2015 with Parkland under the LCFS to support trials and commercialization of co-processing at its Burnaby refinery. These agreements have been crucial in helping mitigate the large up-front capital costs and financial risks associated with using renewable feedstocks in existing refinery equipment.

“We applaud the Province for its vision, leadership and support of our innovative projects,” said Bob Espey, president and chief executive officer, Parkland. “Today’s announcement will help Parkland advance our decarbonization strategy and increase our ability to provide low-carbon fuels for British Columbia. Renewable fuels like the ones we are producing in Burnaby will continue to play a critical role in meeting CleanBC targets while at the same time helping motorists significantly lower their environmental footprint while using their existing vehicles.”

Government is updating the LCFS to support further increases in low-carbon fuel production, which will create new jobs and economic opportunities for British Columbians, while significantly reducing greenhouse gas emissions.

“The effects of climate change and the high cost of fuel underline the urgent need for us to reduce emissions while making lower-carbon alternatives more affordable and available,” said Premier John Horgan. “Our province is a clean-energy powerhouse that is uniquely well-positioned to thrive in a low-carbon economy. These new standards will help build on our strengths and drive new investment as we chart a path to a cleaner, brighter future with good jobs and opportunities for everyone.”

Legislation that was introduced on Monday, May 9, 2022, will expand the scope of the LCFS to include more fuels, such as aviation and marine fuels, creating further opportunities for made-in-BC low-carbon fuel production.

The changes will also enable the Province to issue credits to projects that capture carbon dioxide directly from the air. This will widen the pool of potential proponents eligible to earn LCFS compliance credits through agreements with the Province for undertaking activities that increase the production and use of low-carbon fuels, and reduce greenhouse gas emissions.

The new legislation fulfills commitments in the CleanBC Roadmap to 2030 to improve the LCFS and support the development of production capacity to generate 1.3 billion liters of made-in-BC renewable fuels annually by 2030.

Quotes:

George Heyman, Minister of Environment and Climate Change Strategy –

“Accelerating the production in BC of low-carbon fuels is one in a series of essential actions outlined by the CleanBC Roadmap to 2030 to significantly reduce greenhouse gas emissions, while generating low-carbon economic opportunities for our province. The measures outlined today respond to consensus recommendations from the independent Climate Solutions Council. They establish a new baseline for low-carbon fuel production as we intensify our efforts to create cleaner communities and an economy that works for everyone.”

Ian Thomson, President, Advanced Biofuels Canada –

“The Low Carbon Fuel Standard is BC’s single most impactful climate-change policy, giving British Columbians an affordable and effective way to fight climate change every day. In the years ahead, more made-in-BC clean fuels will reduce BC’s exposure to volatile global energy markets and create a more diversified, resilient economy, while reducing greenhouse gases from fossil-fuel use.”

Quick Facts:

  • From 2010 to 2020, actions taken to comply with the LCFS have resulted in a reduction of more than 12 million tonnes of greenhouse gas emissions.
  • The LCFS is the largest contributor to CleanBC goals and is expected to lead to a reduction of five million tonnes of greenhouse gas emissions by 2030, 31% of the amount required to meet CleanBC Roadmap climate targets.
  • BC is the only province in Canada with a Low Carbon Fuel Standard.
  • The states of California, Oregon and Washington also regulate the carbon intensity of transportation fuels.
  • The current CleanBC target of 20% reduction in carbon intensity by 2030 is in alignment with California’s targets.

Learn More:

British Columbia’s Low Carbon Fuel Standard: https://www2.gov.bc.ca/gov/content/industry/electricity-alternative-energy/transportation-energies/renewable-low-carbon-fuels

CleanBC Roadmap to 2030: https://cleanbc.gov.bc.ca/

Parkland Corporation’s Burnaby refinery: https://www.burnabyrefinery.ca/about

Three backgrounders follow.

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