Electric vehicle supply chains and the federal Clean Fuel Standard emerged as early focal points for advocacy as Prime Minister Justin Trudeau’s post-election minority government began to take shape in Ottawa.
On Tuesday, a collection of 20 companies and organizations including Lion Electric, NFI Group (previously New Flyer Industries), Teck Resources, Unifor, Clean Energy Canada, the Canadian Hydrogen Fuel Cell Association, and Dunsky Energy Consulting announced formation of Accelerate, a group that will push to speed up the development of zero-emission vehicles. Set up with seed funding from the Toronto-based Ivey Foundation, Accelerate “will collaborate over the next five years to establish a domestic supply chain for zero-emission vehicles, or ZEVs, as competition heats up around the world,” the Globe and Mail reports.
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“One of the barriers for us is recognizing how big this opportunity is and ensuring that government and industry is aligned with policies that are needed to be globally competitive at attracting those opportunities,” said Acting Executive Director Moe Kabbara, a Dunsky staffer and former federal official.
“The future (won’t be based on the) internal combustion engine, and our auto sector will have to evolve or it’ll be gone,” he added. Accelerate’s mission is to “ensure that we can future-proof the auto industry, and continue to be competitive in this zero-emission-driven automotive sector that’s emerging,” while enabling Canada to “grow into new areas that are emerging as part of that supply chain.”
Lion Electric VP Patrick Gervais, Accelerate’s inaugural chair, listed supportive legislation, incentives to reduce ZEV prices and cultivate wider acceptance, a strong supply chain for manufacturers, and a network of suppliers as the group’s four priorities, the Globe says.
“The Ontario market has developed a strong service offering to the car business,” Gervais said. “From our end, as Lion, we’d like to have more [original equipment manufacturers] to come and establish themselves here in Canada to assemble their products. Canada is also a good country to test innovation,” and “if we have suppliers locally to help them out, then we’re going to create an amazing new economy in electrification of transportation.”
Meanwhile, a 26-member coalition of trade associations, companies, and think tanks is taking issue with the design of the Clean Fuel Standard, which is due to take effect in December 2022. The groups “have been lobbying the government privately for months to toughen up the regulation,” Reuters wrote in an exclusive report Monday. “They said so far the government has shown little inclination to do so, and risks missing an opportunity to boost Canada’s clean fuel industry.”
The news agency casts the industry pushback as an example of the pressure the Trudeau government is facing to take tougher climate action ahead of this year’s United Nations climate conference, COP 26, in Glasgow.
“The CFS as the draft is now proposed shouldn’t go ahead,” said Advanced Biofuels Canada President Ian Thomson. “It has the potential to be a great regulation,” but “the messaging right now is essentially going to defer by a decade the adoption of fuels that are critical to a net-zero future.”
The standard, modelled on similar rules in California and the European Union, will require gasoline and diesel producers and importers to reduce the carbon content of their products, Reuters explains. The government is counting on the CFS to save 20 megatonnes of carbon dioxide per year by 2030; outside analysts put the total closer to 15.5 Mt.
But the clean fuel lobby says the credits available under the CFS will put too much emphasis on “upstream” oil production and refining, leaving suppliers with insufficient incentive to abandon fossil fuels in favour of biofuels, hydrogen, or electricity—even though three-quarters of the life cycle emissions in a barrel of oil take place when that product is burned in an internal combustion engine.
The concern has been heightened by what Reuters calls a “recent slew of carbon capture and storage announcements” that put the emphasis on burying carbon underground rather than reducing actual oil production.
“Downstream emissions are the elephant in the room and the CFS is not tackling that,” Thomson told the news agency.
Pembina Institute Senior Analyst Bora Plumptre warned that fuel suppliers may not shift to lower-carbon products if they can’t buy or generate cheap credits to meet their obligations under the CFS. “It’s really fair for clean fuel organizations to question whether there will be a market signal for their products,” he told Reuters. “That’s the misalignment I’m worried about, and the government does not appear to appreciate that concern.”