Liberals’ draft Clean Electricity Regulations won’t get sector to net zero by 2035, experts say

According to the United Nations Production Gap report, as of 2019, coal, oil and gas accounted for over 75 percent of global greenhouse gas emissions and nearly 90 percent of carbon dioxide emissions. 

For decades the UN and other international organizations like the Intergovernmental Panel on Climate Change (IPCC), followed by national and local environmental organizations popping up around the globe, have been in agreement that a rapid transition to clean electricity sources, moving away from dirty fossil fuels, will be our best way to avoid the most devastating impacts of climate change.

Governments have been slow to catch on. 

While every level of government in Canada has emissions reductions targets — they differ greatly between levels of government — not enough action has been taken on any of them to achieve their goals. Five audits released by Canada's Environment Commissioner late last year concluded the nation was not on track to meet its 2030 interim target of a 40 to 45 percent reduction in emissions below 1990 levels. Ontario significantly weakened its target when Doug Ford was elected Premier in 2018 and has since gone backward on many objectives. Even municipalities like Mississauga that have been leaders in clean transit and other environmental initiatives are not on track to meet their targets.

At every level of government, electrification is touted as the solution.

“Cleaner electricity means cleaner air, healthier communities, and more jobs as we build Canada’s clean and sustainable economy of tomorrow”, Environment Minister Steve Guilbeault said in a promotional video on the Ministry’s website. 

2020 breakdown of Canada’s energy consumption by fuel type.

(Natural Resources Canada)

But electrification will only be successful if that electricity is generated from clean sources. In 2021, 82 percent of electricity in Canada was supplied by non-emitting sources (including, hydro, renewables and nuclear), with 60 percent from hydro, and wind and solar making up 8 percent. 

With provinces like PEI and British Columbia leading the way in clean production, making up 99 and 95 percent of their respective grids, other provinces, like Ontario —which five years ago touted one of the cleanest electricity grids with 94 coming from non-emitting sources (60 percent of which comes from nuclear)—has increasingly become dirtier thanks to the PCs’ love of natural gas. 

The federal government is in the midst of developing Clean Electricity Regulations (CER) to guide the nation to a net zero electricity grid by 2035, a goal that Stephen Thomas, clean energy manager at the David Suzuki Foundation (DSF) said is laudable. The problem is that the regulations as written will not get Canada to that goal.

“The 2035 goal is one that every G7 country is committed to. It's consistently something that the UN Secretary General calls on countries like Canada to do in order to meet our climate goals. And it comes with huge benefits, but we don't see those benefits unless we actually reach the target,” he told The Pointer.

In the fall of 2023, the federal government released a draft of the CER which provided oversight on provincial energy grids to support a clean and sustainable energy transition. 

The draft CERs do recognize that there may be a need for some natural gas production past 2035, but the policy is a promising step forward in showing that governments cannot rely solely on fossil fuels. 

“The clean electricity regulations that the federal government has proposed and put forward is to ensure that a the provinces that are already well along the way to decarbonizing their systems, actually are incentivized to go the rest of the way and ensure that the role for fossil fuel generation is limited to really that peak need and ensuring reliability of the of the overall grid,” Aakash Harpalani, director of clean energy at The Atmospheric Fund (TAF), previously told The Pointer.

Brampton’s gas-powered electricity plant. While intergovernmental bodies continue to warn of the dangers of fossil fuel and the need for a swift transition to renewables, the government of Ontario continues to promote natural gas use with plant expansions.

(Alexis Wright/The Pointer files)

But even in the original draft, environmental organizations identified several loopholes that would allow provinces, like Ontario and Alberta, to continue burning fossil fuels well into the future. Most notably, the original draft exempted gas boilers and combustion engines that come into service before 2025 to surpass the 30 tonne per gigawatt hour set on other generators for a lifespan of 20 years.

The government received 214 comments on the Online Regulatory Consulting System and over 18,000 submissions—Thomas said he can confidently say more than 10,000 were in support of the regulations or of stricter regulations because they came from the supporters of the DSF and associated organizations — on the draft standards. A poll commissioned by Clean Energy Canada and undertaken by Abacus data also showed that 71 percent of Canadians support CER. Nonetheless, an updated draft of the regulations released February 16 provided significantly weaker legislation, opening up further loopholes for future fossil fuel production. 

“Even the version of this policy that we saw in the summer was not strong enough to get Canada to zero emissions by 2035, that there will be millions of tonnes of carbon in the year 2035 and even into the 2040 decade with this policy,” Thomas said. “The federal government says that they're still committed to meeting this target. But this policy won't get us there. And we don't see any other policy that they're developing in Canada that will fill in that gap.”

A list of the changes the DSF has particular concern with include: a temporary exemption for new fossil fuel plants built after 2025 — that had significant investment prior — that would allow them to emit freely until at least 2045; and the possibility of generators purchasing offsetting credits as opposed to reducing actual emissions. 

“The suite of flexibilities, as they call it, and loopholes, as we're calling. It simply doesn't get us to zero,” Thomas said.

Prior to the changes, Harpalani told The Pointer that the regulations were good for provinces who still heavily relied on fossil fuels, but for provinces like Ontario who are already ahead, the transition would look much different.

“We do have quite a bit of a headstart relative to some of the other provinces of the country. We had the benefit of having a large fleet of nuclear and hydro generation that really supplies the bulk of energy today,” he said. “Which is why it is discouraging to see us continue to rely on natural gas.”

According to the public update document, released by Environment and Climate Change Canada on February 16, the federal government is considering changes to the performance standard “to give provinces, utilities and other electricity regulators and providers more flexibility while still delivering significant emissions reductions”.

The proposed emissions limit approach would change the performance standard from a fixed emission intensity standard which would apply uniformly to all units, to an annual emission standard tailored to each unit’s capacity. It would allow parties that operate multiple units to pool the emissions limits of individual units operating in the same jurisdiction. The emissions limit approach also allows for offset purchases for excess emissions. 

Under the original draft of the regulations, there is a provision that would require the Ministry to review emergency exemptions prior to their implementation. The public update document notes that many stakeholders have argued this could inhibit decisions to operate during emergencies, leaving the Ministry to consider a provision that would allow system operators to declare an emergency and trigger an exemption, provided a notification is sent to the Minister.

The public update from the Ministry is questionably biased, noting the majority of the changes were lobbied for by industry stakeholders and fossil fuel operators.

“Of course, we don't know what happens behind closed doors. But what we know is that the fossil fuel industry is very busy and is spending a lot of money and time lobbying the federal government to attack every climate policy, including this,” Thomas said.

Over the past year, fossil fuel lobbyists have ramped up their efforts to detract governments from implementing clean energy policies. At COP28 in November, 2,456 fossil fuel lobbyists were registered, compared to 636 last year, according to the coalition Kick Big Polluters Out. The total number surpassed the number of delegates for any one country, except for Brazil and host country UAE. According to an analysis by Environmental Defence of the UN’s Provisional List of Registered Participants at COP28, Canada gave Party badges to 35 people with ties to the fossil fuel industry, up from eight in 2022.

The impacts of this lobbying on the environment are clear. Global greenhouse gas emissions have continued to steadily increase — except for a blip during the COVID-19 pandemic — and have yet to reach their peak. According to a study published in the journal Earth System Science Data in June, only about 250 billion tonnes of carbon dioxide equivalent can be emitted globally to avoid concentrations on greenhouse gases that would raise global temperatures by an average of 1.5 degrees. At the current annual rate of greenhouse gas emissions — approximately 54 billion tonnes per year — we would easily surpass this temperature threshold before the end of the decade. 

Wind and solar are increasingly becoming the cheapest forms of electricity globally.

(Alexis Wright/The Pointer files)

But Thomas emphasized that a continuous reliance on fossil fuels will also have dramatic economic impacts as renewables increasingly become the cheapest sources of electricity production.

“I believe that if we keep burning fossil fuels in Canada, that is a good thing for the billionaires who are making windfall profits on fossil fuels right now,” he said. “But it is a bad thing for everyone else who's trying to afford their energy bills in Canada, because we know that fossil fuels are more expensive than things like wind and solar.”

One of the repeated arguments by industry stakeholders and operators highlighted by the Ministry was that with the regulations, some projects would be decommissioned before the end of their lifespan, arguing a waste of energy. But Thomas said that this is not a line that we have the privilege to draw. The energy transformation has been dictated by the reality of the climate crisis.

“Any efforts to kind of kick the can down the road, as we've done repeatedly in Canada only makes this problem worse,” he said. “It's really important that we get this right in the electricity sector in the year 2035 because it's the first real opportunity we have to phase out fossil fuels in Canada. Other sectors of heavy industry are much harder to get to zero emissions, and may take longer to find the right solution. But with electricity, we have the solutions ready to go right now. And all we need to do is get out of our own way, and phase out fossil fuels and bring in the benefits of renewable energy.”

One small silver lining that Thomas identified is a consideration to redefine the minimum size threshold. In the original draft, units with capacity less than 25 megawatts would not be subject to the CER. However, to avoid operators building multiple smaller units, the Ministry is considering changing the provision to apply to facilities whose collective capacity is greater than 25 megawatts. 

“It's nice to see that that one small area is moving in the right direction. But every major change that we see being considered is moving in the wrong direction, is moving in the direction of allowing more fossil fuels to be built on the grid and allowing those fossil fuels to pollute freely for longer,” he said.

The ECCC is seeking approval to publish the final CER later this year. In the meantime, the Ministry is welcoming feedback on the draft until March 15. 

Email: [email protected]

Twitter: @rachelnadia_

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