Buyers of Canada's resources increasingly expect them to be sourced and produced in ways that lower emissions and support sustainability. Clear, predictable regulations that lower our emissions protect our health and environment, give businesses the certainty to invest in ambitious projects, and make Canada a more competitive destination to do business.
- Make targeted amendments to the Canadian Environmental Protection Act, 1999 to authorize the Government of Canada to enter into long-term equivalency agreements with provinces and territories. This change will be particularly useful to equivalency agreements that adopt laws equivalent in effect to the Clean Electricity Regulations, which have long timelines: Backgrounder: Accelerating Canada's Clean Power Advantage.
- Finalise the enhanced methane regulations for the oil and gas sector and the landfill methane regulations, and welcome engagement to negotiate equivalency agreements with provinces and territories that adopt equivalent laws.
- Make targeted updates to the Clean Fuel Regulations to support the domestic biofuel sector while maintaining the Regulations' primary focus on lowering emissions.
- Announce next steps on electric vehicles, following the conclusion of the review of the Electric Vehicle Availability Standard.
Action on methane emissions
Methane emissions are responsible for about 30% of the global rise in temperature and half a million premature deaths globally each year but are generally not covered by carbon pricing. Strong, rapid, and sustained methane reductions are critical to addressing climate change and improving our health and air quality. Methane reductions are also among the lowest-cost ways to reduce greenhouse gas emissions.
The oil and gas sector is Canada's largest source of the greenhouse gases causing climate change. It is also one of the few sectors where emissions are still rising. Landfills are also significant sources of Canada's greenhouse gas emissions. In 2023, they accounted for 17% of the country's total methane emissions.
The Government of Canada has confirmed its intent to soon publish final enhanced methane regulations to reduce emissions from the oil and gas sector and final regulations for landfill methane. The oil and gas regulations will amend the existing regulations, which focused on reductions by 2025 to achieve additional reductions going forward. The landfill regulations will ensure that there are national requirements, applicable to all large landfills, to reduce landfill methane emissions across the country. The Government will also welcome opportunities to work with provinces and territories to negotiate equivalency agreements where the province or territory has rules in place to achieve equivalent outcomes.
The methane reduction regulations will spur economic growth and job creation. Canada already has over 130 companies that produce and provide technologies and services that reduce methane. Increasing domestic demand for these products and services will help create jobs and new economic opportunities for Canadian businesses as global demand for methane reduction and low-carbon energy grows.
Clean Fuel Regulations
The Clean Fuel Regulations are an important part of Canada's plan to protect the environment and human health by significantly reducing greenhouse gas emissions. They will also advance the use of clean technologies and fuels and support sustainable jobs. The Regulations reduce greenhouse gas emissions by requiring producers and importers of gasoline and diesel used in Canada to reduce the carbon intensity of these fuels. Regulated parties meet their obligations through credits that they create themselves or buy on the Clean Fuel Regulations credit market. Credits can be created from actions across all stages of fuel production and use, including supplying low carbon fuels (for example, ethanol, renewable diesel, and biodiesel).
Recent global trade pressures have affected Canada's low carbon fuel sector. On September 5, 2025, the Government of Canada announced it was taking action to support the sector by introducing a new time-limited biofuel production incentive for renewable diesel and biodiesel producers and providing additional supports for canola producers through the AgriMarketing Program, Advance Payments Program, and trade diversification measures.
Targeted amendments to the Clean Fuel Regulations will further support Canada's biofuel sector. The amendments will maintain the Regulations' primary goal of reducing emissions from fuels while providing more certainty that Canadian producers can make a significant contribution to the supply of clean fuels used for compliance. The Government will develop the amendments in consultation with provinces, territories, and industry stakeholders this fall.
In addition to reducing emissions from fuels used in Canada, the Clean Fuel Regulations have driven billions of dollars of investments in clean fuel projects in Canada, including:
- Imperial Oil's renewable diesel facility in Strathcona, Alberta, which started production in the summer of 2025 ($720 million)
- Seven co-processing projects across Canada allowing renewable feedstocks to be refined along with crude oil
- Ongoing operations and expansion of several Canadian low-carbon fuel producers that preceded the regulations, such as Tidewater
To address the economic challenges caused by changes in US policy and subsidy, the Government is creating the Biofuels Production Incentive. This program will provide more than $370 million over two years to support the stability and resiliency of domestic producers of biodiesel and renewable diesel and their Canadian value chains. This incentive will provide a per-litre subsidy to Canadian producers of biodiesel and renewable diesel, and in turn, help support demand for domestic agricultural feedstocks used to produce fuel, with the goal of reducing emissions and transitioning to a low carbon economy.
Electric Vehicle Availability Standard
The Electric Vehicle Availability Standardis intended to reduce greenhouse gas emissions from the transportation sector. It is part of a suite of federal measures that support zero-emission vehicle (ZEV) adoption. The standard currently sets increasing sales targets for new light-duty vehicles and peaks in 2035.
The gradual transition to ZEVs is key to helping Canada achieve a low-carbon economy. ZEVs will reduce carbon emissions, are more affordable to fuel and maintain, improve health outcomes, and reduce health care costs by ensuring cleaner air for communities.
While the transition to ZEVs is important, there is significant short-term economic uncertainty. Since the introduction of the Electric Vehicle Availability Standard, US tariffs have had a major impact on the auto industry. In response, on September 5, 2025, the Government of Canada announced the removal of the 2026 target and announced a review period with stakeholders on the Electric Vehicle Availability Standard to ensure it reduces emissions, remains effective, and does not place undue burden on automakers.
The Government will announce next steps on the Electric Vehicle Availability Standard as part of its overall approach to the auto sector soon.
