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Fuels

Ontario to Move to E15 by 2025

Canada’s largest fuel market adopts ethanol blend, fights carbon tax and cap-and-trade
Photograph: Shutterstock

TORONTO —Ontario plans to adopt E15 as its national standard as soon as 2025 as part of a wider environmental initiative. Canada’s current national standard ethanol blend is E5.

The Province of Ontario’s Environment Plan, announced in early December, includes a regulation that would increase the renewable content requirement in gasoline to 15% as early as 2025. It would also encourage the use of renewable natural gas and lower-carbon fuels, and the expansion of electric-vehicle charging.

Ontario represented more than one-third of Canada’s refined petroleum product demand in 2016 at 607 million barrels per day, according to the National Energy Board.

In a joint statement, three groups that support greater biofuel use—Growth Energy, U.S. Grains Council and Renewable Fuels Association (RFA)—praised Ontario’s plan.

“As one of the largest markets for ethanol, this is a huge milestone for Canada and the people of Ontario," the statement said. "Ontario recognizes the important environmental, economic and health benefits that ethanol provides and we look forward to seeing this plan become a reality by 2025.”

Carbon Tax and Cap-and-Trade Pushback

Ontario has introduced the environment plan as an alternative to a cap-and-trade initiative and carbon tax that had been championed by Prime Minister Justin Trudeau.

In 2016, most provinces, including Ontario, had signed onto the federal government’s climate-change plan, which included putting a price on carbon through the Greenhouse Gas Pollution Pricing Act. The federal government said that any province that did not come up with its own carbon pricing plan would have to adopt the federal carbon tax and a new fuel tax.

The federal carbon-tax initiative would levy a $20-per-ton tax on greenhouse gas emissions, beginning in 2019. The tax would rise by $10 per year to reach $50 per ton by 2022, CBC reported.

While the Ontario government was initially on board with the carbon tax and cap-and-trade plans, a change in administration has shifted its position. In June, incoming Ontario Premier Doug Ford said he would fight both measures, arguing they do not help the environment or help families, Financial Post reported. He had promised voters during his campaign that exiting the cap-and-trade market would help cut gasoline prices by 10 cents per liter.

In October, Ontario legislators voted to repeal a cap-and-trade program, which had been introduced in 2017. The province is submitting its own environment plan to the federal government as a replacement for the carbon tax and cap-and-trade efforts. Ford, however, has not specified how he’ll make up revenue lost by exiting the cap-and-trade program. As of 2017, Ontario had raised nearly $3 billion through emission permit auctions sold in a carbon market the province shared with California and Quebec. 

This November, the Ford administration filed a legal document detailing its case against the carbon tax, describing it as “job-killing” and unconstitutional, and arguing that the provinces are responsible for regulating greenhouse gas emissions, not the federal government.

 

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