Natural gas costs to double for chemistry industry with proposed Clean Fuel Standard
April 9, 2019
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The Chemistry Industry Association of Canada (CIAC) is expressing concern about Ottawa’s proposed Clean Fuel Standard (CFS), saying that if implemented as proposed, the CFS will push the total carbon price in excess of $200 a tonne, effectively doubling the cost of natural gas for the industry.
“As an industry, we believe climate change is an urgent issue that must be addressed,” said president and CEO of CIAC, Bob Masterson. “We believe that provincial climate change policies and the federal carbon pricing backstop system get a number of things right: carbon costs are transparent and predictable; there is an upper ceiling on costs faced by industry and consumers of $50 a tonne by 2022; competitiveness considerations have been taken into account for trade-exposed industrial sectors; and industry and consumers are left to their own decision making to determine how to minimize exposure to the carbon price signal.”
The CFS as currently designed will be the first standard in the world to include industrial natural gas and propane. Ottawa has proposed a phased-in approach targeting liquid fuel in 2020.
The CFS, in its current form, will duplicate provincial carbon pricing policies and the federal carbon pricing backstop, doubling costs for our industry. While accommodation has been provided to industries unable to bear the full $50 carbon price signal, no such accommodation is proposed in the CFS.
The CIAC says that to keep Canada’s chemistry sector competitive, governments must assess the additional costs on the sector as they implement policies to tackle climate change, adding that Canada should support a carbon policy that recognizes emission-intensive, trade-exposed sectors and encourages investment.