Clean Fuel Regulations (SOR/2022-140)

Marginal note:Aggregate quantitative misstatements

• 153 (1) Any quantitative misstatements in an application or report, other than those that are negligible, must be aggregated to determine their overall effect on the information in the application or report.

• Marginal note:Negligible quantitative misstatement

  (2) For the purposes of subsection (1), a quantitative misstatement is considered negligible if its value is less than 5% of the applicable materiality quantitative threshold referred to in section 150.

• Marginal note:Material quantitative misstatement

  (3) The aggregate value of quantitative misstatements in an application or a report is considered to be material when the result determined by the following formula is greater than the applicable materiality quantitative threshold referred to in section 150:

  (A ÷ B) × 100

  where

  A

  is the aggregate value of the quantitative misstatements in the application or report; and

  B

  is the absolute corrected value of quantitative misstatements, as determined by the verification body based on the data that, in the opinion of the verification body, should have been used to calculate those values in the application or report.

Marginal note:Opinion

154 The verification of an application or report must result in

• (a) an unqualified opinion, if the verification body finds that the application or report does not contain any material misstatements and was prepared in accordance with these Regulations;

• (b) a qualified opinion, if the verification body finds that the application or report contains one or more misstatements that are not material or finds that there is not sufficient evidence to establish whether the misstatements are material but that their effect on the application or report is not material;

• (c) an adverse opinion, if the verification body finds that the application or report does not present a true and fair view in all material aspects or does not meet the criteria referred to in section 149; or

• (d) the disclaimer of the verification, if the verification body finds that it does not have sufficient information or evidence to reach a decision.

Excess Compliance Credits

Marginal note:Export — request for cancellation and report

• 155 (1) If compliance credits are created by the production in Canada or import into Canada of a low-carbon-intensity fuel that is subsequently exported, the following persons must request the cancellation of the compliance credits and report the export of the fuel to the Minister:

  • (a) in the case where the fuel is exported by a primary supplier or registered creator, the primary supplier or registered creator who exported the fuel;

  • (b) in the case where the compliance credits have been the subject of a transfer request referred to in section 108 and the fuel is exported by a person who is not a primary supplier or registered creator, the primary supplier or registered creator who received the fuel from the registered creator who created those compliance credits; or

  • (c) in any other case, the registered creator who created the compliance credits as provisional compliance credits.

• Marginal note:Cancellation request in report

  (2) The request for the cancellation of the compliance credits must be included in the following:

  • (a) if the cancellation request is made by a registered creator, the report that they submit under section 122; or

  • (b) if the cancellation request is made by a primary supplier who is not a registered creator, the report that they submit under section 127.

• Marginal note:Credit-creation report

  (3) In the annual credit-creation report that a registered creator submits under section 120 respecting the creation of provisional compliance credits during a compliance period, the registered creator must subtract the following from those credits:

  • (a) the compliance credits created from the production in Canada or import into Canada of a low-carbon-intensity fuel under section 19 or 20 that is subsequently exported; or

  • (b) the number of compliance credits determined in accordance with subsection 88(2) or 90(2).

Marginal note:Re-submission of report

156 A registered creator must, within 60 days after the day on which they learn of an error made in a report that they submitted under these Regulations, other than a report submitted under section 121, if the error exceeds the significance threshold provided in the Methods for Verification and Certification, submit to the Minister

• (a) an updated report in which the error has been corrected; and

• (b) an updated verification report that contains a verification statement with respect to the corrected version of the report.

Marginal note:Notice of error

157 A registered creator must, within five days after the day on which they learn of an error made in a report that they submitted under subsection 120(1) or 122(1) that resulted in the deposit of a number of compliance credits into one of their accounts opened under section 28 that is greater than the number that should have been deposited, send a notice of that error to the Minister that indicates

• (a) the name of the report that contains the error and the date on which it was submitted;

• (b) the provisions of Schedule 11 or 13 to which the error relates and the nature of the error;

• (c) the difference between the number of compliance credits that were deposited and the number that should have been deposited; and

• (d) whether the account into which the compliance credits were deposited is a liquid-fuel-compliance-credit account opened under paragraph 28(a) or a gaseous-fuel-compliance-credit account opened under paragraph 28(b).

Marginal note:Suspension of excess compliance credits

• 158 (1) Subject to subsection (2), if the Minister has reason to believe, following the submission of a report by a registered creator or primary supplier under section 120, subsection 121(3) or sections 122 or 127, or following the submission of the form referred to in section 171, that excess compliance credits have been created, the Minister may suspend the excess compliance credits that are in any of the accounts of the registered creator or primary supplier.

• Marginal note:Export

  (2) If the Minister has reason to believe, following the submission of a report by a registered creator under section 120 or 122 or a primary supplier under section 127, that excess compliance credits have been created by the production in Canada or the import into Canada of a low-carbon-intensity fuel that is subsequently exported, the Minister may suspend the excess compliance credits that are in the account of

  • (a) the primary supplier or registered creator who exported the fuel, in the case where it was exported by a primary supplier or registered creator;

  • (b) the primary supplier or registered creator who acquired the fuel from the registered creator who created the compliance credits, in the case where it was the subject of a transfer request referred to in section 108 and was exported by a person who is not a primary supplier or registered creator; or

  • (c) the registered creator who created the compliance credits as provisional compliance credits, in any other case.

• Marginal note:Suspension of equivalent compliance credits

  (3) If any number of the excess compliance credits are not in the accounts referred to in subsections (1) and (2), the Minister may suspend the same number of equivalent compliance credits that are in the accounts or subsequently deposited into the accounts.

• Marginal note:Notice of suspension

  (4) When the Minister suspends, under subsection (1) or (2), excess compliance credits that are in an account or suspends, for the first time, equivalent compliance credits under subsection (3), the Minister must send a notice to the account holder.

• Marginal note:Contents of notice

  (5) The notice must include

  • (a) the report in which the Minister has reason to believe that an error exists;

  • (b) an indication of the provisions of Schedule 11, 12, 13 or 18, or the provisions of the form referred to in section 171, to which the error relates as well as the nature of the error;

  • (c) an indication of the account into which the excess compliance credits were deposited;

  • (d) an indication of the number of excess compliance credits that are to be cancelled;

  • (e) an indication of the number of compliance credits, if any, that are suspended under subsection (1) or (2);

  • (f) an indication of the number of equivalent compliance credits, if any, that are suspended under subsection (3) and the compliance period in which they were created;

  • (g) an indication of whether the suspended compliance credits are in a liquid-fuel-compliance-credit account opened under paragraph 28(a) or a gaseous-fuel-compliance-credit account opened under paragraph 28(b); and

  • (h) a statement that the Minister will suspend any additional equivalent compliance credits until the number of compliance credits that are suspended is equal to the number of excess compliance credits.

• Marginal note:No use or transfer

  (6) Beginning on the day on which the notice referred to in subsection (4) is received by the account holder and ending on the day on which the suspension is lifted, the account holder must not use suspended compliance credits to comply with the total reduction requirement or a volumetric requirement set out in subsection 6(1) or 7(1) and must not transfer suspended compliance credits under section 106 or 112.

Marginal note:Lifting of suspension

159 If an additional review by the Minister confirms that excess compliance credits were not created, the Minister must lift the suspension of the compliance credits.

Marginal note:Cancellation of excess credits

• 160 (1) In the following circumstances, the Minister must cancel the excess compliance credits, or the equivalent number of compliance credits, that are in an account referred to in subsection 158(1) or (2):

  • (a) a person makes a request referred to in subsection 155(1) for the cancellation of compliance credits;

  • (b) a registered creator sends a notice to the Minister in accordance with section 157; or

  • (c) after the Minister has suspended compliance credits under subsection 158(1) or (2), an additional review by the Minister confirms that excess compliance credits were created.

• Marginal note:Insufficient number of equivalent credits

  (2) If the number of excess compliance credits or equivalent compliance credits that are to be cancelled under subsection (1) is greater than the number of such compliance credits in the account, the Minister must send a notice to the account holder that indicates the number of compliance credits that are missing.

• Marginal note:Obligation to balance credits

  (3) The account holder must, no later than 90 days after the day on which they receive the notice,

  • (a) ensure that the number of equivalent compliance credits in the account is equal to the number of compliance credits that are missing; and

  • (b) request that the Minister cancel the equivalent compliance credits.

• Marginal note:Cancellation of missing compliance credits

  (4) On receipt of the request referred to in paragraph (3)(b), the Minister must cancel the equivalent compliance credits.

Measurement, Electronic Reporting and Records

Measurement

Marginal note:Requirements

• 161 (1) Subject to subsections (2) and (3), a person who is required by these Regulations to record any volume or quantity must determine that volume or quantity

  • (a) by using one or more measurement devices that meet the requirements of the Weights and Measures Act and the regulations made under that Act;

  • (b) in accordance with a measurement standard or method that is appropriate for the determination and cited in the Manual of Petroleum Measurement Standards, published by the American Petroleum Institute; or

  • (c) in accordance with any applicable emission-reduction quantification method established under subsection 31(1) or 32(1).

• Marginal note:Non-application

  (2) If there is no measurement device, standard or method referred to in subsection (1) that would allow the person to determine the volume or quantity in accordance with that subsection, the person must record the volume or quantity as accurately determined by another person who is independent of them and record the following information obtained from the other person:

  • (a) their name, civic address, postal address, telephone number and, if any, email address;

  • (b) the volume, expressed in cubic metres, or the quantity, expressed in kilograms for solids, in cubic metres for liquid, in cubic metres or kilograms for gas and in kilowatt-hours for electricity, and an indication of the fuel in question;

  • (c) the date on which and the location where the determination was made; and

  • (d) the measurement device, standard or method used to determine the volume or quantity.

• Marginal note:Volumetric correction

  (3) Unless otherwise specified by a provision of these Regulations, a person who determines a volume in accordance with subsection (1) must correct the volume to standard conditions. However, a person who imports into Canada a volume of fuel may correct its volume to a temperature of 15.6°C (59°F), if the person records the correction.

Marginal note:Biogas energy density

• 162 (1) A measurement of the energy density of biogas may be carried out in accordance with the fuel heat content monitoring requirements set out in section 2.D.3 of the document entitled Canada’s Greenhouse Gas Quantification Requirements / Greenhouse Gas Reporting Program, published by the Minister, and must be corrected to standard conditions.

• Marginal note:Minimum sampling

  (2) A primary supplier must conduct the sampling of biogas at least once every month.

• Marginal note:Determination of energy density

  (3) The weighted average of the energy density of biogas for a compliance period must be determined based on the measurement of energy density weighted by the volume of biogas produced.

Marginal note:Rounding

• 163 (1) Unless otherwise specified by a provision of these Regulations, a person who performs a calculation or submits a report under these Regulations must round the result of the calculation or all values in the report, as the case may be, in accordance with the rounding procedures set out in International Standard ASTM E29-22, entitled Standard Practice for Using Significant Digits in Test Data to Determine Conformance with Specifications, published by ASTM International.

• Marginal note:Tonnes of CO₂e

  (2) A primary supplier must round the result of a calculation made under section 9 to the nearest whole tonne of CO₂e or, if the result is halfway between two consecutive whole numbers, to the greater of those whole numbers.

• Marginal note:Approved carbon intensity

  (3) A registered creator, carbon-intensity contributor or foreign supplier must round a carbon intensity approved by the Minister under subsection 85(1) to the nearest whole number or, if the result is halfway between two consecutive whole numbers, to the greater of those whole numbers.

• Marginal note:Compliance credits

  (4) A number of compliance credits created under a provision of these Regulations must be rounded to the nearest whole number or, if the result is halfway between two consecutive whole numbers, to the greater of those whole numbers.

Electronic Reporting

Marginal note:Electronic submission — report or notice

• 164 (1) A person who is required by these Regulations to submit a report or send a notice to the Minister must do so electronically in the form specified by the Minister and the report or notice must bear the signature of the person’s authorized agent.

• Marginal note:Paper report or notice

  (2) If the Minister has not specified an electronic form or it is impractical for the person to submit the report or send the notice electronically because of circumstances beyond their control, the person must submit or send a paper version of the report or notice, signed by their authorized agent, in the form specified by the Minister or, if no form has been specified, in any reasonable form.

• Marginal note:Calculation of carbon intensity

  (3) A person who submits a calculation of a carbon intensity to the Minister must submit it electronically in the form specified by the Minister or, if no form has been specified, in any reasonable form.