Canada’s Clean Fuel Credit Price Passed the Compliance Fund in 2025

At a Glance — Three Numbers From the New Dataset

Two things happened in 2025 that had not happened before. The volume-weighted price broke out of the $111 to $167 band it had held for two years, and the highest reported transfer rose above the compliance fund price. The second matters more. While a buyer can discharge its obligation by paying the fund, it has no reason to pay more than the fund for a credit. Paying above it means the fund is no longer available, which happens once the 10 percent cap is used. That is a different market from the one that traded through 2023 and 2024.

The CFR Compliance Credit Market Dataset covers every reported compliance credit transfer from June 2023 to July 2026, monthly and quarterly. ECCC previously published rolling four- and five-quarter windows inside its quarterly reports. Both the monthly series and the continuous record are new.

The dataset also restates Q4 2024, which now reads 106 priced transfers on 931,373 tonnes at $147.26 against the 105 transfers on 918,917 tonnes at $149.24 published in the 2024 quarterly report. The new dataset supersedes those tables.

ECCC reports three figures for each period: the volume-weighted average of transfers that carried a price, the lowest such transfer, and the highest. Two of them matter here.

The average describes what a typical tonne cost. It is the headline number, and it is the one that moves with the general state of the market.

The maximum describes what the most constrained buyer paid. It matters because of how compliance works under the CFR. A fuel supplier with an annual obligation has three ways to meet it. It can buy compliance credits from a party that created them. It can pay into the federal emission reduction funding program, which discharges the obligation without any credit changing hands, at $350 per tonne in 2022 dollars, indexed to inflation and near $380 by 2025. Or it can defer part of the obligation into the following year under sections 16 to 18.

Both of those alternatives to buying are capped at 10 percent of the annual obligation. A supplier short by more than a fifth of its requirement has to cover the balance by buying credits, at whatever the market asks. So the maximum transfer price is a test of whether that cap is binding. While it sits below the fund price, buyers still have a cheaper way out. Once it rises above, some buyers have run out of alternatives.

Every quarter of 2023 and 2024 settled between $111.26 and $166.42. Credit supply had accumulated since the regulations took effect in July 2023, and the annual obligation was still phasing in.

Q1 2025 marks the low at $93.08. Six quarters later, the average is $343.36.

Two changes fall in that window. The federal consumer fuel charge was removed in April 2025, which raised the relative value of marginal fuels in the program. The federal election then settled whether the CFR would survive at all. A credit that may be cancelled trades below its compliance value, and that discount unwound through 2025.

The average price stayed below the compliance fund throughout. The maximum crossed it in Q3 2025. Circle area shows credits transferred with a price; the dotted line is the highest transfer reported in each quarter. Q2 2026 excludes two affiliated-party transfers at $580 that ECCC flags separately. Source: ECCC, CFR Compliance Credit Market Dataset, July 2026.

Through 2023 and 2024, the highest transfer ECCC recorded in any quarter stayed below the fund price. The peaks were $300 and $280, against a fund near $364 and $372. Every buyer in those two years had a cheaper way to discharge its obligation than the dearest credit on offer.

That stopped in the second half of 2025. The quarterly maximum reached $367 in Q3 and $390 in Q4, and the first half of 2026 carried prints above $400. The highest arms-length transfer in the twelve months to July 2026 was $466, excluding two transfers between affiliated parties that ECCC flags separately.

Paying $466 for a credit when the fund discharges the same obligation for about $380 only makes sense once the 10 percent cap has been used. Beyond that point the fund is closed to the buyer. Deferring is worse still, because it settles at the following year’s fund price plus a volume carry, so a supplier expecting a tighter market next year pays more by waiting than by buying now.

One timing note applies to all of this. A compliance period runs the calendar year but settles by roughly the end of July in the following year, so transfers through the first seven months of 2026 are covering 2025 obligations. Counted that way, the 2025 compliance year saw 6.53 million credits change hands with a price, at an average of $295.60, with the twelve monthly maxima averaging $424.

ECCC attributes the unpriced volume to transfers made under an agreement to transfer credits upon creation (section 108) and transfers reported at zero or near-zero value (section 106), and states these generally arise from broader fuel supply contracts. A refiner contracting for renewable diesel takes the credits with the fuel and strikes no separate credit price.

The priced share fell from 73.3 percent in 2023 to 31.2 percent in 2025. Every price quoted in this article, including ECCC’s own headline average, comes from that shrinking minority of the volume.

Priced transfers rose from 109 in 2023 to 507 in 2025, while the average priced trade fell from about 16,500 tonnes to about 10,500, and to roughly 7,300 in the first half of 2026. More parties are trading, in smaller pieces.

Minimum reported prices sit between $1 and $16 in almost every quarter of the record, against maxima in the hundreds. That dispersion has not narrowed since the market opened.

Hydrogenation-derived renewable diesel created 917,632 tonnes of compliance credits in the third quarter of 2025, roughly a third of all liquid low-carbon fuel credits that quarter. All of it came from imports, 480,055 cubic metres. ECCC withholds the domestic production figure and folds it into a combined other low-carbon-intensity fuel line, which reported 85,408 cubic metres in the quarter. Canadian output is therefore not zero, and it is smaller than that combined figure, which also carries other fuels.

Ethanol created more credits in the quarter, 1.31 million tonnes, at a volume-weighted carbon intensity of 39.6 gCO₂e per megajoule against renewable diesel’s 32.0. Biodiesel is cleaner at 19.5, on a smaller base.

Renewable diesel is the fuel the market turns to when it needs additional credits, and every disclosed cubic metre of it is imported. The price of the next Canadian credit is therefore set at the end of a supply chain that also serves the United States Renewable Fuel Standard and California’s Low Carbon Fuel Standard, both of which bid for the same barrels.

The priced share has fallen in every full year since the market opened. ECCC’s published average only covers credits that carried a price, so if that share keeps falling the average describes less of the market and says less about what a buyer short of credits actually pays.

The gap between the average and the maximum moved together through 2023 and 2024, then widened from Q3 2025. A widening gap means some buyers are paying well above the typical tonne, which is what happens when part of the market is short while the rest is covered.

Domestic renewable diesel production is not disclosed. ECCC withholds the figure and aggregates it into a combined line for confidentiality, so the credits reported against renewable diesel are the imported ones by construction. The cost of the next credit is therefore a question of what it takes to outbid American and Californian buyers for the same barrels. A Canadian plant at scale would change that, and the published tables would not show it directly.

Source: Environment and Climate Change Canada, CFR Compliance Credit Market Dataset (Monthly and Quarterly), July 2026; CFR Quarterly Credit Market Reports 2024–2025; CFR 2022–2023 Annual Credit Market Report. Compliance periods are calendar years settling by approximately 31 July of the following year. All figures are as reported by ECCC.