What are Canada's Clean Fuel Regulations?

The CFR is a federal, performance-based policy requiring the lifecycle carbon intensity of transportation fuels to decrease progressively through 2030. It creates a national compliance credit market with three categories: CC1 (project-based), CC2 (low-CI fuel supply), and CC3 (advanced vehicle energy).

Who is obligated under the CFR?

Primary suppliers — producers and importers supplying more than 400 cubic metres of gasoline or diesel annually. This includes major refiners like Imperial, Suncor, and Parkland. They must reduce average CI of fuels supplied and meet volumetric replacement requirements.

How are CFR credits created?

Credits are created under three compliance categories: CC1 for project-based CI reductions (CCS, methane abatement), CC2 for supplying low-CI fuels (RNG, ethanol, biodiesel, SAF), and CC3 for displacing fossil fuel with electricity or hydrogen in transport. An approved carbon intensity value is required for CC2 and CC3.

Can CFR credits be stacked with other carbon programs?

Yes, CFR credits can be layered with BC LCFS, Alberta TIER, voluntary carbon market credits, and other programs to create compounded revenue opportunities from a single low-carbon project or fuel pathway.

TerraNova • Compliance Carbon Markets

Canadian Carbon Pricing Series

The federal–provincial architecture for industrial carbon pricing in Canada — TIER, GGPPA, BC OBPS, Ontario EPS, WCI Quebec, and the CFR — plus policy commentary on the bilateral agreements and benchmark resets that shape it.

By Koorosh Behrang • Updated May 2026

1 Article • Active Series

Read the Latest Commentary → Markets Covered

Featured • Markets Covered • Series Lead

Policy Commentary — Latest

CD-CA-MOU-IA-2026

Canada–Alberta MOU Implementation Agreement: Certainty Delivered, Ambition Deferred

A 14-year TIER price schedule, the first-ever credit price floor, and a jointly funded CfD backstop — and because the federal government agreed, the GGPPA benchmark resets to this trajectory.

By Koorosh Behrang • May 2026 • 10 min read

Read Commentary →

What’s Inside

▶ Locked TIER price — $95 to $140 by 2040

▶ First credit price floor — $60 (2030) → $110 (2040)

▶ Joint CfDs — up to 75 Mt at $1.2 B liability

▶ CCUS ITC extended to 2035 + 20% CFR upstream floor

▶ Section 1.6.1 — GGPPA benchmark resets to Alberta’s path

Need help modelling exposure under Canada’s new federal benchmark?

Series Lead

Koorosh Behrang

Founder, Climate Decode

10+ years across WCI, Ontario EPS, Alberta TIER, BC OBPS, Canada’s Clean Fuel Regulations, the EU ETS and Shipping ETS, and FuelEU Maritime — integrating carbon pricing exposure, credit strategy, and regulatory trajectory into capital allocation and long-term compliance planning.

Speak to Koorosh →

Alberta TIER Technology Innovation and Emissions Reduction — Canada’s oldest and largest industrial carbon market. Now reshaped by the Implementation Agreement. View market →	BC OBPS British Columbia’s Output-Based Pricing System — replaced the consumer carbon tax for industrial emitters. Must meet or exceed the revised GGPPA benchmark. View market →	WCI Quebec Quebec’s cap-and-trade system, linked to California under the Western Climate Initiative. Auction floor already exceeds the new federal benchmark. View market →
Ontario EPS Emissions Performance Standards — Ontario’s replacement for cap-and-trade, operating as a sector-benchmark system equivalent to the federal OBPS. View market →	Canada CFR The Clean Fuel Regulations — lifecycle-based fuel standard. Section 3.8 of the Implementation Agreement contractualises a 20% minimum credit creation rate for upstream CCUS under the CFR. View market →	Companion Series Canada CFR Series Nine deep-dives on the Clean Fuel Regulations — credit categories, fuel LCA, RNG, hydrogen, CCS, fleet electrification, and stackability. Read the series →

Catalysing Capital for Decarbonisation

Carbon Markets Intelligence & Analysis

MRV, Decarbonisation Planning, Incentives & Market Position

Residual Balancing — End-to-End Procurement

ZEV Catalyst — Accelerating Fleet Electrification

India's Carbon Credit Trading Scheme — Market Outlook

Global Voluntary Carbon Market Coverage

CFR Series — Canada Clean Fuel Regulations

VCM Series — RECs, Scope 2, RE100, SBTi & Net Zero

Canadian Carbon Pricing Series

Canada–Alberta MOU Implementation Agreement: Certainty Delivered, Ambition Deferred

Federal & Provincial Carbon Pricing Systems

Alberta TIER

BC OBPS

WCI Quebec

Ontario EPS

Canada CFR

Canada CFR Series

Koorosh Behrang