Canada’s Clean Fuel Regulations (CFR) is a central policy mechanism designed to reduce greenhouse gas emissions by lowering the carbon intensity of liquid fuels used across the economy. For the renewable natural gas (RNG), biogas, biofuel, and low-carbon transportation sectors, CFR is more than a compliance framework it is a core revenue driver that underpins short and long-term market development.

Across Canada, CFR credit generation has become a significant contributor to the biogas and RNG sector’s growth. Credit market reporting shows increasing participation from landfill gas, anaerobic digestion, and renewable gas projects, reflecting the sector’s expanding role in Canada’s clean energy transition. For many operators, CFR credits are not supplementary, instead, they are essential to project viability and financing.

The CFR is widely recognized as a strong and necessary policy framework. Industry participants consistently acknowledge that it is successfully creating a market signal for low-carbon fuels and enabling investment in emissions reduction technologies that would otherwise struggle to scale.

However, interviews with Canadian Biogas Association (CBA) members reveal a more complex reality: while the policy intent is strongly supported, the implementation experience is creating material operational and financial risk.

 

Industry recognition of CFR’s value

Across all interviews conducted, members expressed a clear and consistent message: the CFR is valued and supported by the industry. Participants across RNG producers, waste management companies, municipal utilities, and financial institutions emphasized that the program has:

• Created a functioning credit market for low-carbon fuels
• Enabled new RNG and biogas project development
• Supported investment in waste diversion and renewable energy infrastructure
• Provided a monetization pathway for environmental attributes that previously had limited value

Even stakeholders who expressed frustration with administrative processes stressed that the CFR is fundamentally worth maintaining and strengthening.

Challenges across the member experience

While the value of the CFR is overwhelmingly seen as positive to industry, several challenges in navigating the regulation emerged as common for members. These challenges present real risks to businesses and undermine the signals the CFR intends to provide to industry.

Key challenge #1: Approval timelines and regulatory uncertainty

The most consistently raised concern across all interviews is long and unpredictable approval timelines, particularly for Carbon Intensity (CI) pathway approvals and credit generation.

Typical experiences include:

• CI approvals taking 6–12 months, and in some cases up to 18–24 months
• Multiple rounds of regulator comments and resubmissions
• Extended delays even after third-party verification is completed
• Uncertainty around when credits will be generated

For many participants, these delays are not just administrative inconveniences, they directly impact the financial viability of biogas & RNG projects. Delayed credit issuance reduces cash flow, complicates financing structures, and in some cases causes missed market opportunities entirely. A recurring theme is that while CI modelling itself is generally manageable, the uncertainty and iteration in regulatory review cycles drastically increases the administrative and financial burden of the process.

One participant summarized the comparison with other jurisdictions: In California’s Low Carbon Fuel Standard, approvals typically take around six months with clearer engagement and direct communication from the regulator. In contrast, CFR processes can exceed a year and involve repeated rounds of unclear feedback. Similarly, a consulting perspective highlighted broader regulatory divergence: U.S. EPA (Environmental Protection Agency) fuel programs typically approve pathways within approximately 30 days, as they rely more heavily on third-party verification. In contrast, ECCC continue to conduct full detailed reviews even after verification, extending timelines significantly.

Key challenge #2: Communication and clarity gaps

A second major theme is limited and inconsistent communication from regulators during the approval process. Stakeholders consistently reported:

• Reliance on email-only communication with long response delays
• Lack of direct engagement or structured technical discussions
• Unclear documentation of expectations for submissions
• Repeated requests for additional or revised information
• Inconsistent interpretation of requirements across reviewers

This lack of clarity is particularly challenging for complex RNG projects involving multiple feedstocks, municipal stakeholders, and upstream suppliers. Municipal participants noted that CFR requirements often do not align with industry’s internal governance structures or operational realities, resulting in additional legal, administrative, and coordination delays.

Key challenge #3: Administrative and verification burden

While third-party verification is broadly viewed positively and considered technically rigorous, many participants expressed concern about the duplication of effort between verification bodies and regulators. Key issues include:

• Extensive documentation requirements for feedstock tracking and CI modelling
• Multiple rounds of verification and re-review
• Additional regulatory scrutiny after third-party verification is completed
• High reliance on external consultants, particularly for smaller developers
• Inconsistent interpretation of verification requirements between projects

A common sentiment is that verification is robust and credible, but the subsequent government review layer creates redundancy without proportionate added value.

Key challenge #4: Feedstock complexity and RNG-specific challenges

RNG and biogas projects face unique challenges within the CFR framework due to the nature of their feedstock systems. Key issues include:

• Difficulty obtaining consistent data from upstream suppliers
• Classification disputes (e.g., landfill-diverted vs. source-separated organics)
• Sensitivity of CI scores to small feedstock changes
• High variability in documentation quality from waste suppliers
• Operational misalignment with pre-existing facility infrastructure

Municipal and food-waste-based RNG projects are particularly affected, as they often rely on fragmented data systems across multiple departments and external partners. These challenges highlight a broader structural issue. CFR was designed primarily around more uniform fuel systems, rather than decentralized waste-based fuel production.

Key challenge #5: Investment risk and market uncertainty

Financial stakeholders emphasized that CFR implementation challenges translate directly into investment risk and reduced market confidence. Key concerns include:

• Unpredictable timelines for credit monetization
• Difficulty incorporating CFR revenues into financing models
• Policy uncertainty beyond 2030
• Price volatility and lack of forward market visibility
• Delayed or missed credit generation opportunities

For developers and investors, these factors increase the cost of capital and, in some cases, deter project development entirely.

Industry perspective: reform is needed, not replacement

Despite these challenges, there is strong consensus that CFR is fundamentally working as a market-building tool. Industry supports the signal it provides and the market it enables, but its operational design introduces unsustainable financial risk. Across interviews, stakeholders consistently emphasized:

• The need to preserve the credit market signal
• The importance of continued investment support for RNG and biogas
• The value of environmental outcomes being achieved under CFR

However, they also stressed that without targeted reforms, current inefficiencies risk slowing adoption and limiting Canada’s ability to scale domestic renewable fuel production.

Key areas for improvement

Based on stakeholder input, several clear reform priorities emerge:

1. Streamline CI approval processes

• Reduce review cycles after verification
• Introduce provisional CI approvals for credit issuance
• Standardize feedstock classifications

2. Strengthen reliance on third-party verification

• Reduce duplication between verifier and regulator
• Define clearer boundaries of responsibility
• Consider verification-as-final-step models

3. Improve regulatory responsiveness

• Establish dedicated account management or technical liaison teams
• Introduce service standards for response times
• Provide clearer guidance materials and templates

4. Simplify RNG and biogas compliance frameworks

• Align requirements with operational realities
• Reduce upstream data burdens where reasonable
• Improve default CI pathways for common feedstocks

5. Enhance market certainty

• Provide clearer long-term CFR policy signals beyond 2030
• Improve transparency around credit markets
• Support mechanisms for forward-looking credit valuation

Conclusion

CBA members believe the Clean Fuel Regulations has successfully established a functioning credit market that is driving meaningful investment in Canada’s low-carbon fuel transition. Industry participants consistently recognize its importance and value. However, interviews across the biogas & RNG sector reveal a clear implementation gap. Long approval timelines, limited regulatory responsiveness, duplicative verification processes, and complex data requirements are creating unnecessary risk and reducing system efficiency.

The opportunity ahead is not to redesign CFR from the ground up, but to improve how it operates in practice, particularly by streamlining CI approvals, strengthening communication, and better aligning regulatory processes with the operational realities of RNG and biogas production.

The industry is ready to deliver emissions reductions at scale. The next step is ensuring that the regulatory system is growth oriented.