News and Events
February 17, 2023
With the release of the 2022 Fall Economic Statement in November, all eyes are on Budget 2023 to see how Finance Canada will respond to the American Inflation Reduction Act and finalize incentives for clean technologies.
The FES was missing important incentives for biogas & RNG when they outlined the investment tax credits for clean technologies and hydrogen. The CBA has been meeting with government to ensure this oversight isn’t translated into the Budget, which will be released in the coming months. The CBA’s pre-budget submission makes clear three key asks that would accelerate development of biogas & RNG in Canada to reach its fullest potential:
Finance Canada has characterized the investment tax credits proposed in the FES as a response to the U.S. Inflation Reduction Act (IRA) passed in August 2022. However, more will need to be done to make Canada a competitive investment jurisdiction. A Canadian clean fuel production credit (tax-based or program funded) is the most direct and effective mechanism to respond to the IRA’s section 13704 on specified fuels, which contains 45Z Clean Fuel Production Credit. The Canadian credit system should use carbon intensity (CI) to quantify crediting and ensure clean fuel feedstock and technology neutrality.
CBA strongly supports the proposed ITC for clean technology and hydrogen that were introduced in the FES 2022. However, the omission of biogas & RNG left a very important tool out of the toolbox. The CBA recommended that biogas & RNG be included in the list of eligible technologies for the new Clean Technology ITC and that all low-carbon gaseous fuels receive equal treatment under the proposed ITC. This is the CBA’s current advocacy focus to have included in Budget 2023.
The CBA encourages the Government of Canada to provide funding of for the development of a Clean Gas Standard. A Clean Gas Standard can work alongside the Clean Fuel Regulations, the proposed Clean Electricity Regulation, and the proposed Oil & Gas Emissions Cap and apply to GHG emissions not covered by these regulations. It would also provide additional crediting opportunities for low-carbon gaseous fuels, such as Biogas & RNG and hydrogen. The CBA has been meeting with industry stakeholders to discuss the potential design of a Clean Gas Standard to reduce the carbon intensity of gaseous fuels.
Finance Canada will release the budget in March or April this year. The CBA is working hard to ensure there is recognition for Biogas & RNG in Budget 2023.