Re‑enact Sulphur Credit Trading 2026–2030

Summary#

The federal government is proposing to re‑enact the temporary sulphur credit trading system in the Sulphur in Gasoline Regulations so refiners and importers can use, trade, or bank credits for compliance from 2026 through 2030. The notice was published on December 13, 2025 and is open for public comments for 60 days.

What it does#

• Re‑starts the temporary sulphur compliance unit (SCU) trading system for the years 2026–2030.
• Lets eligible suppliers create SCUs, use SCUs to adjust their annual pool average, trade SCUs with other suppliers, and bank SCUs for later use.
• Allows suppliers to transfer surplus SCUs they owned as of March 31, 2026 into the re‑enacted system.
• Changes some record‑keeping and reporting timing for the 2026 compliance year (shorter notice periods) and requires books and records to be kept in Canada until December 31, 2036.
• This is a proposal published in the Canada Gazette, Part I, and is not yet final; stakeholders have a 60‑day comment period before a final decision.

Who's affected#

• Primary suppliers of gasoline — namely refiners and importers — are the main regulated parties.
• Industry groups that represent those suppliers, including the Canadian Fuels Association and the Canadian Energy Marketers Association, have been consulted.
• Automotive and transportation sectors (vehicle makers and parts suppliers) may be indirectly affected; groups such as the Canadian Vehicle Manufacturers’ Association and Global Automakers of Canada have been engaged.
• Indigenous organizations and some nearby First Nations were consulted, including the Assembly of First Nations, Inuit Tapiriit Kanatami, and the Métis National Council.
• The general public could notice small regional effects on fuel availability or air quality, especially in areas served by refiners that rely on credits.

Why it matters#

• The proposal is meant to avoid sudden supply problems: without the trading system some refiners say they might need to cut production or take extra time and cost to meet the strict sulphur limits. That could reduce fuel availability in some regions.
• Using banked credits can let refiners keep producing during short‑term outages or while they finish equipment upgrades.
• There is a trade‑off: the trading system can lead to small increases in sulphur emissions and related air pollution for a limited time, according to the department’s analysis.
• The government says this is a temporary measure while it considers a permanent, consolidated fuel regulation and consults further.