Reduce VOCs from Petroleum Storage and Loading

Summary#

The federal government published a proposed rule called Reduction in the Release of Volatile Organic Compounds (Storage and Loading of Volatile Petroleum Liquids) Regulations on February 24, 2024. Sponsored by the Department of the Environment and the Department of Health, it would require vapour-control equipment, inspections and reporting at many petroleum storage tanks and loading racks to cut smog-forming gases and carcinogens like benzene. The departments estimate reductions of about 494 kilotonnes (kt) of VOCs and 8 kt of methane over 2024–2045, with estimated net benefits of $337 million (benefits $1.43 billion minus costs $1.09 billion).

What it does#

• Requires facilities that store or load volatile petroleum liquids to install emissions-control equipment such as:
  • vapour control systems,
  • internal or external floating roofs,
  • pressure‑vacuum vents (depending on tank size and product).
• Sets inspection and repair rules, for example:
  • monthly visual checks for many floating‑roof tanks,
  • annual tests and more frequent checks where risks are higher,
  • fast repair windows for some vapour‑system defects (e.g., 15 days for many vapour‑system defects; up to 45 days for floating‑roof repairs, with possible extensions in special cases).
• Adds record‑keeping and reporting duties (records generally kept for 6 years).
• Uses a phased approach:
  • new tanks and racks must meet rules immediately when they enter service;
  • most existing equipment would be brought into compliance over a staged period (some timelines as short as 1–3 years for higher‑risk or high‑benzene sources, and up to 7 years for large retrofit programs).
• Defines which sites and equipment are in scope, with thresholds such as tanks of about 100 m3 internal volume or loading above 500,000 standard litres per day (roughly 25 million standard litres per year) — smaller or remote sites may be exempt under set conditions.
• Allows a permitting route in limited cases (for example, to use an internal floating roof instead of a vapour control system for certain older, distant high‑benzene tanks if monitoring shows low benzene at the fence line).

Who's affected#

• The main industry targets are terminals, refineries, upgraders, petrochemical plants and bulk plants that store or load volatile petroleum liquids. The government estimated about 243 facilities in scope.
• Transport and logistics services that load/unload by truck, rail or marine will be affected by vapour‑control requirements at loading racks.
• Local communities near these facilities — including some Indigenous communities that raised concerns in consultations (for example, the Aamjiwnaang First Nation, Tsleil‑Waututh Nation and groups represented by Inuit Tapiriit Kanatami) — could see the biggest local benefits from lower benzene and smog precursors.
• Most small businesses are not expected to be affected; the government estimates 3 small businesses may fall under the rules as proposed.
• Facilities already covered by other federal upstream methane rules, or by provincial/municipal measures, may see overlap or harmonization depending on local rules.

Why it matters#

• Health: VOCs help form ground‑level ozone and fine particulate matter (PM2.5). The departments estimate the proposed rules would prevent about 150 premature deaths and reduce 31,000 days of asthma symptoms (ages 5–19) and 91,000 days of restricted activity across 2024–2045. Monetized health gains are estimated at $1.05 billion.
• Cancer risk: Benzene is a known human carcinogen. The rules target benzene sources in storage and loading operations to reduce local inhalation exposure, which is a particular concern in some communities that have measured elevated benzene levels.
• Environment and climate: Estimated environmental benefits are $14.2 million and methane reductions produce climate benefits estimated at $24.3 million over the analysis period.
• Costs and product recovery: Industry compliance costs are concentrated early (capital costs estimated at $828 million, operating costs about $247 million) but the rules also recover product vapours valued at about $343 million over the period. Total estimated costs to all parties are $1.09 billion.
• Net impact and next steps: The departments estimate overall net benefits of $337 million over 2024–2045. This is a proposal (not yet law). Interested parties can comment — the notice allows 60 days for submissions after publication.