Ban on Heavy Fuel Oil in Polar Waters

Summary#

This is a proposed rule from Transport Canada to update the Vessel Pollution and Dangerous Chemicals Regulations (Part 2, Division 1 — Oil) so Canada’s law matches international limits on heavy fuel oil (HFO) in polar waters under MARPOL. It would ban the use and carriage for use of HFO as fuel in Arctic and Antarctic waters, and add related penalties in the Administrative Monetary Penalties and Notices (CSA 2001) Regulations. The government estimates a present-value cost to vessel operators of $10.4 million and a monetized benefit from lower greenhouse gases of $4.3 million over a 10-year period.

What it does#

• Implements the MARPOL bans on HFO:
  • Prohibits use and carriage for use of HFO as fuel in Arctic and Antarctic waters for Canadian-flagged vessels wherever they operate and for foreign-flagged vessels in Canadian Arctic waters.
• Keeps some time-limited exceptions:
  • Emergency operations and vessels dedicated to oil-spill response are exempt.
  • A temporary waiver for Canadian marine resupply vessels ends on July 1, 2026.
  • An automatic exception for vessels with protected fuel tanks lasts until July 1, 2029.
• Cleans up old text in the Vessel Pollution and Dangerous Chemicals Regulations (VPDCR) (removes obsolete transition dates).
• Adds four enforceable violations to the Administrative Monetary Penalties and Notices (CSA 2001) Regulations with penalties ranging from $1,250 to $25,000 per violation.
• This is a proposal (Part I notice). The Canada Gazette notice invites comments within 60 days of publication (publication: June 20, 2026). The proposed regulations would come into force on the day they are published in Canada Gazette, Part II.

Who's affected#

• Authorized representatives (owners/operators) of 25 Canadian vessels that operate in Arctic waters:
  • 8 tankers, 16 cargo vessels, and 1 bulk carrier.
• Foreign vessels operating in Canadian Arctic waters (the ban applies to them while in Canadian jurisdiction).
• Northern and Indigenous communities that rely on marine resupply — the analysis covers roughly 16,186 households in affected communities.
• Mining operators that use bulk carriers; the analysis mentions 7 mines that could be indirectly affected.
• Transport Canada inspectors and enforcement staff (they would use existing inspection and penalty tools).

Note: many affected vessel types (for example, tankers, cruise ships and icebreakers) already use compliant fuels, according to the regulator, so not all operators will face new fuel costs.

Why it matters#

• Environmental protection: HFO is thick, sticks to ice and shorelines, and is much harder to clean after a spill. Banning HFO in polar waters reduces the chance of long-lasting damage to sea life and coastal ecosystems.
• Health and local livelihoods: Cleaner fuels mean less sulphur and particulate pollution from ships, which can improve air quality and reduce health risks for Arctic communities that depend on the ocean for food and jobs.
• Financial trade-offs:
  • Transport Canada estimates additional fuel costs to affected vessel operators of $10.4 million (present value, 2027–2036) and monetized GHG benefits of $4.3 million, for a net monetized cost of $6.1 million over that period.
  • If vessel operators passed all added costs to consumers, the analysis estimates an average increase of about $560 per household over the analysis period (about $61 per year).
  • Avoiding even a single large HFO spill in Arctic conditions could save many times the regulatory cost in cleanup and socio‑economic damages, based on the department’s illustrative figures.
• International obligations and enforcement: Adopting these rules brings Canada’s domestic law into line with its international commitments under the International Maritime Organization (IMO) and MARPOL, and creates clear penalties to help enforce the ban.

If you want to comment on the proposal, the Canada Gazette notice opened a 60‑day comment period after publication (notice published June 20, 2026).