U.S. emissions changes shift the need for an EV mandate in Canada
I have a dog, like many of you do.
Fortunately my dog is not one of those that loves to bark at and chase after cars. Nobody really knows why they do it —other than instinct — but what would they do if they actually caught the car?
The dog catching the car has come to epitomize those of us who have set big goals and finally achieved them and then we are left not knowing what to do with ourselves, because so much of our purpose and energy and satisfaction was derived from chasing the goal — not actually achieving it.
I think in many ways, the advocacy efforts of those pushing all levels of government to pursue Zero Emission Vehicle mandates — a subject of ongoing consultation currently with our federal government — have become like the dogs who have caught the car.
The federal government launched its consultation on its draft zero emission vehicle mandate regulation on December 21st, a Christmas gift delivered to the automotive industry not by the Minister — despite taking every opportunity to highlight how important a ZEV mandate is, but rather by his Parliamentary Secretary, Julie Dabrusin.
In the intervening period between December 21st when the consultation was initially launched to the end of April, a lot has changed in the ZEV space. Perhaps the most important change to the ZEV regulatory environment since the federal government’s announcement of its draft ZEV regulation just before Christmas was the April 12th announcement in the U.S. of the proposed Multi-Pollutant Emission Standards for Model Years 2027 and Later Light-Duty and Medium-Duty Vehicles.
This is a long title for a new regulation that would, amongst other things if adopted, increase the level of sales of ZEVs to 67 per cent by 2032 — the last applicable year of the rule making.
However, some of you might be asking: “Why does it matter what the U.S. is proposing to do with its emission standards?” It is a good question.
The proposed U.S. standards are important to Canada and Canadians because the Canadian government had previously reaffirmed its commitment to harmonize its emission standards with the leading jurisdiction in the United States. This has been Canada’s official stance and position with respect to both safety and emission standards for years, and this position makes perfect sense given that the automotive industry operates in an integrated North American market at least as far as vehicle manufacturing is concerned.
About 85 per cent of all of the light duty vehicles built in Canada are exported to the United States and, thus, have to be compliant with whatever safety and emissions standards are in effect there.
Canada also imports about 85 per cent of the vehicles sold here — and most of those imports are from the United States, so it makes sense that our regulations would be aligned. In the case of the current GHG emissions regulations, the U.S. regulations are actually incorporated by reference into our standards.
This proposed U.S. GHG regulation is important for Canada for a number of reasons but the two most important reasons in my mind are that it is a performance-based standard, which is maybe a fancy way of saying that it is “technology neutral” and lets the vehicle manufacturers figure out what technologies to deploy, when, to best meet the increasingly stringent GHG targets over that six year period from 2027-2032.
Something the industry seems to have been unable to impress upon our federal government is the principle that if you focus on targeting emissions reductions, you will necessarily get ZEV deployment; because, the more stringent the GHG target the more likely it is that the only compliance pathway will be ZEVs.
The key, however, is (or should be from our perspective) that emissions reductions are secured.
This same outcome is NOT guaranteed when governments focus on technology deployment — electric vehicles in the case of Canada’s ZEV mandate. It is entirely possible that you can have stringent ZEV targets under a mandate while still seeing increased emissions from the light duty vehicle sector.
Quebec is a great example.
Quebec was the first jurisdiction in Canada to implement a ZEV mandate in 2018, but the GHG emissions in Quebec in 2021 were the same as they were in 2016 according to the recently released federal National Inventory Report, from Environment and Climate Change Canada. So, a ZEV mandate does not guarantee emissions reductions.
The second reason why the U.S. regulation is so important is that, while it has no ZEV mandate, it will still achieve a better deployment of zero emission vehicle sales than Canada will with its ZEV mandate.
In Canada, the target for ZEV sales under the proposed ZEV mandate is 60 per cent by 2030, and under the proposed U.S. rule the U.S. would also achieve 60 per cent ZEV sales by 2030, but these sales would be true zero emission vehicles i.e. battery electric vehicles, as opposed to the Canadian definition of ZEV which includes plug-in hybrid electric vehicles (PHEVs).
Therefore, if Canada can achieve better emissions reductions and better ZEV deployment by 2030 simply by applying our proven approach of adopting U.S. emission standards, one has to ask what the relevance is of a redundant ZEV mandate in Canada? At best it is belt-and-suspenders regulation, at worst it is a duplicative and unnecessary regulation that will distort the Canadian marketplace while both limiting the availability of vehicles in Canada and making those that are available more expensive.
Yet even knowing this the ZEV mandate advocates invoke the “yeah but” clause. The rationale seems to go like this: “Yeah, we’ll get more ZEVs following the U.S. rule, but a new administration could change those rules so we need to keep our ZEV mandate”.
Look, anything can happen with any new administration in the U.S. but it would be refreshing to see ZEV advocates, which are mostly Environmental Non-Government Organizations (ENGOs) admit that a ZEV mandate is no longer necessary rather than being like the dog that caught the car — I got my goal, now what do I do?
