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Hydro-Québec and Mitsubishi Motor Sales of Canada to launch Canada's largest all-electric vehicle pilot project in the fall of 2010

Today, Hydro-Québec and Mitsubishi Motor Sales of Canada Inc. (MMSCAN) announced the signature of a memorandum of understanding that will lead to the launch of Canada's largest all-electric vehicle pilot project this coming fall. In collaboration with the City of Boucherville, Hydro-Québec will test the performance of up to 50 Mitsubishi i-MiEVs, the vehicle which recently won the Japanese Car of the Year award for "Most Advanced Technology" at the Tokyo International Motor Show.

The project, which is evaluated at $4.5 million, aims to test the cars under a variety of road conditions, including those due to Québec's harsh winters and is designed to study the vehicles' charging behaviour, the driving experience and overall driver satisfaction. The project is the first of its kind to include the participation of a car manufacturer, a public utility, a municipality and local businesses that will integrate the vehicles into their existing fleets.

Thierry Vandal, Hydro-Québec's President and CEO declared "This new pilot project is part of our action plan for the electrification of vehicles [...] it will allow us to advance our knowledge of the technology and its integration into our grid, which in turn, will help us plan the necessary charging infrastructure for homes, offices and public places."

The City of Boucherville was selected as the project's host municipality given its proximity to Hydro-Québec's research institute (IREQ), its role in Hydro-Québec's upcoming interactive smart zone trial and the diversity of its local businesses. The availability of a local Mitsubishi dealership to oversee the i-MiEVs' maintenance was also part of the selection criteria.

i-MiEV, which stands for Mitsubishi Innovative Electric Vehicle, is an all-electric, highway-capable, charge-at-home commuter car. Because the battery, the motor and other items are mounted out of the way beneath the floor, the i-MiEV seats four adults and offers surprising interior room and cargo space. Other i-MiEV features include excellent low-speed acceleration and a very low centre of gravity, which contributes to superior handling and stability. Moreover, the i-MiEV is extremely quiet.

"We are very proud to be leading the way to a greener, more sustainable future by developing environment-friendly vehicles fuelled by clean, renewable energy," said Koji Soga, President and CEO of MMSCAN. "Mitsubishi is a leader in electric car development and the i-MiEV represents the pinnacle of our green technologies. In the same sense, Hydro-Québec and the City of Boucherville are demonstrating their environmental leadership by participating in this unique initiative."

The electric vehicle pilot project comes ahead of the government of Québec's soon to be released 2010-2015 Electric Vehicle Action Plan, announced in June 2009 and which is expected to include incentives to get electric vehicles on Québec's roadways, as well as for car and component manufacturers to establish themselves further in the province.

Québec applies California Standards to Light Vehicle GHG Emissions

On December 29, 2009, Ms. Line Beauchamp, Québec's Minister of Sustainable Development, Environment and Parks, announced that the Regulation respecting greenhouse gas emissions from motor vehicles, whose standards are equivalent to those in force in California, was to come into effect in mid-January 2010. Québec thus becomes the first Canadian province to apply North America's strictest automotive emissions standards and joins an ongoing North American movement that has seen some fifteen (15) American states, including a majority of the province's northeast neighbours, follow California's lead. The U.S. federal government has also announced its intention to adopt California-equivalent standards in 2012.

The Regulation applies to all cars and light trucks sold, leased or marketed in Québec from the 2010 model year onward and most notably sets out a table of gradually diminishing maximum GHG emissions standards for large volume manufacturer vehicles for model years 2009-2016. In addition, the Regulation establishes a system of credits and debits whereby beginning with the 2010 model year for large volume manufacturers and the 2016 model year for other manufacturers, a fee of $5,000 per vehicle equivalent is payable for any excess over the maximum emissions standards. All sums thereby obtained are paid into the province's Green Fund, established by section 15.1 of the Act respecting the Ministère du Développement durable, de l'Environnement et des Parcs.

At 40% of the province's total GHG emissions, of which nearly half are due to Light Vehicles, the transportation sector is Québec's most important emitter. The Regulation's coming into effect thus constitutes an important step towards realizing the goals of the province's 2006-2012 Climate Change Action Plan, and is a determinant factor in reaching its 2020 GHG emission reduction target as well.

It is expected that in addition to encouraging the large scale use of more energy efficient technologies in the transportation sector, such as electric or hybrid vehicles, the Regulation will foster a more rational use of non-renewable petroleum resources, thereby decreasing Québec's overall dependence on fossil fuels.

US EPA finalizes finding that GHGs threaten the public health and welfare

The United States Environmental Protection Agency ("EPA") released its long-awaited finding that greenhouse gases endanger public health and welfare. Specifically, the EPA found that "current and projected concentrations of the six key well-mixed greenhouse gases - carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6) - in the atmosphere threaten the public health and welfare of current and future generations." The decision does not impose immediate obligations on industry. However, it sets the stage for future EPA regulations and puts the pressure on Congress to finalize its climate change bill. It is also well-timed for the kick off of negotiations in Copenhagen.

The endangerment finding has been in the works for years. The EPA's finding was prompted by the US Supreme Court's 2007 decision in Massachusetts v. EPA in which the court held that the EPA had the authority to regulated GHGs under the Clean Air Act and that its decision not to regulate GHGs was, at the time, "arbitrary, capricious, or otherwise not in accordance with law." The EPA subsequently released a draft finding in April of 2009, which was open to public comment.

The endangerment finding cements the EPA's jurisdiction to regulate greenhouse gases. It was accompanied by a specific finding that "greenhouse gases from new motor vehicles and new motor vehicle engines contribute to the greenhouse gas pollution which threatens public health and welfare." This "cause or contribute" finding will allow the EPA to move forward with its proposed light duty vehicle emissions standards. Canadians can likely look forward to similar standard being enacted in Canada.

Perhaps most importantly, the endangerment finding gives new context to the efforts in Washington to enact climate change legislation. If Congress is unable to pass a cap-and-trade bill, the EPA may step in and regulate emissions more generally. Most stakeholders would prefer emissions regulation to come from Congress, which is able to balance competing interests, rather than from the EPA, which may take a less compromising approach.

CN unveils on-line GHG Emissions Calculator to allow customers to assess transportation carbon footprint

CN today unveiled an upgraded on-line greenhouse gas emissions (GHG) calculator that estimates total carbon emissions for shipments across multiple modes of transportation.
CN, recognized as the most fuel-efficient railway in North America, provides the free on-line GHG calculator to the general public on its website. Upon entering basic shipment point-to-point information, the tool generates carbon-emission estimates using a combination of vessel, rail and truck, such as containers moving internationally from Asia to North American destinations along CN's network or domestic shipments using a combination of rail and truck or a single mode of transportation.
The GHG calculator allows manufacturers, importers, exporters, shippers, wholesalers or retailers to assess the carbon footprint of their shipments using single or multiple modes of transportation. Use of the GHG calculator to estimate GHG emissions makes clear the environmental advantage of rail over truck, which has been shown to be up to six times more energy-efficient, because rail consumes a fraction of the fuel to transport one tonne of freight one kilometre. In fact, CN claims that it can move one tonne of freight 197 kilometres on just one litre of fuel. Certainly a convincing argument to invest in the North-American rail system!
In addition to being a powerful environmental conscience-raising initiative, dissemination and use of such tools once again demonstrates the growing competitive advantage that reducing one's carbon emissions represents.

Obama Sets a Shorter Timeline for Tailpipe Emissions

We have blogged a couple of times about proposed new standards for tailpipe emissions in Canada and the United States. Yesterday, President Obama's administration announced plans to put those standards into practice in 2016, four years earlier than originally expected. The program covers the 2012 model year through to the 2016 model year and, according to the White House website, "ultimately requires an average fuel economy standard of 35.5 mpg in 2016".

In his speech, the President asserted that the new standards would have a projected reduction in oil consumption of 1.8 billion barrels over the life of the program, "more oil than [the United States] imported last year from Saudi Arabia, Venezuela, Libya, and Nigeria combined". How much oil is this? In 2008 the U.S. imported 3,570,848 thousand barrels of crude oil. Of those barrels, the U.S. imported from a total of 42 different countries. The top 5 importing countries were: Canada (19.8%), Saudi Arabia (15.4%), Mexico (11.8%), Venezuela (10.6%), and Nigeria (9.4%) for a total of 67% of its imports. Of the countries mentioned by the President above, the United States imported about 0.7% of its oil from Libya in 2008. "[M]ore oil than the [United States] imported last year from Saudi Arabia, Venezuela, Libya and Nigeria combined" is equal to about 36.1% of U.S. yearly imports.

What does this mean for Canada? Environment Canada previously announced new emissions standards for Canada. Minister Prentice has said"what we're striving for is a North American standard because we know there's only one North American automobile industry". Today, the Minister confirmed that the Canadian government will match the new standards. According to the Globe and Mail, "Michael Martin, Canada's lead negotiator on international climate change talks, said the new auto standards will be one part of a 'suite of policies' that Canada will be adopting before" Copenhagen in December. This is further evidence of Canada's commitment to address climate change in North America.

We will be carefully monitoring what other policies are in that suite...

Has Ontario killed the electric car?

On March 21, Ontario enacted amendments to regulations regarding the use of low speed electric vehicles ("LSEV") on the province's roads and highways. As reported by the CBC, the new rules are too strict for key players in the industry.

Catherine Scrimgeor of Toronto-based ZENN Motors is quoted as saying, "the ZENN [electric car] as it exists right now - the ZENN car that we sell in Quebec and the United States - will not be marketed in Ontario." ZENN, which stands for "zero emission no noise", is one of the province's most vocal proponents of LSEVs.

The new regulations are part of a pilot project of the Ministry of Transportation (Ontario). In enacting the regulations, the Ministry attempted to balance the benefits of getting LSEVs on the road with the risks that their drivers would face when surrounded by conventional vehicles. The regulations were developed in part with reference to a study of the issue prepared by the National Research Council Canada.

O. Reg. 449/06 Pilot Projects - Low-Speed Vehicles and R.R.O. 1990, Regulation 611, Safety Inspections (applies in part to LSEVs), which are both regulations under the Highway Traffic Act, are available online.

Tailpipe Emissions and Other Important Messages

Minister Prentice announced on April 1 that Canada would be implementing new "tailpipe" emissions standards for vehicles built in the 2011 model year. The announcement confirmed Canada's intention to address climate change domestically and signalled its commitment to work in concert with the United States on reductions of greenhouse gases continentally.

The current CAFE (Corporate Average Fuel Economy) standard for cars is 27.5 miles per gallon. Changes to the American standards would raise the fuel economy for cars to 30.2 miles per gallon for the 2011 model year and 24.1 miles per gallon for trucks, for an average standard of 27.3 mpg. These standards are a first step to address vehicle emissions in the United States. The goal will be a combined standard of 35 mpg by 2020.

Canada does not require automakers to adhere to these standards - rather Canadian manufacturers and importers are guided by a voluntary standard which is closely aligned with CAFE. Wednesday's announcement means that the emissions standard will no longer be voluntary, but regulated. Minister Prentice remarked:

"The new U.S. fuel economy standards will have an impact across the North American automotive industry - especially Canada. We don't trade vehicles with the Americans so much as we build vehicles together. In this relationship, Canada punches way above its weight. We produce between 15 and 20 percent of North America's vehicles. Approximately 80% of new vehicles manufactured in our country are exported to the U.S."

Minister Prentice confirmed that Canada's mandatory standards to reduce carbon dioxide emissions are going to be "consistent with the national fuel economy standards set by our largest trading partner". On-going alignment with U.S. standards will be ensured.

Messages

In addition further demonstrating the Canada plans to work with the United States to address climate change, there are two important messages in the announcement.

Firstly, the development of vehicle emissions standards for the 2011 model year is one of the many components found in the Conservative government's Turning the Corner action plan to address climate change. This announcement signals the federal government's intention to implement Turning the Corner.

Secondly, the tool being employed to manage auto emissions is the Canadian Environmental Protection Act, 1999 (CEPA) and not new legislation. CEPA is a federal statute which provides, among other things, the authority for the government to introduce regulations to govern vehicle emissions. Section 160(1)(a) of CEPA specifically provides that the Governor in Council may, on the recommendation of the Minister, make regulations respecting emissions and prescribing standards in relation to emissions. CEPA is a broad environmental statute, which has, as Minister Prentice observed, the "flexibility that will let us harmonize with the broad range of possible future actions from the U.S. government".

Does this mean that other federal climate change initiatives found in Turning the Corner will also be addressed using CEPA? In his concluding remarks, Minister Prentice referred to further Canadian action on climate change: "In the coming months, you will also see us move decisively on the other major contributors - including electricity generation, and industrial production, including oil and gas".

Stay tuned.

Canada Steering to Achieve Reduced Emissions from Vehicles

Canada's Environment Minister, Jim Prentice, announced today that the government will introduce new regulations to limit greenhouse gas emissions from the automotive sector. The new regulations, which will be introduced under the Canadian Environmental Protection Act, 1999 are in keeping with the government's commitment to tougher standards for vehicles in the 2011 model year and beyond.

Given the Minister's remarks that Canada and the United States must co-operate to address climate change, the move to tougher emissions standards comes as no surprise. The American President directed his Department of Transportation to issue new fuel efficiency standards in January of this year and last week unveiled the new standard of 27.3mpg for the 2011 model year.

Final Canadian regulations are expected to come into force in 2010.

CO2 emissions regulation is part of the Canadian Government's effort to address climate change and its commitment to total GHG reductions of 20% from 2006 levels by 2020. Together with the Clean Energy Dialogue Canada has with the United States and the Major Economies Forum on Energy and Climate, of which Canada is a participant, addressing greenhouse gas emissions is high on the Environment Minister's priority list. As the writer blogged back at the start of the year all roads lead to Copenhagen in December.

Canadian Climate Change Themes

The Clean Energy Dialogue between Canada and the United States was sparked in February after the Prime Minister met with President Obama. The President's Climate Change advisor, Carole Browner, met with the Minister of Environment to discuss Canada's approach to climate change during those meetings. A couple of weeks later, Canadian Ministers, including the Minister of Environment, traveled to Washington to meet with their American Counterparts. Since then, Jim Prentice has been busy speaking about Canada's response to climate change. A number of themes are emerging from the Minister's remarks:

1. Environment Policies are Instruments of Economic Renewal and Security : The Minister confirmed in a speech to the Institute of Corporate Directors on March 6, that Canada's environmental approach is to "make our national environmental policies positive instruments of economic renew and of national development". Environment policy and energy policy are inexorably linked. Canada has a history of environmental stewardship and has a responsibility to maintain that what at the same time creating wealth and building industry. Maintaining environmental integrity while enhancing our North American energy security is going to be a priority for the Federal government. We will start to see more overlap between Energy policy and Environmental policy.

2. Canada/U.S. Co-operation on Climate Change: This is no surprise. Since the President's visit in February, both the Prime Minister and the Environment Minister have said that Canada and the U.S. need to work together closely to address climate change. Minister Prentice has confirmed that Canada and the U.S. must work closely to build a new carbon economy and to ensure that "our policy and regulatory frameworks are coherent and supportive" and has called the relationship with the United States crucial in the context of the transformation to clean energy. There are a number of subthemes:

(a) Cap and trade: In a speech on February 27, Minister Prentice confirmed that Canada has committed to pursue a North-America-wide cap and trade system and that we will "work closely with the new U.S. administration to build the North American low-carbon economy". He is optimistic that Canada and the United States will arrive at a workable solution that defines "common or similar carbon reduction targets, that creates similar mechanisms to allocation emissions and...provides for the trading of credits on a North American basis".

(b) Fuel efficiency: Minister Prentice told the CBC on March 1 that Canada is prepared to go in the same direction as the United States and that he supports one fuel efficiency standard for the two countries.

(c) New technologies: The Minister remarked that Canada and the United States have a strong and shared interest in promoting the development and deployment of clean energy technologies. The Clean Energy Dialogue will include discussions about Carbon Capture and Storage, an interconnected electricity grid, nuclear energy, wind, solar, hydro and other "more remote renewable sources of energy". Canada's action plan has Canada "on course to reduce domestic greenhouse gas emissions by 20% by 2020 and by 60 to 70% by 2050". In order to achieve these goals, Canada must invest in new technologies.

3. Canada Must be a Leader : Canada is one of the top ten energy consumers in the world. Our challenge is to "stand among the world's elite as a clean energy superpower" and to demonstrate that Canada is a user of clean energy. The Minister told his March 6 audience that the government is "committed to ensure that Canada is actively and constructively engaged in the [Clean Energy Dialogue]" and that it "intends to be a leader and a responsible partner in defining the way forward".

4. International Agreement : both the United States and Canada seem to be setting their sights on Copenhagen in December and both countries believe that in order for climate change policies to be effective domestically, international co-operation is required. Canada's climate change policy is "based on a clear desire to include all of the major emitters in the world". Major emitters would include China and India and other developing nations.

5. Climate Change is Everyone's Responsibility : Although the impetus for climate change has to come from government with active participation and engagement of industry, the responsibility extends to all citizens "from all walks of life". Canada's climate change strategy will involve "how we consume and conserve energy in our homes and in our offices". In his February 27 speech, Minister Prentice remarked:

Thirty years ago, drunk driving was tolerable. It's not anymore. Twenty years ago, it was acceptable to drive without a seatbelt. It's not anymore. Up until a few years ago, Canadians could smoke anywhere in public. They can't anymore. Attitudes shifted. Behaviours changed. The same needs to happen with the environment.

Watch for these themes to start emerging in other departments of the federal government. Climate change is one of the most important issues facing governments today. We'll keep you posted on new developments in Canada. Stay tuned.

Recent Canadian climate change developments

Submitted by Andrew Lord.

Deloitte released a survey entitled "Managing greenhouse gas emissions: Mitigating risks and uncovering opportunities" (PDF) which considers how Canadian companies perceive and are reacting to the climate change issue in Canada. The report notes that climate change issues are "no longer just for the activists" and are "quickly becoming critical factors for corporate strategy and business competition." Shareholders, both individual and institutional, are increasingly pushing their boards to act on climate change issues. However, the survey found that greenhouse gas management continues to be treated by most corporations as an environmental compliance problem and not as a strategic business opportunity. Respondents cited regulatory uncertainty as the primary barrier to the development of integrated greenhouse gas management programs. The more quickly governments, both domestic and foreign, can eliminate that uncertainty, the more quickly corporate leaders will be able to make climate change a strategic priority rather than a regulatory headache.

Canadian Environment Minister John Baird announced during the UN Climate Change Conference in Bali that Canadian companies must submit their 2006 greenhouse gas emissions data to Environment Canada by May 31, 2008. The data will be used to help implement the Conservatives' climate change plan which aims to reduce emissions by 20% by 2020. Establishing a reliable and complete greenhouse gas inventory is a necessary first step in tracking the effectiveness of Canada's climate change plan. However the plan, which Baird touted as "the toughest plan in Canadian history to clean up our air, tackle climate change, and protect our environment," has been heavily criticized by the opposition parties, NGOs and other world leaders. The 20% figure is measured against 2006 emissions levels, whereas the global standard benchmark is 1990 emissions. Canada's target is therefore much less than the 25-40% reduction that the IPCC recently identified as the minimum level of reductions needed to avoid global warming in excess of 2 degree Celsius. Furthermore, the government proposes to advance its goals in the near term by setting emissions intensity targets. Intensity targets, which cap the level of emissions permitted per unit of industrial production, will not necessarily reduce overall reductions if industrial production continues to growth.

Quebec Environment Minister Line Beauchamp announced that Quebec will adopt California's vehicle emissions standards. BC and Manitoba have also committed to adopt the stringent California standards, which are also being implemented by about 16 U.S. states. Harper and Bush both reject calls for their respective federal governments to follow suit.