Low carbon fuel standard (LCFS) compliance modelling

ESMIA conducted a comprehensive modelling study to evaluate future stringency targets for British Columbia’s Low Carbon Fuel Standard (LCFS) through 2050, assessing implications for fuel supply, compliance costs, greenhouse gas emissions, and the broader economy. Using the NATEM model, ESMIA represented the various LCFS policy mechanisms, evaluated carbon intensity (CI) reduction targets for gasoline, diesel, and jet fuel, and expanded the analysis to include emerging fuel categories such as marine fuels.

Working closely with the Low Carbon Fuels Branch (LCFB), ESMIA adapted the model to reflect British Columbia’s fuel and credit markets and developed a range of policy scenarios exploring different levels of LCFS stringency and scope. The analysis examined fuel supply by commodity and process (biofuels, hydrogen, electricity, oil products), fuel demand by end-use segment along with vehicle technology adoption, fuel and feedstock trade, compliance pathways, credit and fuel prices, emission reductions, and economic impacts. Sensitivity analyses were also conducted to assess the effects of key market uncertainties on future outcomes.

The final report provided the Ministry with robust and comprehensive quantitative evidence on the low carbon fuel supply, end-use demand, compliance costs, and market implications of alternative LCFS pathways, supporting future policy development and the achievement of provincial greenhouse gas reduction objectives.