Canada Announces Final Electricity Vehicle Availability Standard
Today, the Honourable Steven Guilbeault, Minister of Environment and Climate Change, announced Canada’s finalized Electric Vehicle Availability Standard (the Standard), which is intended to increase the supply of clean, zero-emission vehicles available to Canadians across the country.
The Standard aims to ensure that Canada achieves a national target of 100 percent zero-emission vehicle sales by 2035. The Standard also includes interim targets of at least 20 percent of all sales by 2026, and at least 60 percent by 2030. The following graphic demonstrates the annual increases of the Electric Vehicle Availability Standard requirements.
In 2022, the Government of Canada released its 2030 Emission Reduction Plan which aims to achieve at least a 40 percent reduction in emissions below 2005 levels by 2030. Approximately half of Canada’s greenhouse gas emissions in the transportation sector come from light-duty vehicles, such as passenger cars, SUVs, and light trucks. The newly announced Standard has been positioned by the Government as playing an essential role in reducing Canada’s emissions.
The full text of the final regulations and the Regulatory Impact Analysis Statement (RIAS) will be published in Canada Gazette II on December 20th.
Compliance
To provide flexibility as manufacturers transition their inventories to meet the ZEV targets, the regulations include a credit system. The main structure has not changed from the proposed regulations: companies that perform better than that year’s ZEV target generate credits which they can bank for up to five model years or trade. Companies that do not meet their targets generate a deficit, which must be discharged within three model years. No accumulated or banked credits can be used to offset a deficit in model year 2035 and beyond.To address a credit deficit, companies will have two possible mechanisms. The first is to purchase credits from companies with a surplus. The second is to invest in fast-charging infrastructure.Companies may generate one credit for each $20,000 invested in new fast-charging infrastructure projects that meet certain conditions, including:
- Projects must install new DC fast-charging stations.
- All stations must have a rated power of at least 150 kW.
- Stations must be operable for at least five years after installation.
- All stations must be available to any ZEV with a compatible charging port (or compatible adapter).
- Stations must be opened between January 1, 2024, and December 31, 2027.
There is also an early action credit (EAC) system, which awards credits to companies which already exceed EV targets of 8% in 2024 and 13% in 2025. The combined value of EACs and compliance units from investments in charging infrastructure cannot exceed ten percent of a company’s ZEV target in any year.
Stakeholder Engagement
The government initially introduced its proposed regulation for zero-emission vehicle sales targets in December 2021. During the two-year consultation period that followed, the Government of Canada worked with stakeholders to develop the phased-in approach found in the regulation.Stakeholders also informed the Government’s approach to flexibility provisions needed for manufacturers and other stakeholders to incentivize the early deployment of zero-emission vehicles and to ease the transition into the regulated targets that begin in 2026. This resulted in Early Action Credits and the approach to fast-charging investments.
Next Steps
The Electric Vehicle Availability Standard comes into effect for the model year 2026. The full text of the regulation and the regulatory impact analysis statements (RIAS) is expected to be released in the Canada Gazette, Part II on December 20, 2023.
