Decarbonizing Transportation

Location: National

Key Messages:

Rail:

  • The 2030 Emissions Reduction Plan committed the Government of Canada to develop Climate Action Plans for the aviation, marine, and rail sectors. These modal action plans aim to establish pathways to 2050 by identifying concrete measures and actions required to transition the sectors to enable a more sustainable future. 
  • The department is working with the Railway Association of Canada to renew the Memorandum of Understanding (MOU) for the 2023-2030 period, targeting ministerial signature for Fall 2023 in advance of the Emissions Reduction Plan’s 2023 Progress Report. The MOU will be a key instrument in aligning government and industry efforts to advance the sector’s transition to a more sustainable future.
  • The department is working with key stakeholders to develop the Rail Climate Action Plan, which will include emissions reduction targets for 2030 and lay the foundation for the sector to be net-zero by 2050.
  • Recognizing that urgent action at all levels and in all sectors is needed to address climate change and reach net-zero emissions by 2050, we welcome opportunities for collaboration on research and innovation efforts that could support commitments in a renewed MOU and the Rail Climate Action Plan.

International Shipping:

  • We need strong global action now in the marine sector to put the sector on a path to net-zero. Canada is taking steps to implement the short-term measures under the 2023 initial International Maritime Organization (IMO) GHG Strategy and the Clydebank Declaration domestically.
  • Canada is pleased with the approval of the 2023 IMO Greenhouse Gas Strategy at the 80th Marine Environment Protection Committee meeting (MEPC 80) in July 2023. The emissions reduction interim target for 2030 is a reduction of 20% striving for a 30% decrease and for 2040, the target is a 70%, striving for 80% of global GHG emissions in order to meet zero emissions by or around 2050. These targets are the most ambitious GHG emissions reductions ever agreed to in the United Nations system. 
  • Canada looks forward to being an ambitious and constructive participant in work on the further development of tools to allow the implementation of the mid-term measures agreed upon in the new Strategy.  In this regard, Canada supports a clean fuel standard and a per-tonne price on climate pollution for the international shipping sector.
  • In November 2022, we published the Canadian Green Shipping Corridors Framework to guide and empower people and organizations to work together to establish green shipping corridors. We have also committed to developing an action plan to reduce emissions from the marine transportation sector within Canada.
  • As several green shipping corridors are being announced, we encourage the signatories of the Clydebank Declaration to continue to work together towards the goal of establishing at least 6 green shipping corridors by 2030.
  • At COP27, Canada and the United States announced a Green Shipping Corridors Network Initiative in the Great Lakes – St. Lawrence Seaway System. Through this initiative, Canada and the United States are working with industry to help facilitate the establishment of green corridors throughout the region.
  • This initiative builds on our broader joint commitments with the U.S. under the Joint Statement on the Nexus between Transportation and Climate Change to support the development of green transport infrastructure along the border and advance cleaner, sustainable and renewable fuels for shipping.
  • To support the establishment of Green Shipping Corridors in Canada, Budget 2023 announced $165.4 million over seven years starting in 2023-24 for a new Green Shipping Corridor Program to help launch the next generation of clean ships, invest in shore power technology, and prioritize low-emission and low-noise vessels at ports.

Aviation:

  • Canada is pleased with the outcome of the recent International Civil Aviation Organization (ICAO) Assembly on the Long-Term Aspirational Goal (LTAG) and Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
  • Canada is looking forward to negotiating an ambitious outcome at the upcoming conference on aviation alternative fuels this November.
  • Canada released its Aviation Climate Action Plan on September 27, 2022 at the ICAO General Assembly. The Action Plan sets a net-zero emissions by 2050 vision for Canadian aviation and includes an ambitious goal of 10% sustainable aviation fuel (SAF) use by 2030.  
  • While we are implementing the 2022 Action Plan, we are also engaging with governments at all levels, industry, Indigenous groups, non-government organizations, and academia, to develop a 2024 action plan which will focus on setting a 2030 emission reduction target and on driving down emissions from the entire aviation eco-system, including airplanes, air navigation services and airport operations. This work will include the development of a SAF Blueprint that will outline how to ensure Canada has sufficient availability of SAF to meet the ambitious 10% use goal.

Zero Emission Vehicles:

  • In Canada, the transportation sector is the second largest source of greenhouse gas (GHG) emissions and represents a 22% of Canada’s total (150 Mts in 2021).
    • Most of these emissions (over 84%) are attributed to surface transportation modes (including light-duty vehicles, freight trucking, and rail).
  • Through the Emissions Reduction Plan (ERP), Canada committed to reducing on-road emissions with a suite of measures to accelerate the transition towards zero-emission vehicles. This includes:
    • Developing a light-duty zero-emission vehicle (ZEV) sales mandate to ensure that 100% of light-duty vehicle sales are ZEVs by 2035. Environment and Climate Change Canada released proposed regulations on December 31, 2022, through Canada Gazette Part 1.
    • Developing a medium- and heavy-duty zero-emission vehicle sales mandate to ensure that 100% of medium- and heavy-duty vehicle sales are ZEVs by 2040 for a subset of vehicle types based on feasibility.
    • Extending and expanding Canada’s Incentives for Zero-Emission Vehicles (iZEV) Program which is making it more affordable for Canadians to purchase or lease qualifying zero-emission light-duty vehicles.
    • Developing a purchase/lease incentive program for medium and heavy-duty ZEVs (the program was launched on July 11, 2022).
    • Additional investments in federal programming to support ZEV infrastructure, awareness, and zero-emission public transit.
  • Canada’s Action Plan for Clean On-Road transportation was announced on December 21, 2022. The plan outlines the coordinated federal actions to taken to date to support the decarbonization of Canada’s on-road transportation sector.

Summary of Issue / Background:

Rail 

  • Canada is committed to developing the Rail Climate Action Plan to decarbonize the rail sector in line with Canada’s net-zero 2050 goal, which could include efforts to advance zero-emission locomotives and locomotive electrification.
  • Canada is also collaborating with the Railway Association of Canada (RAC) through a Memorandum of Understanding to advance decarbonization efforts for Canada’s rail sector. The MOU, which expired in December 2022, provides a framework for addressing rail-related GHG and criteria air contaminant (CAC) emissions. Renewing the MOU presents an opportunity to further explore additional actions to decarbonize Canada’s rail sector to reflect an increased level of ambition in line with Canada’s climate commitments.

International Shipping 

  • Following nearly two years of negotiations, the Marine Environment Protection Committee (MEPC 80) adopted the 2023 International Maritime Organization (IMO) Greenhouse Gas Strategy in July 2023. The new Strategy commits the Organization to achieving net-zero emissions from international shipping by or around 2050 and identifies ‘indicative checkpoints’ on a pathway to this objective, including 20% below 2008 levels by 2030 (striving for 30%) and 70% below 2008 levels by 2040 (striving for 80%). The Strategy also contains a ‘fuel uptake goal’ to power global shipping with at least 5% zero- and near-zero emissions fuels by 2030 (striving for 10%). These targets take into account the full life cycle of GHG emissions from international shipping, “from well to wake.”
  • To operationalize the new 2023 Strategy, the IMO will develop, by 2025, ‘mid-term measures’ delivering on the reduction targets, including a marine fuel standard and a GHG pricing mechanism. As part of the policy development process, the candidate measures will undergo a ‘comprehensive impact assessment’ to model the potential emissions outcomes and economic impacts of measures with different levels of stringency.
  • In June 2021, the IMO agreed on a new short-term technical and operational measure to come into force on January 1, 2023. Combined with existing measures, this aims to deliver the Initial IMO GHG Strategy’s goal of at least a 40% reduction in CO2 emissions intensity by 2030. Following the reduction of the revised Strategy in July 2023, the short-term measures will undergo a review that will be completed by the end of 2025.
  • Canada is a party to the Clydebank Declaration, which was signed on the margins of COP26 in November 2021. This declaration calls on signatories to support the development of green shipping corridors, or zero-emission maritime routes between two (or more) ports, as a means to decarbonize certain high frequency shipping routes, with a goal of establishing at least 6 green shipping corridors by 2030. Canada is currently exploring a number of possible candidate routes, including close collaboration with U.S. officials on key binational routes in the Great Lakes/St. Lawrence Seaway and on the Pacific coast. 
  • Canada published the Green Shipping Corridors Framework in 2022 to guide stakeholders in advancing the development of these corridors by setting out principles, best practices, and roles Canada can play in support of the sector.
  • To further support the establishment of green shipping corridors, Budget 2023 announced $165.4 million over seven years starting in 2023-24 for a new Green Shipping Corridor Program. This program is currently under development; it is expected to include a stream focused on developing and testing the next generation of zero-emission vessel propulsion technology and a stream focused on equipping Canadian ports to support corridors through onshore technology (eg. zero-emission port equipment) and incentive programs for clean vessels.
  • Canada’s 2030 Emissions Reduction Plan commits Canada to the development of a Marine Climate Action Plan to reduce emissions from the marine sector within Canada. The Marine Climate Action Plan will both explore the pathways to decarbonize vessels, and investigate the onshore solutions needed to reduce emissions from marine transportation. In May 2023, Transport Canada collected initial feedback from stakeholders on the development of the Marine Climate Action Plan. 

International Aviation:

  • International Civil Aviation Organization’s (ICAO) work on decarbonization focuses on a basket of measures including a combination of technological and operational improvements, the incorporation of sustainable aviation fuel (SAF), and out-of-sector carbon offsetting. CORSIA was agreed in 2016 to address residual emissions to deliver carbon-neutral growth of international aviation from 2020.
  • At the recent 41st Assembly, ICAO member states agreed to a long-term aspirational goal of net-zero by 2050. While much work remains to ensure that the sector sets itself on a path to achieving the goal, the direction is now set, and the Assembly resolution sets up the building blocks. These building blocks include approaches to financing, training and capacity building, in particular through Capacity-building and Training for Sustainable Aviation Fuels (ICAO ACT-SAF), and monitoring. ICAO is now working towards developing the outcomes for the 3rd conference on aviation alternative fuels (CAAF/3) in Dubai in November. The conference will review the existing goal 2050 SAF goal, as well as consider how to approach assistance and capacity building and financing for cleaner energy. Canada is looking to update the SAF vision in line with the new ICAO 2050 net-zero goal.
  • With regards to Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), the assembly agreed to a baseline for the remainder of the scheme of 85% of 2019 levels. This brings the expected amount of offsetting back in line with pre-COVID estimates. The individual growth factor was reduced to 15% in the last three years. This affects the distribution of obligations, but not overall ambition. Given uncertainty on estimate growth of the sector and our airlines, it is not clear whether this change would increase or decrease obligations on our sector.
  • Canada’s Aviation Climate Action Plan was submitted to ICAO September 14, 2022, as per the commitment within the International Aviation Climate Ambition Coalition (IACAC),and was published September 27, 2022. The Action Plan sets a vision for net-zero emissions by 2050 and will follow ICAO guidance focusing on advancing and accelerating key decarbonization pathways, such as new technology, improved operations, and the production and use of SAF.
  • Transport Canada is leading a newly formed Sustainable Aviation Task Force which will oversee the implementation of the Action Plan and perform the 2024 update. Two key priorities for the Task Force are to set a 2030 carbon emission reduction target and develop a SAF Blueprint.

Surface:

  • Canada has committed to ambitious GHG emissions reduction targets of 40 to 45% below 2005 levels by 2030 and net-zero emissions by 2050, which were enshrined in law in the Canadian Net-Zero Emissions Accountability Act. In March 2022, the Government of Canada (GoC) announced its 2030 ERP, with a sector-by-sector approach for Canada to reach its 2030 climate target and remain on track towards net-zero emissions by 2050. 
  • The transportation sector represents a 22% of total GHG emissions in Canada (150 Mts in 2021) and is poised to become the largest source of GHG emissions by 2030, overtaking the oil and gas sector. Taking action to reduce emissions from this diverse and hard-to-abate sector is critical to meeting Canada’s ambitious climate targets.
  • To date, GoC action in the transportation sector has largely focused on the on-road sector, as it accounts for 84% of transportation emissions in Canada.  Through the ERP, Canada committed to developing light-duty ZEV sales regulations to ensure that 100% of light-duty vehicle sales are ZEVs by 2035 with interim targets of at least 20% by 2026 and at least 60% by 2030. Proposed regulations were released through Canada Gazette Part 1 in December 2022. Canada also committed to developing regulations for the medium- and heavy-duty vehicle sector such that 100% of medium- and heavy-duty vehicle sales are ZEVs by 2040 for a subset of vehicle types based on feasibility. Interim targets for the mid-2020s may be explored.
  • Canada’s full suite of government wide decarbonization efforts taken to date are outlined in Canada Action Plan for Clean On-Road Transportation released in December 2022. These efforts include implementing regulated ZEV sales targets, investing in federal ZEV incentive programs and commensurate ZEV charging infrastructure, ensuring regulatory readiness, promoting consumer education and awareness, capitalizing on clean growth opportunities, and collaborating with other leading jurisdictions.
  • Investments to decarbonize on-road transportation announced in Budget 2022 included:
    • Incentives for Zero Emission Vehicles (iZEV)
      • Extending and expanding the Incentives for Zero-Emission Vehicles (iZEV) Program ($1.7 billion) to make it more affordable for Canadians to purchase or lease qualifying zero-emission light-duty vehicles.
    • Incentives for Medium- and Heavy-duty Zero Emission Vehicles (iMHZEV)
      • Introducing a purchase/lease incentive for medium- and heavy-duty zero-emission vehicles (the iMHZEV Program), with funding of $547.5 million over four years.  The program was launched on July 11th. The iMHZEV Program offers incentives of up to $200,000 on the purchase or lease of eligible medium- and heavy-duty zero-emission vehicles (MHZEVs) by Canadian businesses and organizations.
    • Green Freight Program:
      • A Green Freight Program ($199.6 million) to retrofit large trucks currently on the road.
    • Zero Emission Trucking Program:
      • A Zero Emission Trucking Program ($75.8 million) to help establish the regulatory and safety foundation necessary to increase the number of medium- and heavy-duty zero-emission vehicles (MHZEVs) on Canadian roads.
    • ZEV Infrastructure Investments:
      • Deployment of ZEV charging infrastructure through NRCan’s Zero-Emission Vehicle Infrastructure Program ($400 million) and an additional $500 million through the Canada Infrastructure Bank in large-scale zero-emission vehicle charging and refuelling infrastructure that is revenue generating and in the public interest.
    • Supporting the Greening Government Strategy’s fleet electrification commitments ($2.2 million).

Hydrogen:

  • The Hydrogen Strategy for Canada lays out an ambitious framework for actions that will cement hydrogen as a tool to achieve our goal of net-zero emissions by 2050 and position Canada as a global, industrial leader of clean renewable fuels.
  • Since the announcement of The Hydrogen Strategy, Transport Canada has been working alongside Natural Resources Canada to develop a strategy that will set us on the path to meet our climate change goals.
  • The strategy will position Canada as a world-leading producer, user and exporter of clean hydrogen, and associated technologies.