Thank you, Mr. Chair.

My name is Ian Thomson, and I am the president of Advanced Biofuels Canada. I'm joined here by my colleague Fred Ghatala, the director of carbon and sustainability for our organization.

I wish to convey this morning two core ideas relative to the committee's study.

The first is that the advanced biofuels and renewable synthetic fuels made by our members have improved dramatically on all fronts in the past decade and are being deployed at commercial scale here and around the world, yet the revolutionary nature of these innovations is not widely known and old perceptions prevail.

My second message is that the clean fuel regulation, or CFR, currently under final review has immense potential, but needs several straightforward amendments to deliver on its promise.

Renewable fuel regulations of a decade ago had only a handful of solutions, but these regulations worked as intended. They kick-started widespread efforts to deploy a new generation of low-carbon, energy-dense fuels.

Today these fuels can be 100% substitutes for, or blended with, fossil fuels, fully functional in existing engines and infrastructures, and some are indeed produced at existing petroleum refineries. Clean fuel feedstocks have expanded beyond sustainable crops to include household and industrial wastes and residues, and even CO2 captured from air or from industrial flue stacks. Clean liquid fuels complement an array of other low-carbon transportation energies now also being scaled up.

The results of these innovations are that advanced biofuels made today in Canada can be carbon competitive to, for instance, electric vehicles on a full life-cycle basis. A vehicle running on these fuels can be a zero-emission vehicle, reducing greenhouse gases from 80% to 120% below those of fossil.

We know that electricity and other low-carbon energies will have a rapidly growing role in transportation. The IEA's sobering report of last month starkly noted that, even under fully executed, ambitious, global net-zero pledges, by 2050 more than 80% of final energy demand in transportation can rely on the internal combustion engine. Marine, rail and aviation sectors may be reliant on those fuels even longer. In short, we can't wait until 2030 or 2050 without the rapid scale-up of these liquid fuels.

The new clean fuel regulations can play a key role in Canada's net-zero future, and we have two recommendations relative to its design.

Our first addresses an inescapable fact that 75% of vehicle greenhouse gas emissions is from crude oil in fuel combustion and the other 25% is from the energy that goes into extracting and refining fuels. In plain terms, the CFR will fail to get Canada on the path to net zero unless it addresses, proportionately, these combustion emissions. The only solutions capable of delivering zero combustion emissions are advanced biofuels, renewable electricity, low-carbon hydrogen, renewable natural gas, and bio-crude for refineries. Put another way, you can't capture and store a car's tailpipe exhaust.

Unfortunately, the CFR draft design offers many incentives for fuel suppliers to focus their actions on reducing upstream emissions that will never be able to take us more than 25% of the way to net zero. In addition, other provisions will award credits for activities that have nothing to do with liquid fuels or transportation. I would be happy to describe the straightforward solution to this misalignment, but it roughly follows the precedents set by other global clean fuel regulations.

Our second recommendation relates to CFR feedstock criteria and the new greenhouse gas measurement tool. Canada's providers of sustainable crops, agricultural and forestry residues and waste resources are concerned about market access requirements and seek clarity on carbon intensity scoring under the new LCA tool.

The practical solution is to align the life-cycle assessment model and feedstock criteria with established industry standards in the North American fuel trade and to adopt it with an orderly transition.

Clarity on how Canada's farmers, foresters and clean fuel producers can participate will support new investments. Our recent analysis indicates that a well-designed CFR can create over 20,000 new jobs and add $10 billion in new economic output.

Last, I'd like to add that several of the clean energy tax measures and funding programs in the strengthened climate plan in budget 2021 need refinement to create competitive conditions for private sector investments.

In closing, let me reflect again that Canada's advanced biofuels sector is helping drive Canada's economic recovery and underpin climate plans. Our task is clear: to decarbonize the internal combustion engine.

We appreciate your work on low-carbon fuels and the invitation to meet today. My colleague and I look forward to your questions.

My thanks to the members of the committee.