Vol. 149, No. 15 — July 29, 2015

Registration

SOR/2015-187 July 16, 2015

CANADIAN ENVIRONMENTAL PROTECTION ACT, 1999

Regulations Amending the Sulphur in Gasoline Regulations

P.C. 2015-1077 July 16, 2015

Whereas, pursuant to subsection 332(1) (see footnote a) of the Canadian Environmental Protection Act, 1999 (see footnote b), the Minister of the Environment published in the Canada Gazette, Part I, on September 27, 2014 a copy of the proposed Regulations Amending the Sulphur in Gasoline Regulations, substantially in the annexed form, and persons were given an opportunity to file comments with respect to the proposed Regulations or to file a notice of objection requesting that a board of review be established and stating the reasons for the objection;

Whereas the Governor in Council is of the opinion that the Sulphur in Gasoline Regulations (see footnote c), as amended by the proposed Regulations, could make a significant contribution to the prevention of, or reduction in, air pollution;

And whereas, pursuant to subsection 140(4) of that Act, before recommending the proposed Regulations, the Minister of the Environment offered to consult with the provincial governments and the members of the National Advisory Committee who are representatives of aboriginal governments;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of the Environment, pursuant to sections 140 (see footnote d), 326 and 330 (see footnote e) of the Canadian Environmental Protection Act, 1999 (see footnote f), makes the annexed Regulations Amending the Sulphur in Gasoline Regulations.

REGULATIONS AMENDING THE SULPHUR IN GASOLINE REGULATIONS

AMENDMENTS

1. (1) The definitions “auditor” and “California gasoline” in subsection 1(1) of the Sulphur in Gasoline Regulations (see footnote 1) are repealed.

(2) The definitions “blend”, “pool average”, “sulphur-limited butane”, “sulphur-limited oxygenate” and “year” in subsection 1(1) of the Regulations are replaced by the following:

“blend” means the production of a batch by mixing gasoline or gasoline components, including oxygenates. It does not include

“pool average” means the volume-weighted average concentration of sulphur in gasoline that, during a year, is produced at a refinery or blending facility or imported, as calculated in accordance with section 10. (moyenne de l’ensemble des lots)

“sulphur-limited butane” means butane with a sulphur concentration that does not exceed the applicable limit set out in paragraph 2(1)(b). (butane à concentration limitée en soufre)

“sulphur-limited oxygenate” means an oxygenate with a sulphur concentration that does not exceed the applicable limit set out in paragraph 2(1)(b). (produit oxygéné à concentration limitée en soufre)

“year” means a calendar year. (année)

(3) Paragraph (b) of the definition “gasoline” in subsection 1(1) of the Regulations is replaced by the following:

(4) Subsection 1(1) of the Regulations is amended by adding the following in alphabetical order:

“trading system” means the temporary sulphur compliance unit trading system referred to in subsections 13(1) and (3). (système d’échange)

2. Section 1.1 of the Regulations is amended by adding “or” at the end of paragraph (b) and by repealing paragraph (c).

3. (1) Subsections 2(1) to (3) of the Regulations are replaced by the following:

2. (1) For the purpose of section 139 of the Act, the concentration of sulphur in each batch of gasoline produced or imported by a primary supplier shall not exceed

(2) For the purpose of section 139 of the Act and subject to subsection (2.1), the pool average of a pool in respect of which a primary supplier has made an election under section 9 shall not exceed

(2.1) For the purpose of subsection 139 of the Act, if a primary supplier uses sulphur compliance units to adjust a pool average in accordance with section 15, the adjusted pool average shall not exceed 10 mg/kg.

(3) For the purpose of section 139 of the Act, the concentration of sulphur in gasoline that is sold shall not exceed 80 mg/kg.

(2) Paragraph 2(4)(a) of the Regulations is replaced by the following:

(3) Subsection 2(5) of the Regulations is repealed.

4. (1) Subsections 3(1) and (2) of the Regulations are replaced by the following:

3. (1) For the purposes of these Regulations, when a primary supplier takes samples they shall use one of the following methods:

(2) For the purposes of these Regulations,

(2) Subsections 3(6) and (7) of the Regulations are replaced by the following:

(6) For the purposes of sections 12, 24 and 25, if a primary supplier is using an alternative method in accordance with subsection 6(2) of the Benzene in Gasoline Regulations, they may use that method to analyze samples of gasoline.

(7) Despite subsection (6), compliance with a requirement set out in section 2 shall be determined in accordance with the test methods set out in subsection (2).

5. Section 4 of the Regulations and the heading before it are repealed.

6. (1) Subsection 5(1) of the Regulations is amended by adding “or” at the end of paragraph (f) and by repealing paragraph (g).

(2) Subsection 5(3) of the Regulations is replaced by the following:

(3) A primary supplier shall, for each batch of gasoline that is identified as a type referred to in any of paragraphs (1)(b) to (f), keep a record of its type and the use for which it was sold or delivered.

7. Subsection 6(3) of the Regulations is repealed.

8. (1) Subsection 9(1) of the Regulations is replaced by the following:

9. (1) A primary supplier may, in respect of a pool, elect to calculate the concentration of sulphur in gasoline that is in the pool on the basis of a pool average by submitting to the Minister a notice of the election within the period specified in subsection (2.1).

(1.1) A pool shall be composed of one of the following:

(2) Paragraph 9(2)(a) of the Regulations is replaced by the following:

(3) Paragraph 9(2) of the Regulations is amended by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):

(4) Subsection 9(3) of the Regulations is replaced by the following:

(2.1) The notice shall be submitted to the Minister

(3) At least 45 days before the day on which any change that affects information referred to in subsection (2) is implemented, the primary supplier shall submit a notice containing the updated information to the Minister.

9. (1) Subsection 10(1) of the Regulations is replaced by the following:

10. (1) Subject to subsections (2) to (6), a primary supplier shall, for each pool in respect of which they make an election under section 9, calculate the pool average of all gasoline in the pool that was identified as low-sulphur gasoline under section 5.

(2) Subsections 10(3) to (5) of the Regulations are replaced by the following:

(3) If a primary supplier imports and delivers a batch of low-sulphur gasoline to a refinery or a blending facility, the primary supplier may include that batch in the pool average for the refinery or blending facility if the batch is excluded from the pool average for gasoline that is imported.

(4) If a primary supplier dispatches from a refinery and delivers, or imports and delivers, gasoline-like blendstock to a blending facility where it is blended to produce a batch of low-sulphur gasoline, the primary supplier may include the volume of that gasoline-like blendstock and its concentration of sulphur in the pool average for the refinery or for gasoline that is imported, if

(5) If a primary supplier dispatches from a refinery and delivers, or imports and delivers, gasoline-like blendstock to a blending facility where it is blended with low-sulphur gasoline to produce a batch of low-sulphur gasoline, the primary supplier shall include the volume of that gasoline-like blendstock and its concentration of sulphur in the pool average for the refinery or for gasoline that is imported.

(6) If a primary supplier dispatches from a refinery and delivers, or imports and delivers, a batch of low-sulphur gasoline to a facility where sulphur-limited oxygenate or sulphur-limited butane is added to the batch, the primary supplier may, if they own the batch, adjust the recorded concentration of sulphur of the batch to reflect the addition of the oxygenate or butane and may use the adjusted recorded concentration of the batch, instead of its measured concentration, to calculate the pool average for the refinery or for gasoline that is imported.

(7) For the purpose of subsection (6), if the sulphur-limited oxygenate that is added to the batch is denatured fuel ethanol, the primary supplier may, in adjusting the recorded concentration of the batch, assume that the sulphur concentration of the oxygenate is 5 mg/kg.

10. Section 11 of the Regulations and the heading before it are repealed.

11. (1) The portion of section 12 of the Regulations before paragraph (a) is replaced by the following:

12. A primary supplier who makes an election in respect of a pool under section 9 shall, for each batch of gasoline in the pool, keep a record in Canada, for a period of five years after the day on which the record is made, that sets out the following information:

(2) Section 12 of the Regulations is amended by striking out “and” at the end of paragraph (b), by adding “and” at the end of paragraph (c) and by adding the following after paragraph (c):

12. The heading before section 13 and sections 13 and 14 of the Regulations are replaced by the following:

TEMPORARY SULPHUR COMPLIANCE UNIT TRADING SYSTEM
Election

13. (1) A primary supplier who makes an election under section 9 before the day on which this section comes into force may, in respect of the pool to which that election applies, elect to participate in the temporary sulphur compliance unit trading system by submitting to the Minister a notice of the election to participate in accordance with subsection (2).

(2) The notice shall identify the pool to which the election applies and be submitted to the Minister within 60 days after the day on which this section comes into force.

(3) A primary supplier who does not make an election under section 9 before the day on which this section comes into force may make such an election and, in respect of the pool to which that election applies, elect to participate in the temporary sulphur compliance unit trading system by submitting to the Minister a notice of their election to participate in accordance with subsection (4).

(4) The notice shall identify the pool to which the election applies and be submitted to the Minister

Creating Sulphur Compliance Units

14. (1) Subject to subsections (2) and (3), a primary supplier who is participating in the trading system may, in respect of the pool to which the election applies, create a number of sulphur compliance units, for a year, that is equal to the amount determined in accordance with the following formula:

(A – B) × C

where

A is one of the following:

B is the pool average of that pool for the year, in mg/kg; and

C is the volume of low-sulphur gasoline that was used to calculate the pool average, in m3.

(2) For the purpose of determining the number of sulphur compliance units for a pool referred to in paragraph 9(1.1)(c) for any of the years 2012 to 2014,

(3) In the case of a primary supplier who makes an election by submitting a notice of election in accordance with paragraph 13(4)(b), the following modifications apply for the purpose of determining the number of sulphur compliance units for the pool for any of the years 2012 to 2015:

(4) If the number determined in accordance with the formula is not a whole number, it shall be rounded down to the nearest whole number.

(5) A sulphur compliance unit is created when the primary supplier makes an entry of its creation in the sulphur compliance unit account book maintained by the primary supplier in accordance with section 18. The entry shall be made no later than February 15 of the year after the year for which the units are being created.

Using Sulphur Compliance Units

15. (1) A primary supplier who is participating in the trading system may use a sulphur compliance unit that they hold, in respect of a pool for which an election is made under section 13, to adjust the pool average of that pool for any of the years 2017 to 2019.

(2) The adjusted pool average for a year shall be determined in accordance with the following formula:

((X × Y) – Z)/Y

where

X is the pool average for the year, in mg/kg;

Y is the volume of low-sulphur gasoline that was used to calculate the pool average, in m3; and

Z is the number of sulphur compliance units that are being used for the year by the primary supplier.

(3) A sulphur compliance unit is used when the primary supplier makes an entry of its use in the sulphur compliance unit account book maintained by the primary supplier in accordance with section 18. The entry shall be made no later than March 31 of the year after the year for which the unit is used.

Transfer of Sulphur Compliance Units

16. A primary supplier who is participating in the trading system may transfer any sulphur compliance units that they hold between pools for which they have made elections under section 13 or to another primary supplier who is participating in the trading system. However, a sulphur compliance unit may only be transferred between primary suppliers once.

Ceasing Participation

17. (1) A primary supplier may, in respect of a pool, cease to participate in the trading system by submitting to the Minister a notice to that effect no later than November 1 of the last year to which the election to participate applies.

(2) A primary supplier who withdraws their election under subsection 9(4) in respect of a pool ceases to participate in the trading system in respect of that pool as of the date of that withdrawal.

(3) If a primary supplier ceases to participate in the trading system in respect of a pool in accordance with this section, all sulphur compliance units that they hold in respect of that pool are cancelled.

Sulphur Compliance Unit Account Book

18. A primary supplier who is participating in the trading system shall, for each pool in respect of which they make an election under section 13, maintain a sulphur compliance unit account book that contains the following information:

Other Records

19. A primary supplier who is participating in the trading system shall, for each of the years 2017 to 2019, maintain a record that contains the following information for each pool in respect of which they make an election under section 13:

20. A primary supplier who is participating in the trading system shall maintain a record that contains a copy of all supporting documents for the records referred to in sections 18 and 19.

Maintaining Records

21. The primary supplier shall maintain the records referred to in sections 18 to 20 in Canada until December 31, 2025.

PART 3

REPORTS

22. This Part does not apply to a primary supplier who, in total, produces and imports less than 400 m3 of gasoline on an annual basis.

23. (1) A report that is required to be submitted to the Minister under these Regulations shall be submitted electronically in the form and format specified by the Minister and bear the electronic signature of an authorized official.

(2) If the Minister has not specified an electronic form and format or if it is impractical to submit the report electronically in accordance with subsection (1) because of circumstances beyond the control of the person sending the report, they shall submit it on paper, signed by an authorized official and in the form and format, if any, specified by the Minister. However, if no form and format have been specified, the report may be in any form and format.

24. (1) For each year in which a primary supplier produces or imports gasoline identified under subsection 5(1) or (2) as gasoline-like blendstock or low-sulphur gasoline, the primary supplier shall, for each refinery and blending facility at which they produced that gasoline and for gasoline that is imported, submit to the Minister a report that contains the information referred to in Schedule 1. However, a report is not required in respect of gasoline that is imported if the primary supplier has included all batches imported in the pool average for a refinery or blending facility in accordance with subsection 10(3).

(2) Every primary supplier shall submit to the Minister, as an annex to the report and for each batch of gasoline-like blendstock that was dispatched or imported during the period covered by the report, the information referred to in paragraphs 6(1)(a) to (e) and the actual volume of the batch dispatched or imported.

(3) The report shall be submitted on or before February 15 of the year after the year for which it is submitted.

(4) A record of analysis referred to in subsection 8(3) of the Benzene in Gasoline Regulations may be used for the purposes of submitting the information referred to in Schedule 1.

(5) Despite subsection (4), compliance with a requirement under section 2 shall be determined in accordance with the test methods referred to in subsection 3(2).

25. (1) Subject to subsection (2), for each year in which a primary supplier participates in the trading system, they shall, for each pool in respect of which they make an election under section 13, submit to the Minister a report, no later than April 30 of the year after the year for which the report is submitted, that contains the information referred to in Schedule 2.

(2) In respect of each of the years 2012 to 2014, the reports shall be provided within 120 days after the day on which this section comes into force.

(3) A record of analysis referred to in subsection 8(3) of the Benzene in Gasoline Regulations may be used for the purposes of submitting the information referred to in Schedule 2.

(4) Despite subsection (3), compliance with a requirement under section 2 shall be determined in accordance with the test methods referred to in subsection 3(2).

26. (1) A primary supplier shall, for each pool in respect of which they make an election under section 9, have the records required under sections 5, 6, 12, 18 and 19 and the reports required under subsections 24(1) and 25(1) audited by an auditor who is independent of the primary supplier and submit to the Minister a report that is signed and dated by the auditor and that contains the following information:

(2) The primary supplier shall submit the auditor’s report

(3) In this section, “auditor” means an individual or firm that is certified, for the purposes of carrying out International Organization for Standardization quality assurance (ISO 9000 or 14000 series) assessments, by the International Register of Certificated Auditors or any other nationally or internationally recognized accreditation organization.

13. The Regulations are amended by adding, after section 26, the Schedules 1 and 2 set out in the schedule to these Regulations.

TRANSITIONAL PROVISION

14. (1) A primary supplier who, before the day on which this section comes into force, made an election in respect of a pool that is composed of gasoline imported into a province is deemed to have made an election under subsection 9(1) of the Sulphur in Gasoline Regulations for a pool that is composed as described in paragraph 9(1.1)(c) of those Regulations.

(2) Despite subsection 9(4) of the Sulphur in Gasoline Regulations, a primary supplier is not permitted to withdraw the deemed election for the year 2015.

COMING INTO FORCE

15. These Regulations come into force on the day on which they are registered.

SCHEDULE
(Section 13)

SCHEDULE 1
(Subsections 24(1) and (4))

ANNUAL REPORT OF SULPHUR CONCENTRATION IN GASOLINE

1. The year for which the report is submitted.

2. The following information:

3. The following information respecting gasoline, other than gasoline produced for export, that was produced by the primary supplier and identified under section 5 of these Regulations as low-sulphur gasoline:

4. The following information respecting gasoline, other than gasoline in transit through Canada, that was imported by the primary supplier and identified under section 5 of these Regulations as low-sulphur gasoline:

5. The following information respecting gasoline that was produced by the primary supplier and identified under section 5 of these Regulations as gasoline-like blendstock, other than gasoline-like blendstock produced for export:

6. The following information respecting gasoline that was imported by the primary supplier and identified under section 5 of these Regulations as gasoline-like blendstock, other than gasoline-like blendstock in transit through Canada:

7. For each pool in relation to which the recorded concentration of sulphur of a batch of low-sulphur gasoline was adjusted in accordance with in subsection 10(6) of these Regulations, the following information for each facility referred to in that subsection:

SCHEDULE 2
(Subsections 25(1) and (3))

TEMPORARY SULPHUR COMPLIANCE UNIT TRADING SYSTEM ANNUAL REPORT

1. The year for which the report is submitted.

2. The following information:

3. For a report that is submitted for any of the years 2012 to 2016, the following information regarding the gasoline, other than gasoline produced for export or that was in transit through Canada, that was produced or imported by the primary supplier in that year and identified under section 5 of these Regulations as low-sulphur gasoline, with separate entries for gasoline with a sulphur concentration of 30 mg/kg or less and gasoline with a sulphur concentration of more than 30 mg/kg:

4. For a report that is submitted for any of the years 2017 to 2019, the following information regarding the gasoline, other than gasoline produced for export or that was in transit through Canada, that was produced or imported by the primary supplier in that year and identified under section 5 of these Regulations as low-sulphur gasoline, with separate entries for gasoline with a sulphur concentration of 10 mg/kg or less and gasoline with a sulphur concentration of more than 10 mg/kg:

5. The following information respecting sulphur compliance units:

6. The following information respecting gasoline, other than gasoline produced for export or that was in transit through Canada, that was produced or imported by the primary supplier:

7. The following information respecting the trading of sulphur compliance units in the year:

N.B. The Regulatory Impact Analysis Statement for these Regulations appears following SOR/2015-186, Regulations Amending the On-Road Vehicle and Engine Emission Regulations and Other Regulations Made Under the Canadian Environmental Protection Act, 1999.