Situated on the Canadian Pacific Coast and primarily west of the Rocky Mountains, the Province of British Columbia (B.C.) has a diverse geography. Nearly half of the province’s estimated population of 5.7 million lives in the Vancouver metropolitan area. Population distribution as of 2017 are shown in the figure below. The major sectors of B.C.’s economy include forestry, mining, filmmaking and video production, tourism, real estate, construction, wholesale, and retail. Its main exports include lumber and timber, pulp and paper products, copper, coal, and natural gas.
Figure 1. British Columbia Population Density
Source: B.C. Population – Environmental Reporting
The Rocky Mountains and the ranges to the East form a major barrier to overland transportation into British Columbia’s populated areas. There are only five major road and two rail routes to the rest of Canada, and there are several international highway and rail crossings to the states of Washington, Idaho, and Montana. B.C.’s two major seaports – Vancouver and Prince Rupert – are Canada’s only Pacific tidewater ports. Additional information about B.C.’s energy use and supply are available here and here.
For the transportation sector, liquid petroleum fuels are supplied to B.C. via the Trans Mountain Pipeline System (TMPS) which transports both crude oil and products from Alberta to B.C. Crude oil is delivered to the 55,000 barrel per day (BPD) Burnaby refinery in greater Vancouver and to the Westridge Marine Terminal where crude oil is loaded onto tankers for export. Products are delivered to the Kamloops Terminal and the Burnaby Terminal for distribution to customers. Additional refined petroleum fuels are supplied from the 12,000 BPD Prince George refinery in central B.C., and by rail and marine receipts. Non-liquid and renewable fuels are supplied via the natural gas pipeline systems and electricity systems, the 3,000 BPD renewable diesel (RD) plant in Prince George, or by rail primarily from sources east of the Rocky Mountains in Canada or the U.S., or by marine vessel.
B.C.’s energy systems share many characteristics with Washington, Oregon, and California – all are isolated by geography and distance from non-West Coast energy sources, the electricity grid and natural gas systems are interlinked, there are regular marine movements of crude oil and petroleum products, and rail lines link the region to renewable energy sources to the east.
Introduction of the BC-LCFS Program
In 2008, B.C. implemented the Greenhouse Gas Reduction (Renewable and Low Carbon Fuel Requirements) Act, which established requirements for renewable content and greenhouse gas (GHG) emission reductions. The program was implemented in 2010 and included mandates for a minimum 5% renewable content in gasoline and a minimum 3% renewable content in diesel (increased to a 4% minimum starting in 2011).[1] Effective January 1, 2024, the Low Carbon Fuels Act (the Act) replaced the Greenhouse Gas Reduction (Renewable and Low Carbon Fuel Requirements) Act. Today, the Low Carbon Fuels Act and its regulations are known as the British Columbia Low Carbon Fuel Standard (BC-LCFS). The Low Carbon Fuels Act incorporates a minimum renewable volume for jet fuel beginning at 1% in 2028 and increasing to 3% for 2030 and subsequent compliance periods. As of April 2025, the program requires the renewable content in diesel to be 8% from fuel produced in Canada, and in 2026, the 5% renewable gasoline content must be met with Canadian domestic production.
The British Columbia Ministry of Energy, Mines and Low Carbon Innovation (MEMLCI) data published to-date indicate that there has been a steady and significant increase in the renewable content of both the gasoline pool (from 5% to 11% in 2024) and the diesel pool (from 3% to 31% in 2024) since the BC-LCFS was implemented.
Part 3 of the Act requires that each supplier of fuel has the specified minimum percentage of biofuels (e.g., ethanol, biodiesel, and renewable diesel). Part 4 of the Act requires that fuel suppliers must also meet annual carbon intensity (CI)[2] reduction targets by securing program credits to offset the deficits incurred by the fossil fuels they supply. Deficits represent the difference between the CI of a petroleum fuel and the target CI for the program based on the reduction schedule for that year. Likewise, credits represent how much lower the CI is for a given renewable fuel versus the target CI for the program that year. Compliance is measured in terms of the balance of these credits and deficits with net deficit generators purchasing credits from net credit generators to cover their deficits. The current schedule of BC-LCFS CI reductions is shown in Table 1 below; all reductions are versus a 2010 baseline.
Table 1. BC-LCFS CI Reduction Schedule
Source: BC-LCFS Requirements
BC-LCFS Program Structure vs. Other LCF Programs
The BC-LCFS is fundamentally similar to the California Low Carbon Fuel Standard (CA-LCFS), Oregon Clean Fuels Program (OR CFP), Washington Clean Fuel Standard (WA CFS) and Canadian Clean Fuel Regulations (CFR). These Low Carbon Fuel (LCF) programs create incentives to decarbonize transport fuels by establishing a set schedule of declining aggregate CI targets that is met by using credits (generated from the production, purchase and use of fuels with CIs lower than the targets) to retire deficits (generated by fuels, usually fossil based, that are higher than the target CI). Like the U.S. Renewable Fuels Standard (RFS), the Canadian CFR is a federal program and is stackable with provincial or state programs. The RFS, however, is a volumetric program for renewable fuels rather than an LCF program.
A summary-level comparison of the existing North American LCF programs’ structures and functionality to-date are outlined in Table 2 below. Notice there is a range of CI-reduction targets across the programs as well as differing start dates and baseline years. Importantly, credits generated are unique to that program and cannot be traded across programs. All programs typically review the feasibility of more ambitious CI reduction targets as part of periodic updates to the regulations.
Table 2. Comparison of North American LCF Programs
Sources: MEMLCI, CARB, Oregon DEQ, Washington Department of Ecology (Ecology), and Environment and Climate Change Canada (ECCC), Statistics Canada
Table Footnotes:
a. The CFR was implemented July 1 rather than on January 1.
b. The 5.3% CI reduction requirement applies to the gasoline pool. The 5.4% CI reduction requirement applies to the diesel pool.
c. California’s 2024 LCFS Amendment Schedule of 22.75% became effective on July 1, 2025.
d. Reduction schedule to implement Washington HB 1409 is under regulatory development. Values represent Stillwater’s interpretation of an HB1409-compliant schedule.
e. Includes exempt volumes.
As can be seen in Table 2 above, the BC-LCFS covers about the same fuel volume as Oregon’s CFP but has a larger credit generation and credit bank than its Oregon counterpart;[3] B.C.’s market is significantly smaller than the CA-LCFS in fuel volumes, credit and deficit measures. The CA-LCFS is the “1,000-pound gorilla” of these LCF programs; its credit generation is also almost twice that of the other four LCF programs combined. By the measure of credit bank coverage – total unused credits divided by the monthly rate of deficit generation – B.C. is in the middle of the pack among the five programs. The gasoline-to-diesel ratio illustrates the leverage that biodiesel (BD) and RD have on decreasing the overall average CI by rapidly reducing the CI of the liquid diesel portion. B.C. (and Canada as a whole) have the lowest such ratios of all LCF programs which means they have a greater opportunity to decarbonize with RD and BD.[4]
While all these LCF programs are fundamentally similar in structure, there are also differences and unique provisions associated with each LCF program. The key differences within the BC-LCFS program as compared to the others are highlighted here:
- LCA Model: B.C. uses the GHGenius lifecycle analysis (LCA) model while state-specific versions of the Greenhouse gases, Regulated Emissions, and Energy use in Technologies (GREET®) Model are used for the CA-LCFS, OR CFP, and WA CFS.[5] These models are similar in concept but have some significant differences leading to CI calculations which are not directly comparable. To complicate matters, the Canadian CFR uses yet another model – the Fuel Life Cycle Assessment Model developed in accordance with ISO Standard 14040.
- Treatment of ILUC: The absence of indirect land-use change (ILUC)[6] considerations is unique to the BC-LCFS program modeling.[7] Combined with model differences between the jurisdictions, this results in lower CIs and higher credit generation for crop-based fuels under the BC-LCFS. For example, RD produced from crop-based oils typically has a CI in the mid-50 g/MJ in California, approximately 20-30 points higher than non-crop-based fuels reflecting the application of ILUC; meanwhile, the average CI of RD used in the B.C. program is around 20 g/MJ.
- Baseline Renewable Usage: The low baseline ethanol content (4.7%) in B.C. gasoline allowed initial ethanol volume increases (with associated credit generation and displacement of petroleum gasoline) without exceeding the generally acceptable level into gasoline vehicles of 10%. By contrast, the baseline ethanol content in California and Oregon gasoline was 10% which essentially limited incremental ethanol volumes and the associated credit generation. In California, recently enacted legislation now allows E15 in the state, potentially increasing the ethanol blending displacing petroleum fuel.
- Minimum Renewable Content Requirements: The BC-LCFS contains a provision requiring a minimum level of renewable content in the fuel pool while the other U.S. LCF programs do not. For diesel, the minimum was raised in 2025 to 8%, and a requirement was added that such fuel be produced in Canada. For gasoline, the current standard of 5% holds, but beginning in 2026 all renewable fuel must be produced in Canada. (Ontario is the only other province with similar native production requirements.) Canada renewable production data show that domestic renewable diesel volume exceeds the combined B.C. and Ontario volume requirements; this may result in volume shifts into those provinces. Overall, Canada relies on imports for over 50% of its biomass-based diesel needs; Canada is also a significant importer of U.S. ethanol.
- Project Crediting: In addition to allowing credits to be generated via the consumption of low-CI fuels, the BC-LCFS, Canadian CFR, and CA-LCFS also allow approved projects to generate credits. These projects generally involve reduction of carbon emissions in the production, distribution, or delivery of transportation fuels. In the case of the BC-LCFS, these credits are called Initiative Agreements for the development of low-carbon fuel projects through the issuance of BC-LCFS credits.
- Credit Clearance Market: The California, Oregon, Washington, and Canadian LCF programs each include Credit Clearance Market (CCM) provisions to be used by regulated entities who cannot either produce or procure sufficient credits to offset debit accounts by the end of a compliance period. The CCM allows obligated parties to obtain credits from willing sellers with excess credits at a prescribed price. British Columbia, by contrast, offers no such protection and will assess administrative penalties depending on the nature and severity of the non-compliance.
- Price Cap: California has a credit price cap for all transactions, but B.C. does not. Oregon, Washington and Canada cap the price of credits traded in their CCMs but not credits sold outside of the CCM.
- Incremental Crude CI: California has an Incremental Crude oil CI provision that may add additional deficits to petroleum gasoline and diesel fuel based on the three-year average CI of the crude oil refined in California. The other LCF programs, including the BC-LCFS, do not have such provisions.
- Participation Fee: Unlike all the other LCF programs, the Washington Department of Ecology charges a participation fee for the WA CFS program that covers the cost of administering the program.
The net effects of these differences are: (1) to make it easier for deficit-generators in the BC-LCFS to achieve compliance with crop-based biofuels, and (2) the CIs assigned to neat gasoline and diesel fuel are about 10% lower in B.C. than under the OR CFP, WA CFS, or CA-LCFS.
For the Canadian market specifically: The BC-LCFS CI reduction targets are more aggressive than the Canadian CFR’s, so the two programs should not experience conflict or onerous complications for fuel suppliers. The ability to stack credits between the BC-LCFS and the federal CFR program adds more value to fuels sold in the B.C. market. The additive value of the BC-LCFS should incentivize low-CI fuels to flow to B.C. if the BC-LCFS credit values exceed the logistics costs.
Bottom Line: The existing LCF programs are much more alike than different. The structural differences between the programs have enabled B.C. to comply using less expensive low-carbon fuels and allowed credit prices to be lower than California’s through 2019. However, some of the differences have also nudged BC-LCFS credit prices significantly higher than California’s to attract the lowest carbon fuels available.[8]
BC-LCFS Credit Market vs. Other LCF Programs
Recent, annualized credit price and transfer data for the BC-LCFS, CA-LCFS, Oregon CFP, Washington CFS, and Canadian CFR markets are shown in Table 3 below for 2024 and nine months of 2025. As can be seen, these programs show significant differences in the percentage of credits generated that were traded. In California and Washington, significantly more credits were transferred than were generated, indicating that some companies may be buying and selling credits multiple times during the year. By contrast, the number of credits traded in B.C. was only 32% of those generated in 2024; this figure has increased from 5% in 2020. This comparatively low percentage of credits traded is likely due to a combination of obligated parties buying low-carbon fuels with the credits included in the purchase price, along with generating their own credits by producing low-carbon fuels or participating Initiative Agreement projects. The small numbers of trades in the BC-LCFS program suggests that this market is relatively illiquid. Year to date in 2025, the BC-LCFS has averaged 2.2 transfers per week; by contrast, the CA-LCFS consistently has an average of 74 per week, demonstrating a more liquid market.
Table 3. Comparison of LCF Market Trade Data
Sources: BC-LCFS, CA LCFS, OR CFP, WA CFR and CFR program data, Bank of Canada
BC-LCFS Market History
MEMLCI reports the number of trades, credits traded, and reported price of BC-LCFS credit transactions between counterparties,[9] as shown in Figure 2 below. The number of transactions and volume traded have increased substantially beginning in 2021. Credit prices increased from 2019 through 2023 but have declined in 2024 and 2025 after the initial data for Canada’s Clean Fuel Regulations (CFR) were released. Importantly, the BC-LCFS credit market is thinly traded – from 2015 through 2020, there were only about 30 deals done per year. The number of deals nearly tripled in 2021 and peaked at 160 in 2023 before declining to 116 in 2024. While the number of transactions fell in 2024, the total volumes have increased. Although BC-LCFS has been in effect for fifteen years, the BC-LCFS credit market still appears to be very illiquid relative to other carbon credit markets.
Figure 2. BC-LCFS Credit Transfer Activity
Source: MEMLCI Quarterly Low Carbon Fuel Credit Market Reports, Stillwater Analysis
The volumes shown above can be compared to total annual credit and deficit generation in Table 4 below. As can be seen in the table, a significant source of credits generated under the BC-LCFS have been from “Initiative Agreements” representing an average of 13% of the total credits over the last four years. The agreements grant credits for various projects designed to accelerate the adoption of low-carbon fuels. These include projects to construct low-carbon fuel infrastructure, scrappage of older internal combustion engine vehicles (ICEVs) and replacement with electric vehicles (EVs), and development of new low-carbon fuel technologies.[10]] In addition, the percentage of credits traded of the annual credits generated is shown in the last column. The highest percentage of credits traded of 35% is far less than in the CA-LCFS (123%), Oregon CFP (95%) or Washington CFS (137%) markets, illustrating the relative illiquidity of the BC-LCFS credit trading market.
Table 4. BC-LCFS Annual Credit and Debit Volumes (MT)
Source: B.C. Ministry of Energy and Climate Solutions. Information Bulletin RLCF-007-2024
Key Takeaway: While the structure and rules of the BC-LCFS are quite similar to the other LCF programs, there are many differences in the details. In each jurisdiction, the fuel volume, fuel mix, and credit markets differ in scale, transparency, and liquidity. Finally, there are national program differences; the CFR applies in B.C. and the U.S. Renewable Fuel Standard (RFS) applies in U.S. state jurisdictions. Although all these programs share fuel supply, at least on the increment, the combination of the differences highlighted above makes analyzing and predicting credit market interactions quite complex.
Stillwater’s BC-LCFS credit price outlook (subscription required) considers and integrates these factors to link credit prices between the BC-LCFS and CA-LCFS. Incorporated into this complex analysis is our outlook for CA-LCFS credit prices which Stillwater produces quarterly using a highly detailed and rigorous forecasting methodology.
Check out Stillwater’s Carbon Market Outlooks Dashboard to learn more!
