Clean Fuel Regulation - Verification Limit

Background

The Clean Fuel Regulation sets a limit on the verification in Section 147(5) and (6) for the following reports:.

1. Subsection 80(1) - Application for approval of carbon intensity
2. Subsection 90(1) - Application for temporary approval of the carbon intensity
3. Section 120 - Annual credit - creation report.
4. Section 121 (3) - June 30, 2023 — single report
5. Section 122 - Credit-adjustment report
6. Section 123 - Carbon-intensity-pathway report

Section - 147(5)

Section 147(5) - Verification of reports related to applications

(5) An individual must not carry out verification activities for a report submitted under any of sections 120 to 123 or act as an independent reviewer with respect to the verification of such a report if, during the five preceding years, they carried out verification activities, or acted as the independent reviewer, with respect to an application made under subsection 80(1) or 91(1) for the approval of a carbon intensity that is referred to in the report.

Implication - 147(5)

If an individual verified a report or acted as an independent reviewer for an application related to carbon intensity approval under subsections 80(1) or 91(1) - credit intensity application within the last five years, they cannot perform verification activities or act as an independent reviewer for a new report submitted under sections 120 to 123 - Annual report.

Section - 147(6)

Section 147(6) - Verification of certain reports

(6) An individual who carried out verification activities for a report that was submitted under section 123 or acted as an independent reviewer with respect to the verification of such a report must not, during the same compliance period, act as an independent reviewer or carry out verification activities with respect to a report that was submitted under section 120, 121 or 122 if the report was submitted by the same person who submitted the report under section 123 and it relates to the same carbon intensity.

Implication - 147(6)

If an individual has already carried out verification activities or acted as an independent reviewer for a report submitted under section 123, they cannot perform verification activities or act as an independent reviewer for another report submitted under sections 120, 121, or 122 during the same compliance period if:

• The reports were submitted by the same person or entity.
• The reports relate to the same carbon intensity.

Conclusion

In the near future, the restrictions imposed by the CFR may lead to a significant shortage of qualified lead verifiers and independent reviewers.

The reporting company may have to engage in more than one verification body for

• verification of CI
• verification of annual report
• verification of CI pathway report

On the other hand, one verification body may have to keep more than one set of qualified lead verifiers and independent reviewers to meet the CFR requirements

• one team for CI verification
• one team for annual report verification
• one team for CI pathway report verification

The verification of CI application should cost 3 times more than the annual report, as the CI application verification is good for 3 consecutive years. The person being lead verifier/independent reviewer for CI application cannot be involved in the verification of annual report or CI pathway report for the next 3 years.