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ZEVs will make up half of Canada’s sales by 2030: PM Trudeau

31 August 2021 IHS Markit Energy Expert

Amid a tightening race in the 20 September federal election, Canadian Prime Minister Justin Trudeau reaffirmed his support for a recently announced zero-emission vehicle (ZEV) mandate, while pledging to regulate emissions from the oil and natural gas sector.

"We are announcing zero-emission vehicles are the only new vehicles to be sold in Canada as of 2035, and to get there by 2030, 50% of all new vehicles in Canada will be zero emission," Trudeau said at a 29 August Liberal Party rally in Cambridge, Ontario.

Ahead of the snap election called on 15 August, Trudeau reminded his supporters about the green accomplishments of his tenure, including the ZEV mandate, while hoping to capitalize on his government's handling of the COVID-19 pandemic to regain a parliamentary majority. A trip to the ballot box was not required until October 2023.

Mandatory target

Transport Canada on 29 June announced a "mandatory target" for all light-duty vehicle and passenger truck sales to be ZEVs by 2035 that advances a prior target date of 100% sales by 2040, and would bring the country in line with its goal of achieving net-zero emissions by 2050.

Together with the ZEV mandate, Canada also has announced a ban on sales of gasoline-powered light vehicles from 2035.

Transport Canada is confident that the 2035 ZEV target will help Canada achieve net-zero emissions by 2050 because light-duty vehicles are typically in service for about 15 years, thus potentially enabling nearly 100% of Canada's light-vehicle fleet to be ZEVs by 2050.

Given that the country imports most of its vehicles, Canada will be reliant on the global supply chain, pointed out Stephanie Brinley, IHS Markit principal automotive analyst.

IHS Markit has forecast Canada's annual light-vehicle sales will be 2 million units per year in 2027, and remain there through at least 2033. Canada accounts for about 2% of global light-vehicle sales.

There were 54,353 new ZEVs registered in Canada in 2020, down slightly from 2019. They accounted for just 3.5% of new vehicle registrations in the country, according to Statistics Canada.

Based on Transport Canada's analysis of data acquired from IHS Markit, however, the ZEV share of light-duty vehicles sales was 3.8% in 2020, up from 3.1% in 2019 and 2.3% in 2018.

Transport Canada said it will develop interim targets for 2025 and 2030, as well as any "additional mandatory" measures needed on top of Canada's GHG emissions regulations for light-duty vehicles.

Automakers critical

The Global Automakers of Canada, representing 15 automakers, issued a statement in late June, criticizing the plan. "We share the government's ultimate objective of carbon elimination but find today's announcement lacking in the details that will be required for Canada to successfully make the transition to 100% ZEV sales by 2035," David Adams, the group's president, said.

As for the oil and gas industry, Trudeau said emissions cannot be allowed to rise indefinitely, despite the importance of the sector to the nation's economy, hinting that a re-elected Liberal government would set out an emissions-reduction plan for the sector. He also noted that major oil and gas companies have already committed to net zero by 2050.

At the Leaders Summit on Climate in late April, Canada pledged to reduce its emissions by 40% to 45% below 2005 levels by 2030 before reaching net zero in 2050. The previous 2030 target was 30%.

--Contributions from Abdul Latheef, OPIS, and Amena Saiyid, Net-Zero Business Daily.

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