Growing Price Advantage of Low-Carbon Propane Over Heating Oil in Canada Signals a Promising Future

The Canadian Propane Association has projected that the price advantage of low-emission propane as a heating option will continue to expand in Atlantic Canada. This revelation comes as carbon tax projections indicate that propane, with significantly lower emissions compared to furnace oil, will enjoy lower taxation. Starting on July 1, the federal fuel charge’s carbon tax on propane will be 7 cents per liter less than the charge on furnace oil. By 2030, this difference is estimated to reach about 19 cents per liter, illustrating the long-term financial benefits of choosing propane.

The impending federal fuel charge, projected to reach $170 per tonne by 2030, will result in a carbon tax of 45.57 cents per liter on furnace oil. In contrast, the tax on propane will only amount to 26.30 cents per liter. This growing price discrepancy reinforces the cost-effectiveness of utilizing propane for heating purposes.

Moreover, the implementation of the Clean Fuel Regulations will provide an additional advantage to propane pricing. By 2030, Atlantic Canadians will witness the full impact of these regulations on furnace oil prices, with an expected increase of 16 cents per liter, bringing the total to 61.57 cents. However, propane, as a gaseous fuel, remains exempt from the Clean Fuel Regulations, further solidifying its favorable pricing position. By 2030, the carbon tax on propane is estimated to be over 35 cents less than that imposed on furnace oil. To ensure a sustainable future, the Canadian Propane Association is actively exploring ways to enhance propane’s decarbonization, securing its position as an affordable and low-emission energy source for Atlantic Canada.

It is worth noting that, unlike the federal fuel charge, the Clean Fuel Regulations do not offer offset payments to consumers to mitigate price increases.

Shannon Watt, President and CEO of the Canadian Propane Association, emphasized the importance of expanding the use of propane to maintain affordable home energy amidst the rising costs of essential goods and services. Watt expressed the readiness of the propane industry to collaborate with governments, ensuring that Atlantic Canadians can fully benefit from the advantages of propane as a clean and cost-effective energy solution.