Canada will soon have new rules for clean fuel. Here's what they'll cost when you fill up

As the calendar flips to July, a long-awaited federal policy will kick in aimed at cutting the amount of pollution from cars and trucks, while trying to keep prices at the pump affordable.

The clean fuel regulations were first proposed in 2016, but they've faced delays and revisions along the way.

Although the new policy faces political opposition, it has received support from several environmental groups. Industry likes it, too.

"I want to reassure Canadians that it is a good policy, it is a good regulation, it will deliver significant [emission] reductions," said Bob Larocque, president and CEO of the Canadian Fuels Association, which represents companies that process crude oil and bring products to the market.

There won't be much of a change to pump prices across the country on July 1, experts say, although there will be a noticeable increase several years down the road.

That's in addition to existing provincial and federal taxes on fuel, which are likely to entice more drivers to make the switch to electric vehicles.

The price impacts of the regulations will largely be based on how refineries and the fuel industry decide to comply, which experts say remains a big unknown. 

The clean fuel standard kicks in on Canada Day, but the requirements to comply are relatively easy for refiners and fuel importers.

Add in the fact that many provinces already have clean fuel or fuel-blending regulations in place, and experts aren't predicting an immediate change to pump prices.

"The policy has a pretty soft start because what it's requiring is to some extent even less than what is actually being required of other pre-existing policies," said Michael Wolinetz, a partner at Vancouver-based Navius Research, which provides consulting services on energy and the environment.

"We're not expecting the policy to have any real bite until around 2025."

One of the reasons industry likes the policy is because the federal government isn't mandating a specific method to reduce pollution from the transportation sector, but instead leaves it largely up to individual companies to choose how they want to comply.

Companies have to achieve carbon emission reduction targets each year by earning credits through improvements to production facilities (such as building a carbon capture and storage facility at a refinery), lowering the carbon intensity of the actual fuel (by adding more ethanol, for instance) and by offering electric vehicle charging and hydrogen vehicle fuelling.

There's also a credit trading system that allows companies to spend money to comply.