Improving Energy Performance in Canada – Report to Parliament Under the Energy Efficiency Act For the Fiscal Year 2009-2010

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Chapter 2 Equipment, Standards and Labelling

Introduction

Natural Resources Canada’s (NRCan’s) wide range of energy efficiency initiatives includes standards and labelling programs that are based on the requirements of Canada’s Energy Efficiency Regulations (the Regulations).

The Energy Efficiency Act (the Act) of 1992 gives the Government of Canada the authority to make and enforce regulations that prescribe standards and labelling requirements for energy-using products that are imported to Canada or shipped across provincial borders for lease or sale. The Act was amended in 2009, making it possible to prescribe standards not only for more products that use energy but also for products, such as thermostats, that affect energy use. The Regulations came into effect in February 1995, after extensive consultations with provincial governments, affected industries, utilities, environmental groups and others. Since then, the Regulations have been amended a number of times.

Regulations have now been established for more than 40 products, including major household appliances, water heaters, heating and air-conditioning equipment, automatic icemakers, dehumidifiers, dry-type transformers, electric motors, commercial refrigeration and some lighting products. The Regulations apply to these products even if they are incorporated in a larger unit or machine that is not regulated.

The performance standards contained in the Regulations and accompanying labelling requirements and programs make a major contribution to the Government of Canada’s Clean Air Regulatory Agenda. In October 2006, a notice of intent was published for amending the Regulations to prescribe standards for 20 new products and increase the stringency of existing standards for 10 products by 2010. When all the standards are implemented, there will be a standard in place for products that use 80 percent of the energy consumed in the residential and commercial/institutional sectors.

NRCan regularly amends the Regulations to strengthen the minimum energy performance requirements for prescribed products when the market has achieved a higher level of efficiency. The Regulations are also amended to add new products, harmonize minimum energy performance requirements with those of other jurisdictions and update testing methodologies and labelling requirements.

In addition, regulations can be established for gathering market data on the energy performance of certain types of equipment. For example, the data gathered for gas fireplaces are used to support programs developed by the industry and NRCan and its partners for gas fireplace performance.

Before amending the Regulations, NRCan conducts studies to determine how the proposed change will affect the market. A key criterion for amending the Regulations is that the change must have a significant positive impact on consumers and the environment. Stakeholders are consulted on all proposed changes to the Act and the Regulations, as well as on their practical application in the marketplace.

The Act and the Regulations also support labelling initiatives. These initiatives are designed to help consumers and the commercial/industrial procurement community identify and purchase energy-efficient equipment that will save them money and reduce greenhouse gas (GHG) emissions over the life of the product.

The Act and the Regulations require that a comparative EnerGuide label be displayed on major electrical household appliances and room air conditioners or, as in the case of the newly implemented requirement for light bulb labelling, on the product packaging. The EnerGuide label shows the energy performance of the product and compares it with the most and least efficient models of the same class and size.

The EnerGuide label is also used voluntarily by manufacturers and suppliers of residential oil and gas furnaces, vented gas fireplaces, central air conditioners and air-to-air heat pumps. In this case, the EnerGuide rating for a specific product is published on the back page of the manufacturer’s brochure. These ratings include the annual fuel utilization efficiency rating for oil and gas furnaces, the fireplace efficiency rating for gas fireplaces and the seasonal energy efficiency ratio for central air conditioners.

The ENERGY STAR^® Initiative in Canada works with and complements the Regulations and comparative EnerGuide label. The internationally recognized ENERGY STAR symbol is a simple way for consumers to identify products that are among the most energy-efficient on the market.

Products that are prescribed in the Regulations and are also part of ENERGY STAR must meet levels of energy efficiency significantly above the minimum performance levels set out in the Regulations to qualify for the ENERGY STAR symbol. As higher-performance products penetrate the market, their efficiency levels trigger the development of new minimum energy performance standards.

Standards

As a world leader in the use of energy efficiency standards, NRCan is committed to harmonizing standards and labelling requirements with those developed in other jurisdictions. Harmonization reduces barriers to trade and sustainable development by improving the flow of energy-efficient products within Canada and around the world. This practice minimizes the regulatory burden on manufacturers and avoids confusion for consumers.

For example, the performance requirements in the Regulations are similar to those in the five Canadian provinces that currently regulate energy-using equipment manufactured and sold within their borders. This alignment is achieved because governments support and participate in the development of national, consensus-based performance standards by accredited standards-writing organizations, such as the Canadian Standards Association.

Such standards include testing procedures that are used to determine a product’s energy performance and are usually referenced federally and provincially. NRCan works closely with provinces throughout the regulatory process to ensure that the federal and provincial standards regimes are harmonized to the maximum extent possible.

Because the North American market is highly integrated, Canada’s energy performance requirements for many products are strongly aligned with regulations in the United States.

Canada is an active participant in international and regional forums, such as the Security and Prosperity Partnership of North America, involving the United States and Mexico, and the Asia-Pacific Partnership on Clean Development and Climate. Both of these efforts contribute to regional co-operation on harmonization issues. Trade and investment liberalization and facilitation are high on the agenda of these working groups.

NRCan is also involved with the International Energy Agency’s Efficient Electrical End-use Equipment (4E) initiative that facilitates co-operation among various Organisation for Economic Co-Operation and Development (OECD) countries on specific projects. Canada is participating in a mapping and benchmarking study as well as one on standby power.

Compliance and Enforcement

The Regulations outline a number of responsibilities for dealers who import to Canada, or ship from one Canadian province to another, any prescribed energy-using product. NRCan is committed to securing voluntary compliance but can use enforcement measures when necessary.

NRCan emphasizes self-monitoring, reporting, voluntary compliance and collaboration. However, the Act prescribes specific enforcement measures when dealers violate the law.

Enforcement activities include preventing the importation of non-compliant products to Canada, preventing the sale or lease of non-compliant products in Canada and imposing fines. Violators can also be fined under the Administrative Monetary Penalty System of the Canada Border Services Agency for not providing required information on the prescribed product at the time of import; serious violations can be prosecuted.

To monitor compliance with the Regulations, NRCan captures information from energy efficiency reports and import documents. Section 5 of the Act requires dealers to provide energy efficiency reports when they market a new product model. The required information includes the energy performance of each model, the name of the testing agency and the size category, as described in Schedule IV of the Regulations.

The Regulations require that when importing a regulated product into Canada, dealers provide specific product information on customs documents for all shipments (i.e. type of product, brand name, model number, address of dealer and purpose of import). A customs document contains less information than an energy efficiency report, but there is enough to allow NRCan to verify that there is a matching energy efficiency report. NRCan can then confirm that all products entering Canada meet the required energy performance levels and can take action when necessary.

NRCan processed more than 1 493 214 records (records from April 1, 2009, to March 31, 2010) relating to the importation of regulated energy-using products to Canada in 2009–2010.

Figure 2-1 illustrates the volume of import documents received, in paper form and electronically, per month during the 2009–2010 fiscal year.

More than 1 824 516 new or revised model numbers were submitted to NRCan for entry into NRCan’s equipment database (records from April 1, 2009, to March 31, 2010) from dealers’ energy efficiency reports.

Regulatory Impact to Date From the Regulatory Impact Analysis Statement

In preparing amendments to the Regulations, NRCan analyses the impact of the proposed amendment on society, the economy and the environment. This information is made available through the Regulatory Impact Analysis Statement, which is annexed to the Regulations and published in the Canada Gazette, Part II.

It is estimated that Canada’s energy performance standards from the 10 amendments would cause a reduction of 26 megatonnes (Mt) in aggregate annual emissions by 2010 (see Table 2-1).

TABLE 2-1
Estimated Impact of Energy Efficiency Regulations, 2010 and 2020 (Aggregate Annual Savings)

Product (amendment number in brackets)	Energy savings (PJ)		CO2 reductions (Mt)
	2010	2020	2010	2020
Residential appliances (1)	117.20	133.84	13.26	15.60
Lamps – fluorescent/incandescent (2)	11.60	13.40	7.55	9.80
Motors (3)	16.30	17.70	2.03	2.14
Commercial HVAC (4)	6.40	7.50	0.43	0.57
Refrigerators (5)	4.92	10.96	0.49*	1.10*
Ballast/room A/C, PAR lamps (6)	3.96	9.44	0.39*	0.94*
Clothes washers, domestic hot water, exit signs, chillers (8)	16.20	42.67	1.29	3.61
A/C, commercial refrigeration (9)	1.57	5.35	0.16	0.53
General service lighting, commercial and industrial gas unit heaters, traffic and pedestrian signals, ceiling fan lighting, torchiere lamps, commercial clothes washers, residential wine chillers, commercial ice-makers, residential dishwashers, residential dehumifiers, residential gas furnaces (10)	6.09	88.10	0.40	9.67
Total	184.24	328.96	26.00	43.96

* Values are different from Regulatory Impact Analysis Statement due to a change in the emission factor to 99.3.

Labelling and Promotion

Since 1978, the EnerGuide label (see Figure 2-2) has given Canadians an opportunity to compare the energy consumption of appliances. In 1995, with the introduction of the Regulations, placing an EnerGuide label on major electrical household appliances and room air conditioners became mandatory. The label on a product shows how much energy a product uses, allowing the customer to consider the most energy-efficient choice.

EnerGuide directories that list energy ratings for major appliances and room air conditioners are published annually. They are distributed to consumers, retailers and appliance salespeople. In fulfilling requests for information, electric utilities and provincial governments also distribute the directories. Online directories for all appliances and heating and cooling equipment are published on the Web site of the Office of Energy Efficiency (OEE) and updated monthly.

A voluntary EnerGuide rating program was established in 1997 and included gas furnaces, central air conditioners, heat pumps and oil furnaces. In the fall of 2003, gas fireplaces were added to the EnerGuide rating program, and manufacturers were asked to include EnerGuide ratings for fireplace efficiency in their brochures. These changes coincided with the mandatory requirement in the Regulations to test, verify and report on fireplace efficiency.

Major distributors of these products for sale in Canada report the verified energy performance rating of their products, as tested against the standards in the Regulations. In addition, participants in the voluntary EnerGuide rating program must provide shipment data and aggregate energy efficiency information to track the progress of the program and identify marketplace improvements that can result from labelling.

Given that the equipment products listed above are typically purchased from a brochure or catalogue, a consumer would probably not read the EnerGuide label before making a decision to buy. Accordingly, manufacturers are encouraged to include an EnerGuide rating in product brochures and catalogues, so consumers can compare the efficiency of products when they are in the buying process. To date, manufacturers of 85 percent of eligible products on the market voluntarily participate in the EnerGuide rating program and publish the ratings in their brochures.

Regularly conducted polls indicate that more than 50 percent of Canadians surveyed are aware of the EnerGuide label.

In 2001, responding to public interest in a labelling system that identifies the best performers, Canada officially introduced ENERGY STAR, the international symbol for energy efficiency (see Figure 2-3). Canada signed an agreement with the U.S. Environmental Protection Agency and the U.S. Department of Energy. The OEE is the custodian of the program for Canada. Canada joins other international ENERGY STAR program participants: Australia; New Zealand; Japan; Taiwan; and the European Union, which adopted ENERGY STAR for office equipment.

ENERGY STAR establishes high efficiency criteria and levels for selected products for the residential and commercial sectors. Product categories are selected on the basis of their technical potential for high efficiency. This is a voluntary program. However, organizations must demonstrate that products meet the eligibility criteria and performance levels. For appliances and heating and cooling products, the criteria are based on the same test standards as those applied under the Regulations. Canada promotes specific product categories for which levels and criteria can be harmonized with those of the United States, including the following:

• major electrical appliances
• heating, cooling and ventilation
• consumer electronics
• office equipment
• windows, doors and skylights (Canadian levels)
• selected lighting products – compact fluorescent lamps (CFLs), fixtures, decorative light systems and solid-state lighting
• selected commercial equipment, including commercial refrigeration products

Canada has also integrated ENERGY STAR with the EnerGuide label for qualified major appliances and room air conditioners, to help consumers identify the best-performing products. While the EnerGuide label shows how much energy a product uses under normal conditions in one year, the ENERGY STAR symbol on the label identifies the most energy-efficient product. Now that industry-accepted standards of high efficiency have been established, ENERGY STAR has become the criterion to meet for incentive and rebate programs.

ENERGY STAR is used as the basis for incentives by many electrical and gas utilities across Canada. For example, Hydro-Québec promotes ENERGY STAR qualified refrigerators, freezers, clothes washers and CFLs as part of its Mieux Consommer program and provides incentives for these product categories. Enbridge Gas developed an incentive program around ENERGY STAR qualified tankless water heaters, and Manitoba Hydro ran an aggressive incentive program for ENERGY STAR qualified commercial kitchen equipment.

ENERGY STAR is also the qualifying criterion for sales tax exemptions in British Columbia for heating and cooling equipment, in Saskatchewan for the purchase of furnaces and boilers, and in Ontario for ENERGY STAR qualified geothermal heating equipment. Organizations across Canada have used ENERGY STAR as a campaign driver to promote replacement with, or purchase of, higher efficiency products.

Continuous promotion of ENERGY STAR qualified appliances has paid off. Industry statistics for 2008 show an increase in market penetration from almost nil in 1999 to 53 percent for refrigerators, 64 percent for clothes washers and 89 percent for dishwashers (see Figure 2-4). The increase in market penetration indicates growing acceptance of ENERGY STAR as the brand for high energy efficiency and manufacturers’ willingness to raise the efficiency of their products to qualifying levels.

ENERGY STAR specifications and levels are periodically updated as product saturation is reached, to encourage industry to strive for more efficient products and thus maintain the relevance and credibility of the brand.

ENERGY STAR is also well known in the commercial sector, with criteria for products ranging from office equipment to vending machines. NRCan supports demonstration projects to validate the savings and other benefits of some of these products and to address barriers to their widespread acceptance.

Canada continues to promote ENERGY STAR guidelines in its contacts with the procurement community. It has updated an interactive cost calculator that compares energy cost savings and GHG emissions reductions associated with the purchase of ENERGY STAR qualified products.Workshops were held across Canada to make governments and institutions aware of the ENERGY STAR criteria and procurement tools.

Canada is also working with housing agencies to help them identify energy savings in their properties and to specify ENERGY STAR qualified products for replacement equipment.

Canada continues to expand the range of product types included in its ENERGY STAR agreement. Canada led the way in the development of a technical specification for decorative light strings (also known as Christmas lights) and implemented this specification for Canada. In addition, Canada recently included fixtures, solid state lighting and external power supplies in its agreement with the Government of the United States. Finally, Canada developed an ENERGY STAR specification for heat recovery ventilators.

NRCan developed a rating and labelling system for efficient refrigeration applications in ice and curling rinks under the name CoolSolution.⁶ An ice rink application is qualified CoolSolution if it achieves a rating higher than 50 percent. An incentive program to encourage the adoption of CoolSolution and reduce the initial payback of the first applications started in November 2006. Partnerships to accelerate the program have been successful.

CoolSolution designates innovative technologies and practices and consists of three main elements:

• heat recovery from the refrigeration system to meet all the building’s heating requirements (e.g. hot air, hot water) or to export this energy for other purposes
  
  
• adaptation to the Canadian climate by taking advantage of the naturally occurring cold temperatures. This is done by varying the temperature of the heat released into the environment according to the outdoor temperature.
  
  
• reduction of the synthetic refrigerant charges of the refrigeration system, which have a serious adverse impact on climate change. This is done by using natural refrigerants or by confining the synthetic refrigerant to the mechanical room and using environmentally friendly fluids to remove and distribute heat.

ecoENERGY for Equipment

Objective

To exclude the least efficient energy-using equipment from the market and to influence consumers to select – and manufacturers to produce – energy-efficient products that perform above minimum standards.

Description

The ecoENERGY for Equipment program is focused on accelerating the introduction of energy-efficient products in Canada’s equipment stock. The program implements minimum energy efficiency performance standards that restrict the importation and interprovincial shipment of the least efficient products for sale in Canada. It also carries out initiatives to increase the market share of more efficient products.

ecoENERGY for Equipment also supports labelling programs that encourage the introduction of more efficient technologies. This involves the establishment and promotion of high-efficiency performance criteria, such as ENERGY STAR, and the engagement of stakeholders to promote products that meet these criteria. As products are adopted in the marketplace, the ENERGY STAR or equivalent performance level will become the basis for new, more stringent standards.

In addition, ecoENERGY for Equipment maintains a multilayered compliance and enforcement program to ensure that products meet prescribed standards and to ensure that other regulatory requirements, such as labelling, are met.

Program components include the following:

• regulations under the Energy Efficiency Act (the Act) requiring dealers to ship only products that meet the prescribed energy efficiency standards
  
  
• the EnerGuide program, which rates and labels the energy efficiency of major household electrical appliances and heating, ventilating and air-conditioning equipment, assisting consumers in making energy-wise purchases
  
  
• the ENERGY STAR high efficiency program, which is an international initiative that identifies the most energy-efficient products in their class

Key 2009-2010 Achievements

• Amended the Energy Efficiency Act in September 2009, allowing for energy efficiency standards to be set for products that affect energy consumption, including windows and doors, as well as thermostats and other energy-system control devices. The amendment also clarified the authority to prescribe standards for classes of products that may be based on common energy-using characteristics. For example, a standard for all products that consume electricity in standby mode (when the product is turned off) could be prescribed by using the powers clarified in the amended Act.
  
  
• Since 2008, seven new product standards and four more stringent standards have been implemented.
  
  
• In fiscal year 2009–2010, ENERGY STAR criteria were developed for five new products, and eight existing criteria were revised. Two hundred and sixty-five companies joined the ENERGY STAR Initiative in Canada for a total of 1135 participants.
  
  
• Conducted the analysis and consultation necessary to pre-publish Amendment 11 to the Energy Efficiency Regulations. Amendment 11 includes standards for six previously unregulated products and increases in the stringency of the existing standards for eight products.
  
  
• Delivered five specialized workshops on the use of the ENERGY STAR calculator to the procurement and institutional community.

For more information:
oee.nrcan.gc.ca/residential/energystar-energuide-r2000.cfm?attr=0

regulations.nrcan.gc.ca

⁶ CoolSolution is an official mark of Her Majesty the Queen in the Right of Canada as represented by the Minister of Natural Resources.

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