TIABC Voice of Tourism Newsletter – August 14, 2026

Did you know that Tesla has become one of the world’s largest corporate earners from regulatory carbon credits? Since 2017, the company has generated over $11 billion of pure profit from selling those credits.

For those unfamiliar with the carbon credit market, here is my highly simplified explanation. A carbon credit represents a reduction or removal of greenhouse gas emissions, typically measured as one tonne of carbon dioxide equivalent. Companies that need to meet regulatory requirements can purchase credits generated by companies or projects that reduce emissions. Like any other market, prices move based on supply and demand.

In principle, carbon credits are a pretty clever idea. They create an economic incentive for companies to reduce emissions, invest in cleaner technologies, or support projects that do. Whether a company is trying to reduce compliance costs or meet broader environmental commitments, the intention is the same: use economics to encourage better environmental outcomes.

I personally support a cleaner environment and generally support the mechanisms governments put in place to achieve climate goals. I say “generally” because every now and then a regulation sounds great when you say it out loud, looks even better in an infographic, and then runs headfirst into the realities of the marketplace.

Which brings me to BC’s Low Carbon Fuel Standard, or LCFS.

BC introduced low-carbon fuel requirements more than a decade ago with the goal of reducing the carbon intensity of transportation fuels. In 2024, BC became the only province in Canada to include aviation fuel, with low-carbon requirements beginning in 2026. Again, on paper, this makes sense.

The objective is to encourage the aviation industry to transition toward Sustainable Aviation Fuel, commonly known as SAF. SAF is widely viewed as one of the most important tools available to reduce aviation emissions, and Canada’s own aviation climate plans identify it as a critical part of reaching long-term emissions targets.

But, there’s a couple of big problems.

First, there is currently no commercially produced SAF in Canada, and the global supply that does exist is limited, expensive, and far from cost competitive. In other words, BC is imposing a compliance obligation on aviation before the fuel needed to meet that obligation is commercially available here or competitively accessible on the global market.

This is where this regulation begins to lose its credibility. 


The LCFS will add significant costs to flying by 2030. And somebody eventually pays those costs. For airlines, fuel is one of the largest operating expenses. That is true for the large national carriers, but it is especially important for regional airlines, helicopter operators, floatplane companies, charter services, and other smaller aviation businesses operating throughout BC. Add international volatility in fuel markets and then add BC-specific compliance costs, and the economics become increasingly difficult.

For tourism, the implications are enormous.

The first and most obvious impact is the cost of an airline ticket. Travellers are already extraordinarily price sensitive. When transportation costs rise, people change destinations, shorten trips, eliminate a connecting flight, or simply decide not to travel at all.

The impact goes much further than ticket prices. Millions of international and domestic visitors arrive in BC through our major gateways and then continue their journeys on regional airlines. Those regional connections are what get people to northern resorts, fishing lodges, remote communities, ski destinations, wilderness experiences, Indigenous tourism businesses, and countless other operators across this enormous province.

If the economics of a short-haul route stop working, an airline has choices. It can reduce frequency. It can increase fares. It can stop flying the route altogether. Or, when considering new service routes, it can put that aircraft somewhere else. Perhaps to our more cost-friendly neighbour, let’s say, Alberta.

We spend a great deal of time talking about attracting tourism investment to BC and growing our visitor economy. The Province’s own tourism strategy calls for significant growth over the next decade. Yet investors looking at a new resort, lodge, attraction, or tourism development also look at how visitors are going to get there.

A spectacular destination that becomes prohibitively expensive or difficult to reach is a tougher investment proposition.These are not aviation problems sitting neatly in an aviation box. They ripple through the entire tourism economy.

And that brings me back to Tesla and to the second ‘big’ problem about the current iteration of the LCFS.

When an airline or fuel supplier cannot meet the standard because commercially produced SAF is unavailable, the regulation requires it to pay a penalty and/or purchase carbon credits. The problem is that there is currently no direct connection between those compliance costs and SAF production, in Canada or elsewhere. Those dollars may support other emissions-reduction activities, but they do nothing to increase the supply of the commercially available, competitively priced SAF the aviation sector actually needs.

That is the disconnect. The environmental objective is right. The pathway to achieving it needs work.

TIABC is working with our aviation members and tourism operator partners to bring this issue forward and look for practical solutions. There is broad agreement that SAF needs to be part of aviation’s future. The question is how we create the time, investment conditions, domestic production, and competitive supply necessary to make that transition possible.

If the BC government is serious about reducing emissions and equally serious about growing tourism revenues, then these objectives cannot operate independently of one another. We need environmental policy that actually accelerates the environmental solution we are trying to create. We also need economic policy that recognizes the realities of operating airlines, maintaining regional connectivity, and competing for visitors and investment.

If our airlines and operators are paying more and we still are not producing more SAF, we may just be helping Tesla have another very good quarter.

Amber Papou, B.Ed, MBA, ICD.D

CEO, TIABC