Canada Introduces New Biofuel Production Incentive in Response to Trade Disruptions, Tariffs

by Erin Krueger (Biodiesel Magazine) The Canadian government on Sept. 5 announced it is taking action to assist the country’s canola and agriculture producers by introducing a new biofuel production incentive and amending the country’s Clean Fuel Regulations to support the domestic biofuels industry.

The biofuel-related measures are part of a larger effort launched by Canadian Prime Minster Mark Carney on Sept. 5 to protect, build and transform Canadian strategic industries that have been most impacted by U.S. tariffs and trade disruptions.

In response to these challenges, the Canadian government will immediately introduce new biofuel production incentives that will provide more than $370 million over two years to help domestic producers and restructure their value chains. The incentive will be provided on a per-liter basis to Canadian producers of biodiesel and renewable diesel and will be available from January 2026 through December 2027 for up to 300 million liters (79.25 million gallons) per facility. Natural Resources Canada will provide additional details about the program in the coming weeks.

To level the playing field and provide support for Canada’s biofuel sector, the governmental also said it intends to make targeted amendments to the Clean Fuel Regulations to introduce a time-limited production incentive for renewable diesel and biodiesel producers and work with provinces and territories to explore complementary measures.

In addition, the government announced additional actions aimed at supporting canola producers, including increasing loan limits to $500,000 and investing in AgriMarketing and trade diversification measures. The AgriMarketing Program supports targeted activities to promote Canadian agri-food products as safe, sustainable and high quality. The government plans to invest an additional $75 million in the program over a five-year period. For canola producers, the government said the increased funding will enhance resources to promote the unique quality, versatility and sustainability of Canadian canola products, helping them stand out in competitive new markets and build resilient export pathways.

The Canadian government also announced improvements to its Advanced Payments Program, which provides Canadian farmers with low-interest cash advances of up to 50% of the expected market value for eligible products.

Canadian renewable diesel producers Tidewater Renewables Ltd. applauded the announcing of a new biofuels production incentive and other support for the Canadian biofuels sector.

Additional information on the new strategic measures is available on the government of Canada website. READ MORE

Excerpt from Advanced Biofuels Canada/EIN Presswire: Advanced Biofuels Canada Association (ABFC) welcomes today’s announcement by the government of Canada that introduces a per-litre production credit and proposes targeted changes to the Clean Fuel Regulations, providing tangible support for Canadian-produced clean fuels.

“Canada is at a critical crossroads,” said Fred Ghatala, President of ABFC. “The U.S. Inflation Reduction Act (IRA) has reshaped global energy markets and created a systemic imbalance, leaving Canadian producers at a severe competitive disadvantage, even in our own domestic marketplace. Today’s announcement is welcome. It gives our domestic biofuels sector the chance not only to compete, but to grow.

This new program will help restore competitiveness for domestic producers, enabling facilities to restart operations and expand capacity, and will shore up struggling feedstock markets. The clean fuels sector continues to prove it can deliver on government priorities. At full production, Canadian biorefineries contribute $19.8 billion to the Canadian economy. With the right fiscal and policy signals, Canada’s biofuels sector, already supporting over 30,000 jobs, can by 2030 expand production to generate $44.4 billion in economic output and sustain more than 60,000 jobs.

Biofuels support Canadian farmers by turning crops like canola into clean fuels to reinforce energy security, de-risk global trade headwinds, and drive clean energy investments. Biofuels connect rural fields to urban fuels, supporting Canadian farmers while building a sustainable economic and energy future for all Canadians.”

Since the July 2022 IRA announcement, ABFC has worked closely with the government and advocated for this much-needed program. ABFC will continue to provide data and analysis to support informed, evidence-based decision-making. Today’s announcement can be viewed on the Prime Minister’s website. ABFC will provide program updates on its website as details become available.

Advanced Biofuels Canada Association (ABFC) is the national industry voice for producers, distributors, and technology providers for advanced biofuels and renewable synthetic fuels. ABFC members produce a portfolio of liquid low-carbon fuels (including sustainable aviation fuel, or SAF), sustainable feedstocks, intermediary products, and produce/consume low carbon gaseous products, such as renewable natural gas (RNG) and low carbon hydrogen. Our members operate over 32 billion litres of low carbon fuel production capacity globally and are significant suppliers to renewable and low carbon fuel in Canada, and worldwide.

For more information on Advanced Biofuels Canada and our members, visit www.advancedbiofuels.ca. READ MORE