ecoEBF - Background

What is Canada's renewable fuels strategy?

Canada's renewable fuels strategy comprises four key elements:

  • Federal Regulation – Proposed federal regulation requiring renewable fuels content in gasoline, diesel and heating oil – led by Environment Canada (EC);
  • ecoAgriculture Biofuels Capital Initiative (ecoABC) and Biofuels Opportunities for Producers Initiative (BOPI) – Assistance for farmers to seize new opportunities in biofuels production – led by Agriculture and Agri-Food Canada (AAFC);
  • NextGen Biofuels FundTM – Support for establishing large-scale demonstration facilities for the production of next-generation biofuels – managed by Sustainable Development Technology Canada (SDTC). SDTC is an arm's-length foundation created by the Government of Canada;
  • ecoENERGY for Biofuels – Operating incentives to stimulate domestic biofuels production – led by Natural Resources Canada (NRCan).

ecoENERGY for Biofuels will support meeting the regulated demand by facilitating and encouraging domestic production of renewable fuels. The Program will provide up to $1.5 billion over nine years towards an operating incentive, based on production/sales volumes, to producers of renewable alternatives to gasoline, such as ethanol, and renewable alternatives to diesel, such as biodiesel. Incentive payments will be paid on a per litre basis based on Incentive Rates that are fixed and will start at $0.10/L for renewable alternatives to gasoline and $0.26/L for renewable alternatives to diesel and decline over the life of the Program.

How does ecoENERGY for Biofuels work with other Government of Canada Programs?

In December 2006, the Government of Canada announced its intent to develop federal regulations on renewable fuels. These proposed regulations will require five percent renewable fuel content based on the gasoline pool by 2010, and two percent renewable fuel content in diesel and heating oil by 2011 or sooner upon successful demonstration of renewable diesel fuel use under the range of Canadian conditions. These new regulations are expected to require close to 3 billion litres of renewable fuels by 2011. ecoENERGY for Biofuels will support meeting the regulated demand by facilitating and encouraging domestic production of renewable fuels.

The ecoENERGY for Biofuels Program is a key component of the Government of Canada's comprehensive strategy to support the expansion of Canadian production of renewable fuels.

The ecoENERGY for Biofuels program also complements the $200 million ecoAgriculture Biofuels Capital (ecoABC) program, which provides capital funds to new plants based on the level of farmer ownership.

The federal government has also announced the $500 million NextGen Biofuels FundTM, managed by Sustainable Development Technology Canada (SDTC). The Fund will invest, over eight years, in first-of-kind large-scale demonstration next-generation renewable fuel production facilities. This Fund will jumpstart the development and production of the next-generation of renewable fuels in Canada.