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2010/71 (a)

Backgrounder

ecoENERGY for Biofuels


Increasing the use of cleaner, renewable energy is an important part of the Government of Canada’s comprehensive strategy to reduce emissions of air pollutants and greenhouse gases, helping to protect the health of Canadians and our environment.

The Government of Canada is investing up to $1.5 billion to increase the supply and availability of cleaner, renewable fuels such as ethanol and biodiesel. In fact, as of September 2010, regulations will now require five percent renewable fuel content based on the national gasoline pool. The Government of Canada also intends to regulate a two per cent requirement for renewable content in diesel fuel and heating oil by 2011, subject to successful demonstration of technical feasibility under the range of Canadian conditions.

To meet these requirements, it is expected that Canada will need close to three billion litres of renewable fuels by 2012. The ecoENERGY for Biofuels initiative will help reach this target by providing operating incentives to encourage greater production of renewable fuels.

Compared to gasoline, grain-based ethanol can reduce greenhouse gas (GHG) emissions by up to 40 percent on a life-cycle basis. The GHG reduction for biodiesel can be as much as 60 percent. The coming regulation for renewable content in gasoline alone could reduce Canada’s annual GHG emissions by four million tonnes.

The Government of Canada has also provided $500 million to Sustainable Development Technology Canada (SDTC) to create the NextGen Biofuels Fund. SDTC will invest these funds in first-of-kind, large-scale demonstration projects of next-generation biofuel technologies — technologies that produce cleaner fuels from wheat straw, wood chips and other agricultural and forest by-products.

Program Benefits

In addition to helping to protect our environment, by encouraging greater production of biofuels, ecoENERGY for Biofuels is helping to create new economic opportunities for Canada’s grain and oilseeds farmers and to strengthen the economic foundation of rural communities across the country.

By providing operating incentives to producers to ensure reasonable profit margins as the market for renewable fuels matures, ecoENERGY for Biofuels encourages private investment in biofuel production and supports the development of a strong, competitive renewable fuels industry in Canada.

ecoENERGY for Biofuels complements the ecoAgriculture Biofuels Capital Initiative and the Biofuels Opportunities for Producers Initiative. A total of $220 million is being made available through these initiatives to support the efforts of farmers to develop their own biofuel production facilities.

How It Works

Upon signing a Contribution Agreement, eligible producers of renewable alternatives to gasoline can receive an operating incentive of up to $0.19/L of eligible sales for the first year in the program, declining thereafter. Due to the less-established nature of the industry, producers of renewable alternatives to diesel are eligible for an incentive of up to $0.20/L of eligible sales for the first year in the program, declining thereafter.

Individual production facilities can receive the incentive for up to seven years.

For Additional Program Information

Visit the ecoENERGY for Biofuels Web site at
http://oee.nrcan.gc.ca/transportation/ecoenergy-biofuels/.


Media may contact:

Richard Walker
Director of Communications
Office of the Minister
Natural Resources Canada
Ottawa
613-996-2007

or

Media Relations
Natural Resources Canada
Ottawa
613-992-4447

NRCan's news releases and backgrounders are available at www.nrcan.gc.ca/media/index-eng.php.