The $1.5 billion ecoENERGY for Biofuels Program, announced on July 5, 2007, is an important component of the Government of Canada’s Renewable Fuels Strategy. This nine-year Program supports the production of renewable alternatives to gasoline and diesel and encourages the development of a competitive domestic industry for renewable fuels. It makes investment in production plants and facilities more attractive by partially offsetting the risk associated with fluctuating feedstock and fuel prices.
The Program provides an operating incentive – based on production/sales levels – to producers of renewable alternatives to gasoline and diesel produced in Canada.
How does the Program work?
In accordance with Program parameters and subject to funding availability, the ecoENERGY for Biofuels Program enters into non-repayable Contribution Agreements with successful recipients meeting the Program's criteria.
Payment of an operating incentive is made only to recipients who have signed a Contribution Agreement with Natural Resources Canada (NRCan) and have completed an environmental assessment to the satisfaction of a federal authority. The operating incentive is provided on a per litre basis, based on volume of renewable fuels produced in Canada and sold by such recipients, and as agreed upon in the Contribution Agreement. The number of litres for which a recipient can claim under ecoENERGY for Biofuels is determined by NRCan according to Program parameters.
Incentive rates 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.
Incentives are provided on a monthly or quarterly basis. Recipients will select the payment frequency that best suits their needs.
What are the Program parameters?
Program parameters are defined as follows:
- Up to $1.5 billion is available over nine years
- An amount of $500 million is reserved for projects producing renewable alternatives to diesel. This reserve may be reduced or cancelled at any time should the need arise to do so. Funds will return to the Program.
- Operating incentives are provided only to recipients who have signed a Contribution Agreement with NRCan.
- Contribution Agreements are signed for up to seven consecutive years.
- No incentive will be provided beyond March 31, 2017.
- Facilities that have received capital incentives from other programs, such as the Ethanol Expansion program (EEP) and ecoAgriculture Biofuels Capital (ecoABC) can apply for this Program.
- Both existing and proposed facilities that produce renewable alternatives to gasoline and diesel in Canada can apply for this Program (facilities must be constructed before September 30, 2012).
- Existing producers are defined as those who will be producing by March 31, 2010, renewable alternative(s) to gasoline and/or diesel.
- New producers are defined as those who, although not producing by March 31, 2010, renewable alternative(s) to gasoline and/or diesel, are able to demonstrate an “advanced state of readiness” by March 31, 2010.
- The Program targets volume 2 billion litres of renewable alternatives to gasoline and 500 million litres of renewable alternatives to diesel. Eligible volumes accepted under the Program for any fiscal year will be subject to funding availability.
- A cap of 30 percent of the Program's 2 billion litre volume limit will apply to business organizations producing renewable alternatives to gasoline and a cap of 30 percent of the Program's $500 million funding reserve will apply to business organizations producing renewable alternatives to diesel. When an applicant is part of a business organization that owns more than one plant or facility, the applicant will also be required to refer to the overall nameplate capacity of the business organization in its application.
- Projects eligible for the incentive will be selected based on detailed Program criteria and subject to funding availability and fuel type.
What are the reporting requirements?
During the maximum seven-year period of the Contribution Agreement, a recipient must provide NRCan with the following documentation:
- Monthly/Quarterly Claims for Payment
- Six-Month Complimentary Information Spreadsheet
- Anticipated Eligible Sales
- Annual Audited Financial Statements
- Special Purposes Report (annually)
- Complimentary Environmental Performance (annually)
- Note from the Auditor (annually)
What are the requirements of the Canadian Environmental Assessment Act?
Pursuant to the Canadian Environmental Assessment Act (CEAA), NRCan is required to ensure that a federal environmental assessment for the plant or facility is carried out and a positive decision is rendered, before funds can be released to the project.
For more information please visit the Environmental Assessments section.