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The Government of Canada has a four-pronged biofuels strategy in order to:
- reduce the greenhouse gas (GHG) emissions resulting from fuel use,
- encourage greater production of biofuels,
- accelerate the commercialization of new biofuel technologies, and
- provide new market opportunities for agricultural producers and rural communities.
The Government of Canada is investing up to $1.5 billion through the ecoENERGY for Biofuels program to increase the supply and availability of cleaner, renewable fuels such as ethanol and biodiesel.
As of December 2010, regulations now require five percent renewable fuel content in gasoline. The Government of Canada also implemented a two percent requirement for renewable content in diesel fuel and heating distillate oil, which came into force July 1, 2011.
To meet these requirements, it is expected that Canada will need close to three billion litres of renewable fuels annually after 2012. The ecoENERGY for Biofuels program is helping reach this target by providing operating incentives to encourage greater production of renewable fuels.
When fully implemented, the two regulatory requirements combined with provincial regulations will reduce greenhouse gas (GHG) emissions by up to about four megatonnes in 2012 – about the equivalent of taking one million vehicles off the road. Compared to gasoline, grain-based ethanol can reduce GHG emissions by up to 50 percent on a life-cycle basis. The GHG reduction for biodiesel can be more than 80 percent.
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 feedstocks such as wheat straw, wood chips and other agricultural and forest by-products.
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 $0.10/L of eligible sales for the first year in the program. Due to the less-established nature of the industry, producers of renewable alternatives to diesel are eligible for an incentive of up to $0.26/L of eligible sales for the first year in the program. These incentives will decline in the ensuing years.
Individual production facilities can receive the incentive for up to seven years.
The deadline for submitting applications to the program was March 31, 2010. The program is no longer accepting applications.
For Additional Program Information visit the ecoENERGY for Biofuels Web site at:
Media may contact:
Director of Communications
Office of the Minister
Natural Resources Canada
Natural Resources Canada
NRCan’s news releases and backgrounders are available at www.nrcan.gc.ca/media.
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