Canada has introduced a new biofuel production incentive in response to trade disruptions and tariffs. Image source: Pixabay
The Canadian government has introduced a new biofuel production incentive to assist the country’s canola and other agricultural producers in response to trade disruptions and tariffs, Biodiesel Magazine reported.
Announced on 5 September, the amendment to the country’s Clean Fuel Regulations would support the domestic biofuels industry, the 9 September report said.
The biofuel-related measures are part of a wider effort launched by Canadian Prime Minster Mark Carney to protect, build and transform Canadian strategic industries that have been most impacted by US tariffs and trade disruptions, Biodiesel Magazine wrote.
In a notice announcing plans for the new Biofuel Production Incentive (BPI), the Canadian government noted that its domestic biofuel producers were at risk due to new changes in subsidies and policy and, as a result of those changes, many Canadian facilities were idling or shutting down.
“The loss of this sector would deepen Canada’s reliance on imports from the United States and dampen demand for domestic agricultural feedstocks like canola,” the government was reported as saying.
In response to the challenges, the government said it would immediately introduce new biofuel production incentives providing more than C$370M (US$267M) over two years to help domestic producers and restructure their value chains.
The incentive would be provided on a per-litre basis to Canadian producers of biodiesel and renewable diesel and would be available from January 2026 until December 2027 for up to 300M litres (79.25M gallons)/facility, the report said.
To level the playing field and provide support for Canada’s biofuel sector, the government also said it planned 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.
Welcoming the move, Jeremy Baines, CEO of Canadian renewable diesel producer Tidewater Renewables, was quoted as saying: “The measures … are expected to help support a competitive future for the Canadian renewable fuels industry.”
In addition, the government announced additional actions aimed at supporting canola producers, including increasing loan limits to C$500,000 (US$360,000) and investing in the AgriMarketing Program and trade diversification measures.
The AgriMarketing Program supports targeted activities to promote Canadian agri-food products as safe, sustainable and high quality.
The government said it planned to invest an additional C$75M (US$54M) in the programme over a five-year period.
For canola producers, the government said the increased funding would enhance resources to promote Canadian canola products.
For canola producers, the government said the increased funding would enhance resources to promote Canadian canola products.
However, in a joint on 5 September statement, the Canola Council of Canada (CCC) and Canadian Canola Growers Association (CCGA) said they were “disappointed” with the measures aimed at promoting the canola sector.
The measures fell short of what was required to support the industry at a time of “unprecedented trade disruption”, the organisations said.
While the industry was encouraged there would be some support for biofuel production, the BPI did not go far enough and would not drive meaningful additional domestic demand for canola, they added.