Canada’s Biofuels Strategy

In June, the Canadian Senate passed Bill C-33, which gives the federal government authority to regulate the blending of conventional and renewable fuels.  Essentially, it mandates five per cent ethanol content in Canada's gasoline supply by 2010 and two per cent renewable content in diesel fuel by 2012.

Bill C-33 is complemented by two financial incentive programs: ecoEnergy for Biofuels Initiative and ecoAgriculture Biofuels Capital Initiative.

EcoEnergy for Biofuels Initiative supports the production of renewable alternatives to conventional gasoline and diesel and encourages the development of a competitive domestic industry for renewable fuels.  Between 2008 and 2017, the program will invest $1.5 billion to assist businesses increase production of renewable fuels such as ethanol and biodiesel.

EcoAGRICULTURE Biofuels Capital Initiative will invest $200 million from 2007 through 2012 to provide repayable capital, of up to $25 million per project, to assist farmers in constructing or expanding biofuel production facilities.  Contributions are repayable over four years with payouts based on producers' contributions.  To date, four projects have received a total of $34.6 million from this program.

The federal government has also created the $500-million NextGen Biofuels Fund, managed by Sustainable Development Technology Canada (SDTS), a non-profit foundation.  The fund supports commercial-scale demonstration facilities for producing next-generation renewable fuels such as cellulosic ethanol and biodiesel.