Canadian Gov't Funds $1.5B Biofuels Initiative

December 10, 2007 // Published as a news service by IHS

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The Canadian government is offering $1.5 billion in biofuel production incentives for an "ecoENERGY for Biofuels" initiative.

Under the initiative, the government of Canada will invest up to $1.5 billion over nine years in incentives to encourage private sector investment in biofuel production.

Producers of ethanol and other renewable alternatives to gasoline will be eligible for incentives of up to 10 cents per litre of production.

Biodiesel producers can receive incentives of up to 20 cents per litre for the first three years, according to Natural Resources Canada (NRCan).

Gasoline sold in Canada will require an average of 5% renewable content by 2010. Diesel fuel and heating oil will require an average of 2% renewable content by 2012, according to NRCan.

To meet those requirements, Canada needs three billion litres of renewable fuel a year, said NRCan. Canadian currently produces about 800 million litres per year.

The ecoENERGY for Biofuels initiative is one part of Canada's biofuels strategy, said NRCan.

In addition to regulating renewable content in gasoline and diesel fuel, the strategy also includes a $500 million investment in next-generation biofuel technologies.

Biofuel production is also receiving a boost through a $200 million "ecoAgriculture Biofuels Capital" incentive that is billed as allowing farmers to invest directly in the industry, said NRCan.

A $20 million "Biofuels Opportunities for Producers initiative" is designed to assist farmers and rural communities in seizing new market opportunities in the agricultural sector, said NRCan.

The biofuel production incentive program runs from April 1, 2008 to March 31, 2017 and is administered by Natural Resources Canada.

Details of the program including eligibility requirements and a description of the application process are available at http://ecoaction.gc.ca/biofuels.

Source: Natural Resources Canada (NRCan).