Tag: decarbonisation

Canada’s biofuel subsidies start as it tries to stay competitive with U.S.

This article was written by Kate Helmore and was published in the Globe & Mail on January 5, 2025.

Canola is harvested on a farm near Clandeboye, Man., in September. The beleaguered Canadian canola industry has faced a 75.8-per-cent duty on canola seed levied in August by China, the largest market for the crop.

Incentives are intended to keep Canada’s clean fuel competitive with U.S. imports

The first part of Ottawa’s strategy to boost biofuels and shore up domestic demand for canola came into force on Jan 1.

The $370-million Biofuel Production Incentive will be given to biofuel producers over the next two years. A fuel producer could receive a maximum of $40.2-million a year.

The subsidies are intended to keep Canada’s clean fuel competitive with U.S. imports, whose producers receive hefty tax credits. Ottawa’s payouts are also intended to shore up demand for the Canadian crops used as feedstock in clean fuel, especially beleaguered canola, which has faced a 75.8-per-cent duty on canola seed levied by Beijing since August. China is the largest market for Canadian canola seed.

The incentives are the first part of a two-stage strategy announced in September. Environment and Climate Change Canada is also reviewing its Clean Fuel Regulations (CFRs), with changes expected to come into force in about two years.

“This represents a significant undertaking by the federal government,” said Fred Ghatala, president of Advanced Biofuels Canada. “It represents a speed of action to put a necessary program in place and longer-term vision to have our sector transition from survival to thrive mode.”

Canada’s CFRs came into force in 2023. As part of the regulations, fuels that measure below the carbon-intensity mandate earn credits, and the lower the intensity, the more credits earned.

At full output, Canada’s biofuels sector would generate more than $18-billion a year in economic activity and support 30,000 jobs, according to Advanced Biofuels Canada.

However, biofuel producers have been in “survival mode” since then U.S. president Joe Biden launched the 45Z Clean Fuel Production Credit in 2022, said Mr. Ghatala. Armed with this incentive, clean fuel imports from the U.S. are outcompeting domestic products in the Canadian market. The 45Z was expanded last July as part of President Donald Trump’s One Big Beautiful Bill.

“This has been a freight train coming at our sector since,” said Mr. Ghatala.

The new Canadian incentive does not put Canadian producers on equal footing, he added, but it will help maintain some degree of competitiveness until ECCC finalizes changes to the CFRs.

Fuel producers will be paid on a quarterly basis. They will receive 16 cents per litre on the first 170 million litres of eligible production, and then 10 cents a litre on the 130 million litres produced after that.

This is good news for Canadian canola farmers, said Andre Harpe. In 2024, $4.9-billion of canola was sold to China. Beijing’s tariffs in August sank prices for farmers and slashed exports. The biofuel industry cannot absorb the loss of the Chinese market, but the incentive does play an important role in shoring up domestic demand, said Mr. Harpe.

“Any time canola is going to get used domestically it is a good thing. This is a good start.”

However, the incentives are only the first step, said Mr. Harpe. The most important part is the changes to the Clean Fuel Regulations.

In 2024, 73 per cent of CFR credits from low-carbon fuel support were generated by imports in 2024. A significant source of clean fuel feedstock is used cooking oil that is imported from markets in Asia.

To help Canada’s beleaguered canola sector, the CFRs need to prioritize domestic feedstocks, said Mr. Harpe. For example, according to the Canadian Oilseed Processors Association, a policy to curb imports of cooking oil so canola could capture just half of the Canadian market would use 2.5 million tonnes of canola seed, 42 per cent of the total volume exported to China in 2024.

Two main policies are being evaluated by ECCC, according to a discussion paper unveiled in December. One would require fuel producers to use a minimum amount of domestic feedstock. The other approach would place more value on domestic feedstock by giving low-carbon fuels produced using domestic feedstock more credits per litre.

The comment period for CFR amendments closes Jan. 15.

The canola crisis brings an opportunity to fix a major national-security issue for Canada

This opinion was written by Omar Saleh and was published in the Globe & Mail on August 14, 2025.

New high-oil variants can grow on Class 4 marginal lands – millions of acres across Saskatchewan and Alberta that aren’t used currently for food crops.

Canola could be the key to fixing one of Canada’s biggest national-security vulnerabilities

This week, China slapped a 75.8per-cent preliminary antidumping duty on Canadian canola, threatening $5-billion a year in exports and putting the Prairie agricultural economy squarely in the crosshairs.

Yet in this crisis lies an opportunity. The same crop now caught in a trade war could also be the key to fixing one of our biggest national security vulnerabilities.

Canola has quietly become one of the most credible feedstocks for sustainable aviation fuel (SAF) – chemically identical to conventional jet fuel, yet with up to 90-per-cent lower life-cycle emissions. It’s a drop-in fuel – usable in current engines, aircraft and refuelling systems with no modifications. The U.S. Air Force flies on it. Lufthansa uses it regularly. NATO is preparing to deploy it. Canada isn’t.

We have committed to spending $38.6-billion on North American Aerospace Defence Command (NORAD) modernization and Arctic deployments – without securing the fuel to support them. No strategic reserve. No domestic supply chain. No plan.

At Canada’s most remote base, CFS Alert, it takes seven litres of fuel to deliver just one usable litre. In a crisis, that’s a logistics choke point an adversary wouldn’t even need to attack – just wait for the supply chain to strain and watch operations slow.

This isn’t a technical gap. It’s industrial abdication.

Canada has the tools to lead. New high-oil varieties can grow on Class 4 marginal lands – millions of acres across Saskatchewan and Alberta that aren’t used currently for food crops. That means no pressure on food systems, and no need to convert premium farmland. That shift wasn’t driven by marketing – it was earned through hard science, better crop genetics and proven refining results.

What’s more, Canada has a real shot at global leadership not only because of what we grow, but also what we can store. Alberta already has one of the most advanced carbon-capture networks in North America. Facilities such as Quest, and the provincewide trunk line that supports it, are exactly what will separate low-carbon SAF from the ultralow-carbon SAF needed to win international contracts. That infrastructure is already there.

Put it together and the Prairies don’t just have the feedstock. They have the land, the logistics, the refining and the emissions solution. No other country has all five.

So why are we still acting like this is someone else’s opportunity?

The European Union and Britain are mandating SAF blending – 2 per cent by 2025, climbing to 70 per cent by 2050. The United States has committed billions through the Department of Energy, Federal Aviation Administration and Department of Defense. Yet Canada remains on the sidelines, siloing SAF under clean fuel programs, ignoring it in procurement and treating it as someone else’s file.

We’ve got more to lose than most. Almost a quarter of Canada’s jet fuel is imported, leaving our defence and Arctic operations dependent on foreign supply chains that are vulnerable to global disruptions. This isn’t about emissions – it’s about operational readiness and supply chain control.

Scaling SAF to 15 per cent of Canada’s jet fuel use could generate $3-billion to $5-billion annually across agriculture, refining and logistics. It could give farmers a new market, insulate us from geopolitical fuel shocks and create an Arctic fuel reserve that doesn’t cost $10 a litre to deliver. It means rural jobs. It means Indigenous-led infrastructure and northern resupply chains. It means fuel security for defence operations without relying on U.S. or overseas supply.

It also means leverage. SAF opens the door to premium export markets in the EU and U.S., and strengthens interoperability with NATO and NORAD fleets. Done right, this isn’t just industrial policy – it’s foreign policy.

If Canada can’t fuel its own jets, we don’t control our defence. If we can’t deliver fuel to our Arctic bases without draining our supply chain, we don’t control our territory. And if we can’t build the industrial system we’re uniquely positioned to lead, we don’t control our future.

Ottawa must treat SAF as strategic infrastructure, not just a climate file. That means committing to a federal SAF procurement mandate for defence and Arctic operations, subsidizing Prairie-based SAF refineries and creating a domestic strategic reserve by 2028. It also means integrating SAF into NORAD modernization planning – so the next time we upgrade our northern air bases, we’re upgrading their fuel supply, too.

Sovereignty isn’t a slogan. It’s fuel in the tank. It’s time to fill it.