Biofuels: Questions and Answers
- What is the Government of Canada doing to support biofuels under the Regulation?
- This Regulation to require renewable fuel is an important part of Canada's overall renewable fuels strategy because it will establish the demand for the sources of renewable fuels and give industry the certainty it needs to secure investments in infrastructure.
The Government of Canada is also investing $2.2 billion over nine years to help support the development of the Canadian biofuels infrastructure and lay the groundwork for developing the next generation of biofuels with even greater environmental and economic benefits:
- Support for farmer participation in the industry
- The ecoAgriculture Biofuels Capital Initiative provides up to $200 million over four years in repayable contributions to help farmers and communities supplement their own investments in building or expanding biofuels production facilities.
- The Biofuels Opportunities for Producers Initiative (BOPI), which ran from January 2006 to March 2008, provided $18 million to help farmers develop the business and technical capacity to build large biofuel facilities and assess their viability.
- Production incentive to stimulate domestic production
- The ecoENERGY for Biofuels program provides up to $1.5 billion over nine years to encourage investment in the biofuels industry and boost Canada's annual production capacity to 2.5 billion litres.
- Initiatives to support next generation technologies
- The NextGen Biofuels FundTM will invest $500 million over nine years to encourage construction of large-scale demonstration facilities for renewable fuels made from agricultural residues from major crops like wheat straw, corn stover, wood residue and plant stalks.
- Collaborative research between AAFC, the Canola Development Commission and Milligan Bio-Tech Inc led to new technology that is now being used commercially in Saskatchewan to produce biodiesel from otherwise unusable non-food grade canola, generating significant job creation and other economic benefits.
Benefits to Agriculture
- What impact will this regulation have on farmers and rural communities?
- The production of renewable fuels is already having a positive impact on farmers and rural communities by offering farmers an opportunity to diversify their income and invest in value-added production opportunities and by creating jobs.
This Regulation is establishing market demand for the feedstocks for biofuels.
The next generation of new biofuels technologies will further benefit farmers by creating markets for by-product crop residues and other agricultural residues.
- Does the production of renewable fuels in Canada displace production of food?
Canada will be able to meet its targets for biofuels production while providing ample agricultural products for consumption. Even when Canada reaches its biofuels mandates, it is estimated that approximately 95 per cent of Canada's cropland will be available for other agricultural uses.
- Will the Regulation raise crop prices for farmers?
Overall, the federal renewable fuel requirement is expected to have minimal impact on the primary agriculture sector and no measurable downstream impact, as Canada is a price taker in the world market for crops, and changes in Canadian demand would not have any significant impact on world prices.