The Canadian government on Sept. 5 announced it is taking action to assist the country’s canola and agriculture producers by introducing a new biofuel production incentive and amending the country’s Clean Fuel Regulations to support the domestic biofuels industry.&nbsp;The biofuel-related measures are part of a larger effort launched by Canadian Prime Minster Mark Carney on Sept. 5 to protect, build and transform Canadian strategic industries that have been most impacted by U.S. tariffs and trade disruptions.&nbsp;In a notice announcing plans for the new biofuel production incentives, the Canadian government noted that its domestic biofuel producers are at risk due to new changes in subsidies and policy. As a result of those changes, many Canadian facilities are 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,” according to the government.In response to these challenges, the Canadian government will immediately introduce new biofuel production incentives that will provide more than $370 million over two years to help domestic producers and restructure their value chains. The incentive will be provided on a per-liter basis to Canadian producers of biodiesel and renewable diesel and will be available from January 2026 through December 2027 for up to 300 million liters (79.25 million gallons) per facility. Natural Resources Canada will provide additional details about the program in the coming weeks.To level the playing field and provide support for Canada’s biofuel sector, the governmental also said it intends 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.&nbsp;In addition, the government announced additional actions aimed at supporting canola producers, including increasing loan limits to $500,000 and investing in AgriMarketing and trade diversification measures. The AgriMarketing Program supports targeted activities to promote Canadian agri-food products as safe, sustainable and high quality. The government plans to invest an additional $75 million in the program over a five-year period. For canola producers, the government said the increased funding will enhance resources to promote the unique quality, versatility and sustainability of Canadian canola products, helping them stand out in competitive new markets and build resilient export pathways.&nbsp;The Canadian government also announced improvements to its Advanced Payments Program, which provides Canadian farmers with low-interest cash advances of up to 50% of the expected market value for eligible products. Producers can access up to $1 million in advances, with a portion interest-free. For the remainder of 2025 and the 2026 program year, the government will increase the interest-free limit for canola advances to $500,000, up from the current $250,000.Canadian renewable diesel producers Tidewater Renewables Ltd. applauded the announcing of a new biofuels production incentive and other support for the Canadian biofuels sector. "We are grateful for the support from the Government of&nbsp;Canada&nbsp;in levelling the playing field for Canadian renewable fuel producers and assisting&nbsp;Canada's&nbsp;canola producers, who are critical feedstock suppliers to the Corporation's renewable diesel facility,” said&nbsp;Jeremy Baines, CEO of Tidewater Renewables. “Once implemented, the measures announced today are expected to help support a competitive future for the Canadian renewable fuels industry and support the Corporation's future profitability and liquidity.”Unifor has also spoken out in support of the biofuel production incentives. "Canada's&nbsp;energy security must remain a top priority," said Lana Payne, Unifor national president. "By strengthening the biodiesel and renewable diesel markets, we have an opportunity to create good jobs and strengthen the Canadian energy supply chain.""Unifor members have been at the forefront of&nbsp;<a href="https://edge.prnewswire.com/c/link/?t=0&amp;l=en&amp;o=4504477-1&amp;h=2654762008&amp;u=https%3A%2F%2Fwww.unifor.org%2Fresources%2Four-resources%2Fontarios-proposed-domestic-renewable-content-requirement-diesel-fuel&amp;a=advocating">advocating</a>&nbsp;for regulation modernization and investment in the biofuels sector," added Payne. "We look forward to working with government and industry on other initiatives that grow Canadian jobs in the domestic market."Additional information on the new strategic measures is available on the government of Canada <a href="https://www.pm.gc.ca/en/news/news-releases/2025/09/05/prime-minister-carney-launches-new-measures-protect-building">website</a>.&nbsp;

2025-09-08 - Canada introduces new biofuel production incentive in response to trade disruptions, tariffs  (2 publications)

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The Canadian government on Sept. 5 announced it is taking action to assist the country’s canola and agriculture producers by introducing a new biofuel production incentive and amending the country’s Clean Fuel Regulations. 

Canada introduces new biofuel production incentive in response to trade disruptions, tariffs

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