Key Policy Principles

Clear, long-term, and consistent policies are essential to drive investment in new energy projects including lower-carbon fuels and emissions-reduction technologies across Canada. These policies provide the necessary framework to build a competitive, reliable industry and can significantly accelerate the production of low-carbon fuels and the deployment of other cleaner energy solutions.

With the right policy environment, Canada can leverage its natural resources and deep industry expertise to expand domestic production of lower-carbon fuels, reduce dependence on imports, and strengthen energy security. A competitive fuel sector also supports economic growth—particularly in rural regions—by creating jobs, stimulating investment, and supporting agricultural markets.

Five key policy principles for driving investment in energy projects are: 

1

Stable Regulatory Framework

Long-term, clear, consistent policies provide certainty for investors, reducing risks associated with fluctuating regulations and stranded investments.

2

Incentives and Subsidies

Predictable, non-application-based incentives such as tax credits are preferred as they help lower initial investment costs and support research and development in advanced biofuel technologies.

3

Transportation Decarbonization policies

All pathways will be needed to reduce transportation emissions and a Carbon Intensity (CI) based approach using a recognized Life Cycle Analysis Tool will best foster technology neutrality. Scaling up biofuel production is a cost-effective decarbonization pathway and CI-based policies, coupled with the right incentives will help unlock Canada’s full potential.

4

Credit Market Mechanism

Implementing carbon pricing or credits for lower-carbon fuels can make these more competitive with traditional fuels.

5

Technology neutrality

Technology neutrality is key to stimulating innovation in the lower-carbon fuel sector as it allows diverse solutions to compete, encourages technological breakthroughs, and avoids favouring specific technologies over potentially better alternatives.

Here are links to current federal and provincial clean fuel / low carbon fuel regulations in Canada: