The Canadian Fuels Association is asking the federal government to act decisively in recognizing the importance of biofuels to grow our economy, bolster energy security and drive the decarbonization of the transportation fuels sector. An Atlantic Economic Council report released on February 28 makes crystal clear what is at stake: without investment by the Canadian government to incentivize the domestic industry, the U.S. Inflation Reduction Act (IRA) poses a significant risk to Canada’s competitiveness for investment in domestic biofuel solutions.
“We’ve reached a critical intersection and the 2024 federal budget must set the right conditions for industry investments in Canadian biofuel solutions to level the playing field with the very generous IRA clean fuel production tax credits,” says Bob Larocque, President and CEO, Canadian Fuels Association.
“Without measures to address this gap, not only do we risk losing the economic and energy security benefits that come with having a domestically owned and operated biofuels production value chain, but we also lose autonomy over decisions that would help us significantly decarbonize the transportation sector by 2050.”
Scaling up made-in-Canada’ biofuels production would significantly benefit rural communities as well as the agricultural, natural resources and clean technology sectors in Canada while stimulating related investments in infrastructure and innovation and create new jobs across the full supply chain.
There currently are biofuel projects worth approximately $12 billion awaiting final investment decision in Canada over the next year. These investments would create approximately 23,000 permanent direct and indirect long-term jobs from coast-to-coast over the next five years while reducing annual GHG emissions by at least 10 megatons.
“Canada has enormous potential to be a global leader in biofuels production. We have the technology, expertise and opportunities to grow our biofuels industry and be a major contributor to the Canadian economy while significantly reducing emissions from the transportation sector, but time is of the essence,” says Larocque.
“Without support in the 2024 federal budget to help pave the road ahead for more investments at home, several projects – including some that have already been announced – are at significant risk of relocating elsewhere or being cancelled outright. This means billions of dollars in investment could be lost and Canada’s energy security could significantly be impacted as we may depend on imports to meet up to 75 per cent of domestic demand for biofuels by 2030.”
About the Canadian Fuels Association
The Canadian Fuels Association (CFA) represents Canada’s transportation fuels industry and our members supply 95% of Canada’s transportation fuels. Contributing over $10 billion to Canada’s GDP annually, the sector also provides employment for more than 117,000 Canadians at 15 refineries, 8 clean fuel facilities and 75 fuel distribution terminals and 12,000 retail and commercial sites across the country.
Three years ago, CFA released Driving to 2050 which highlighted the opportunities and importance of scaling up domestic, low-carbon transportation fuels; as we continue to diversify the energy mix on our way to net zero. CFA members currently have plans to implement large-scale renewable diesel, sustainable aviation fuel (SAF), hydrogen and ethanol projects, as well as investments worth $8B with the potential to deliver 10 MT of greenhouse gas (GHG) reductions.
