Today’s Fall Economic Statement necessarily focuses on affordability issues that are top of mind for all Canadians. The Canadian Fuels Association (CFA) and its members[1] are nonetheless disappointed with today’s Fall Economic Statement for not acknowledging the importance of made-in-Canada biofuels. Budget 2023 announced consultations on support mechanisms to help level the playing field for Canadian biofuels production against the challenge presented by the U.S. Inflation Reduction Act (IRA). These consultations were completed earlier this fall, and yet there is nothing in here today to indicate the government plans to deliver the necessary measures.
“We were hopeful that the economic update would provide a policy signal to help incentivize investment by industry in low carbon fuel solutions and remove the uncertainty that is holding up those investments,” said Bob Larocque, President and CEO of the CFA. “Our members have $8-$10 billion in projects awaiting final investment decision this year. This is a huge missed opportunity.”
Canada has enormous potential to be global leader in biofuels production but we have a very long way to go. We are already a net importer of biofuels. Meanwhile, the U.S. IRA is attracting investment capital and feedstocks away from Canada to the U.S. where producers will be able to take advantage of the generous Clean Fuels Production Tax Credit. Without incentives to help level the playing field, Canada could be dependent on imports to meet 75 per cent of domestic demand for biofuels by 2030.
“There is no path to net zero in Canada without scaling up the use of biofuels to 2030, to 2050 and beyond. Without measures to restore investment parity with the U.S, not only do we lose autonomy over decisions related to our decarbonization goals, we risk losing the economic and energy security benefits that come with having a domestically owned and operated biofuels production value chain,” added Larocque.
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.
[1] Canadian Fuels members: Braya Renewable Fuels, Federated Co-operatives Limited ,Greenfield Global, Greenergy, Imperial Oil Limited, Irving Oil, North Atlantic, North West Redwater Partnership, Parkland Corporation, Petro-Canada Lubricants Inc., Shell Canada Products, Suncor Energy Products Partnership, Tidewater Midstream and Infrastructure Ltd. and Valero Energy Inc
