Feds give financial boost to biofuel sector amid growing U.S. competition | CBC News

Canada’s Biofuel Industry Welcomes Federal Government’s Financial Support

Canada’s biofuel industry is welcoming a proposed multi-billion dollar package of financial support from the federal government, although concerns remain about whether it will be enough to compete with lucrative subsidies south of the border and reverse the growing dependence on U.S. imports to meet clean fuel regulations.

Financial Support for Biofuel Facilities

1. The federal government is committing $1.27 billion toward building new biofuel facilities through funding from the Canada Infrastructure Bank and a change to the Clean Fuels Fund.
2. This month’s federal budget also included the creation of a biofuel production fund, worth up to $500 million annually, which would be similar to a production tax credit and subsidize the ongoing operations of a facility.

“We were pleased to see something in the budget,” said David Schick, a vice-president with the Canadian Fuels Association.

The Importance of Sustainable Development Goals (SDGs)

• Biofuels can be produced from a variety of materials like corn, animal fats, and vegetable oils to produce ethanol, renewable diesel, and sustainable aviation fuel.
• Biofuels generally produce lower emissions than traditional gasoline and diesel because they burn cleaner.

As government regulations in Canada are increasing the need for biofuels, imports from the U.S. have also climbed. In 2023, Canadian imports of U.S. fuel ethanol jumped 40 per cent compared to 2022, to 1.76 billion litres.

There are about $10-billion worth of proposed facilities to make biofuels from Canadian raw materials in the country, said Schick, and the new federal support will help support those projects, while helping the economy and environment.

“It’s really as simple as make versus buy,” said Schick.

Details and Implementation

For several years the sector has lobbied Ottawa to take action in response to the U.S. government’s Inflation Reduction Act (IRA), a massive clean energy program. With its lavish subsidies toward many types of low carbon energy, the IRA has attracted investment from around the world to the U.S.

A clean fuel production tax credit included in the IRA that aims to boost the biofuel industry begins January 1, 2025.

In this month’s budget, the federal government states, “Not only do [biofuels] generate fewer greenhouse gas emissions compared to fossil fuels, they also represent a unique opportunity for the Canadian economy. The industry supports agriculture and forestry jobs and can help decarbonize key sectors like marine, aviation, rail, and heavy industry.”

The new federal government subsidies will help level the playing field compared to the IRA, said Schick, although a gap still remains.

“It’s somewhere in between a wide margin and comparable. We’re trying to understand how the details are going to play out,” he said.

Environmental Impact and Benefits of Biofuels

Replacing traditional diesel with either biodiesel or renewable diesel can reduce the carbon intensity of the fuel by about 90 per cent, according to Navius Research. However, the environmental benefit of biofuels can vary greatly based on what source material is used, such as whether it’s from waste or crops grown specifically for fuel.

A reduction in the emission from using biofuels can come at the expense of other environmental impacts in different parts of the world, some research has shown, such as acidification, water footprint, and biodiversity loss.

Conclusion

The new federal incentives, in addition to existing subsidies from some provincial governments, could level the playing field with what’s offered in the U.S., said Doug Hooper, the director of policy and regulation with Advanced Biofuels Canada.

The federal budget will help get more projects built, said Hooper, although some companies are hesitant to invest in a new facility because of the uncertainty surrounding a possible change in government. Fuel regulations, carbon taxes, and subsidy programs could all be impacted, he said.

The federal government’s clean fuel regulations aim to reduce the carbon intensity of gasoline and diesel by about 15 per cent by 2030 compared to 2016 levels.

SDGs, Targets, and Indicators

1. SDG 7: Affordable and Clean Energy

   • Target 7.2: Increase substantially the share of renewable energy in the global energy mix.
   • Indicator 7.2.1: Renewable energy share in the total final energy consumption.

2. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable.
   • Indicator 9.4.1: CO2 emission per unit of value added.

3. SDG 13: Climate Action

   • Target 13.2: Integrate climate change measures into national policies, strategies, and planning.
   • Indicator 13.2.1: Number of countries that have integrated mitigation, adaptation, impact reduction, and early warning into primary, secondary, and tertiary curricula.

Analysis

The article discusses Canada’s biofuel industry and the government’s financial support to promote its growth. Based on the content of the article, the following analysis can be made:

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The issues highlighted in the article are connected to the following SDGs:

• SDG 7: Affordable and Clean Energy – The article discusses the promotion of biofuels as a cleaner alternative to traditional gasoline and diesel.
• SDG 9: Industry, Innovation, and Infrastructure – The article mentions the need to upgrade infrastructure and retrofit industries to support the production of biofuels.
• SDG 13: Climate Action – The article emphasizes the role of biofuels in reducing greenhouse gas emissions and integrating climate change measures into national policies.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the article’s content, the following specific targets can be identified:

• Target 7.2: Increase substantially the share of renewable energy in the global energy mix – The article discusses the promotion of biofuels as a renewable energy source.
• Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable – The article mentions the need to upgrade infrastructure to support the production of biofuels.
• Target 13.2: Integrate climate change measures into national policies, strategies, and planning – The article emphasizes the role of biofuels in reducing greenhouse gas emissions and integrating climate change measures into national policies.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

The article does not explicitly mention any indicators that can be used to measure progress towards the identified targets. However, potential indicators that can be used include:

• Indicator 7.2.1: Renewable energy share in the total final energy consumption – This indicator can measure the increase in the share of biofuels in the energy mix.
• Indicator 9.4.1: CO2 emission per unit of value added – This indicator can measure the reduction in CO2 emissions through the use of biofuels.
• Indicator 13.2.1: Number of countries that have integrated mitigation, adaptation, impact reduction, and early warning into primary, secondary, and tertiary curricula – This indicator can measure the integration of climate change measures, including the promotion of biofuels, into national policies and education systems.

Table: SDGs, Targets, and Indicators

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Fuente: cbc.ca

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