Biofuels production and development in Canada

Feature article in IEA Bioenergy Task 39 Newsletter Issue #66, by Allison Simmonds, Natural Resources Canada.

Highlights:

• Canada has a high use of transport fuels per capita. Decarbonization of transport is a key strategic priority as transport accounts for 22% of Canada’s GHG emissions, with on-road vehicles accounting for 85% of the total.
• Biofuels now represent around 5% of transport energy use in Canada. Demand for ethanol and bio-based diesels increased by 34% and 42% respectively between 2021 and 2023 due to supportive policies and are expected to continue to increase.
• The use of bioenergy is quite small in relation to Canada’s domestic potential, and there is significant potential to expand the production of advanced biofuels. Advanced biofuels facilities currently under construction include the world’s largest hydrothermal liquefaction (HTL) facility (Arbios’ Chuntoh Ghuna) and Enerkem’s Varennes Carbon Recycling, one of the world’s largest bio-methanol facilities.
• Canada has set targets of 40-45% reduction in GHG emissions by 2030 (benchmarked against 2005) and net zero emissions by 2050. The 2021 Canadian Net-Zero Emissions Accountability Act formalized this target and established a series of interim emissions reduction targets at 5-year milestones towards the 2050 goal. These targets are supported by numerous policies and programs related to bioenergy, including the Clean Fuel Regulations.
• In July 2022, the Government of Canada published the final Clean Fuel Regulations (CFR). Compliance credits are generated via pathways including supply and use of biofuels in domestic transportation, and credits are traded in a compliance market. The first carbon intensity (CI) reduction requirements took effect on July 1, 2023.
• Federal and provincial-level renewable fuels programs continue to support conventional biofuels production and use across Canada. Federal blending mandates require at least 5% of the volume of a primary supplier’s pool of gasoline and 2% of its diesel pool be displaced by an equivalent volume of a liquid low-CI fuel. Provincial minimum blending mandates range from 5% to 15% in the gasoline pool and 2% to 5% in the diesel pool (volume basis).

Source: Natural Resources Canada Energy Factbook 2024-2025.

Liquids processing module at Arbios Biotech Chuntoh Ghuna biomass to renewable bio-oil facility, Prince George, BC”. Source: Arbios Biotech Ltd.