U.S. policy impacting biofuel potential in Canada

Biofuel production and consumption have experienced fluctuations over the past century, dating back to the era when Henry Ford’s Model T was capable of operating on ethanol. Although biofuels have periodically declined in popularity, the implementation of the Renewable Fuel Standard in the U.S. in 2007 initiated a renewed phase of building biofuel production facilities. In addition, biofuel production supports the demand for agricultural commodities, including crops such as corn, wheat, soybeans, and canola.

In Canada and the U.S., there are three liquid fuel categories that biofuels compete into and substitute for. The largest market is gasoline, followed by diesel, and then jet fuel. All these markets are well supplied with fossil fuels but substituting and blending biofuels can help improve fuel quality and reduce greenhouse gas emissions. U.S. biofuel policies will continue to play a large role in determining where Canadian biofuels are consumed, as well as which feedstocks are utilized. We will investigate each of these markets and identify watch items for Canadian agricultural producers.

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