Canada commits money and regulatory reforms to boost biofuels
Canada's government announced on Friday that it would spend hundreds of millions of dollar and ease regulations in order to boost the production of biofuels, which is facing stiff competition from the United States. In an announcement of aid designed to help businesses deal with the damage caused by U.S. trade disruptions and tariffs, Prime Minister Mark Carney highlighted support for biofuels.
Heath MacDonald, Agriculture Minister, said: "We've got to make sure that our guys can keep operating until we amend the clean fuel regulations."
Canola seed, which is used in biofuels and other products, faces high tariffs and duties in China, its largest export market.
The Canadian government announced that it would revamp Canada's biofuel regulations and pledged C$370,000,000 ($267.79,000,000) as production incentives to Canadian biofuels manufacturers.
Canola producers and biofuel producers in Canada have complained about the U.S. providing more incentives to biofuels production in Canada than Canada. This has discouraged Canadian output. In May, a Canadian government investigation of U.S. biofuels subsidies concluded that U.S. programmes do not qualify for "dumping and subsidizing", which have hurt Canadian producers.
The U.S. Renewable Fuels Association says that U.S. producers and Canadian producers benefit from biofuel policies that are supportive and should work together.
Canadian producers also complain that the regulations are confusing, and an obstacle for investment in this sector. Carney promised to improve the situation during the April elections.
In July, the largest renewable diesel plant in Canada, owned by Imperial Oil and using canola as a feedstock, began production. Another major project has been shelved due to regulatory and trade concerns both in Canada and U.S.
Canola prices have been influenced by biofuel demand, which has increased in recent years as the U.S. production and consumption of vegetable oil has increased.
(source: Reuters)
