Canada promises money, reform to boost biofuels production

The Canadian government on Friday pledged hundreds of millions of dollars and relaxed regulations to boost biofuels production in the country, which faces stiff competition from the United States, Reuters reported.

Prime Minister Mark Carney named support for biofuels and the canola industry as one of six key areas the government will focus on.

Canola, an ingredient in some biofuels, in addition to U.S. restrictions, also faces high duties and tariffs in China, the largest export market for canola seeds.

The government has pledged C$370 million (US$267.79 million) in incentives for biofuels producers and said it would review regulations around their use.

Canada’s canola producers have complained for years that the U.S. provides more incentives for biofuels, reducing incentives to produce them. However, a Canadian government investigation into U.S. biofuel support concluded in May that the U.S. programs did not amount to “dumping and subsidizing” that harmed domestic producers.

The U.S. Renewable Fuels Association said both U.S. and Canadian producers benefit from biofuel support policies and should work together.

Analysts have previously noted that growing demand for biofuels will further increase feedstock and vegetable oil prices in 2026/27. In contrast to the relatively limited supply of vegetable oils, global meal and cake markets will be oversupplied in 2026.

Tags: subsidies, Canada, biofuel