Biofuels subsidy safety net fraying in Canada

A newspaper report in Canada printed on 23 February claims the government is to end biofuels production subsidises when the current programme ends in 2017.

A letter addressed to the industry by natural resources minister Joe Oliver outlined spending cuts to tame a deficit building in Ottawa.

The Globe and Mail reported that Oliver said the ethanol industry now produces necessary volumes for the country’s 5% petrol blend, but noted that the Canadian biodiesel industry has struggled to produce enough of the fuel, relying on imports to meet a 2% biodiesel target.

Of a claimed CN$1.5 billion (€11.1 billion) of support pledged via its Ecoenergy for Biofuels programme launched in 2008, the newspaper claims only $1 billion has been made available and applications for support were stopped from 2010.

Around 24 projects have been funded by the programme so far and new plans will now have to be reconsidered if the parachute strings of subsidy are cut.