Canada’s Biofuels Production Incentive took effect on Jan.1

In Canada, “The Biofuels Production Incentive takes effect today, providing immediate support to protect Canadian biofuel production capacity and strengthen Canada’s energy security,” said Fred Ghatala, President of Advanced Biofuels Canada Association.

“The Biofuels Production Incentive was announced by Prime Minister Carney on September 5, 2025, and (Jan. 1, 2026) marks the shift from policy intent to delivery.

“Canadian producers have been operating at a competitive disadvantage since the introduction of the United States’ Inflation Reduction Act and the Clean Fuel Production Credit, which significantly lowered U.S. production costs and reshaped North American capital flows.

“The Biofuels Production Incentive supports Canadian jobs, Canadian feedstocks, and Canadian fuel supply, helping keep clean fuel investment and production anchored in Canada amid ongoing trade and policy uncertainty. Biofuels are an immediately deployable solution that reduces emissions while supporting rural economies, well-paying jobs, domestic feedstocks like canola, and greater energy security.