The Canadian biofuels industry is struggling with a number of challenges, including low oil prices and US imports, and could even suffer a decline in production.

The expiration of a biofuels support scheme, lack of infrastructure and more rigid fuel efficiency regulations add to the headwinds faced by the sector, says an article by The Canadian Press last week. The International Energy Agency (IEA) projects in its most recent five-year outlook that the country’s ethanol output would contract 38% over the next five years, from around 1.68 billion litres in 2015 to some 1.04 billion litres by 2020.

Canada’s ecoENERGY biofuels programme, which provides incentives for domestic production, will end as planned in 2017, it has been confirmed. Even with the programme, Canada imports large amounts of ethanol from the US to help secure the 2.2 billion litres a year needed for its 5% federal blending mandate.

Still, a spokeswoman for the Natural Resources Canada department told The Canadian Press in an email that the government may consider new biofuel policies as part of the ongoing discussions on Canada's climate change framework.


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