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ecoENERGY for Biofuels Program

Overview
News and Updates
Background
About the Program
About the Incentive
Definitions
Eligible Recipients
Application Requirements
Successful Applicants
Questions and Answers
Related Links
Previous Program Design

ecoENERGY for Biofuels – Previous Program Design

ecoENERGY for Biofuels – Archive

ecoENERGY for Biofuels Overview

The ecoENERGY for Biofuels program supports the production of renewable alternatives to gasoline and diesel and encourages the development of a competitive domestic industry for renewable fuels. The program provides an operating incentive to facilities that produce renewable alternatives to gasoline and diesel in Canada.

ecoENERGY for Biofuels will invest up to $1.5 billion over nine years in support of biofuel production in Canada. Administered by Natural Resources Canada, the ecoENERGY for Biofuels program runs from April 1, 2008 to March 31, 2017. Recipients will be entitled to receive incentives for up to seven consecutive years.

Program Update

August 31, 2009 – ecoENERGY for Biofuels program

Following ecoENERGY for Biofuels' first year of operation, there continues to be a strong market interest in the program and in expanding Canada's production of renewable fuels such as ethanol and biodiesel.

To date, ecoENERGY for Biofuels has received 54 applications and the program has deemed 28 applicants to be eligible for funding. Natural Resources Canada has signed contribution agreements with 23  successful applicants, both existing and proposed facilities. Payments are being made on a quarterly basis to facilities currently in production that have signed a contribution agreement and for which all environmental requirements have been fulfilled.

The program can only sign contribution agreements within its financial authority and must operate within its annual budget. As previously announced, based on the department's current review, the ecoENERGY for Biofuels program may not be able to fund all of the applications in hand.

The ecoENERGY for Biofuels program continues to assess applications in the order in which they were deemed complete. Natural Resources Canada is processing applications as quickly as possible while still exercising the due diligence associated with providing government funds. The program is finalizing contribution agreements with companies that have been deemed eligible to date and will be in a position to deem additional companies eligible in the coming weeks.

Should some projects not move forward, additional applicants will be considered for funding. Preference could be given to renewable alternatives to gasoline or to renewable alternatives to diesel, depending on progress towards achieving program targets for each fuel type.

Incentive rates for Quarter 1, Fiscal Year 2009-2010.

For alternatives to gasoline (ethanol):

Quarter 1 FY 2009-2010 10 cents/litre

For alternatives to diesel:

Biodiesel companies receiving payments have been notified of the rates for Quarter 1. Due to the small number of companies involved, the program will not be making these rates public in order to protect commercial confidentiality.

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ecoENERGY for Biofuels – Background

What is Canada's renewable fuels strategy?

Canada's renewable fuels strategy comprises four key elements:

  • Federal Regulation – Proposed federal regulation requiring renewable fuels content in gasoline, diesel and heating oil – led by Environment Canada (EC);
  • ecoAgriculture Biofuels Capital Initiative (ecoABC) and Biofuels Opportunities for Producers Initiative (BOPI) – Assistance for farmers to seize new opportunities in biofuels production – led by Agriculture and Agri-Food Canada (AAFC);
  • NextGen Biofuels Fund – Support for establishing large-scale demonstration facilities for the production of next-generation biofuels – managed by Sustainable Development Technology Canada (SDTC). SDTC is an arm's-length foundation created by the Government of Canada;
  • ecoENERGY for Biofuels – Operating incentives to stimulate domestic biofuels production – led by Natural Resources Canada (NRCan).

ecoENERGY for Biofuels is a $1.5 billion incentive program that runs over nine years, starting April 1, 2008. The program provides operating incentives to producers of renewable alternatives to gasoline, such as ethanol, and renewable alternatives to diesel, such as biodiesel, that have signed a Contribution Agreement with NRCan and under conditions where industry requires support to remain profitable. For the first three years, incentive rates will be up to $0.10/L for renewable alternatives to gasoline and up to $0.20/L for renewable alternatives to diesel. After three years these maximum rates will decline.

To be considered for an incentive under the ecoENERGY for Biofuels program, a prospective recipient is required to complete an application form and submit detailed information, as outlined in the application requirements section. In accordance with program parameters, NRCan will review the information to determine if the prospective recipient meets the program's criteria. If these criteria are met and program funds are still available, the application will be approved for an incentive under the program.

The program, which began on April 1, 2008, will end March 31, 2017. Incentives based on the average industry profitability are provided to recipients on a quarterly basis.

How does ecoENERGY for Biofuels work with other Government of Canada programs?

In December 2006, the Government of Canada announced its intent to develop federal regulations on renewable fuels. These proposed regulations will require five percent renewable fuel content based on the gasoline pool by 2010, and two percent renewable fuel content in diesel and heating oil by 2012 upon successful demonstration of renewable diesel fuel use under the range of Canadian conditions. These new regulations are expected to require close to 3 billion litres of renewable fuels by 2012. ecoENERGY for Biofuels will support meeting the regulated demand by facilitating and encouraging domestic production of renewable fuels.

The ecoENERGY for Biofuels program also complements the $200 million ecoAgriculture Biofuels Capital (ecoABC) program, which provides capital funds to new plants based on the level of farmer ownership.

The federal government has also announced the $500 million NextGen Biofuels Fund, managed by Sustainable Development Technology Canada (SDTC). The Fund will invest, over eight years, in first-of-kind large-scale demonstration next-generation renewable fuel production facilities. This Fund will jumpstart the development and production of the next-generation of renewable fuels in Canada.

The ecoENERGY for Biofuels program is a key component of the Government of Canada's comprehensive strategy to support the expansion of Canadian production of renewable fuels.

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ecoENERGY for Biofuels – About the Program

The $1.5 billion ecoENERGY for Biofuels program, announced on July 5, 2007, is an important component of the Government of Canada’s Renewable Fuels Strategy. This nine-year program supports the production of renewable alternatives to gasoline and diesel and encourages the development of a competitive domestic industry for renewable fuels. It makes investment in production plants and facilities more attractive by partially offsetting the risk associated with fluctuating feedstock and fuel prices.

The program provides an operating incentive – based on production levels – to producers of renewable alternatives to gasoline and diesel produced in Canada.

How does the program work?

In accordance with program parameters, and based on funding availability, the ecoENERGY for Biofuels program enters into non-repayable Contribution Agreements with successful recipients meeting the program's criteria.

Payment of an operating incentive is made only to recipients who have signed a Contribution Agreement with Natural Resources Canada (NRCan) and have completed an environmental assessment to the satisfaction of NRCan. The operating incentive is provided on a per litre basis, based on volume of renewable fuels produced in Canada by such recipients, and as agreed upon in the Contribution Agreement. The number of litres for which a recipient can claim under ecoENERGY for Biofuels is determined by NRCan according to program parameters.

The level of the operating incentive provided by the program in any given year will vary based on the average industry profitability. When market conditions result in high industry profitability, a lower incentive will be paid. When market conditions are poor (e.g., high feedstock cost, low fuel price), a higher incentive will be paid. The maximum level of the incentive rate will also decline over the nine years of the program.

Incentives are provided on a quarterly basis.

What does renewable alternatives to gasoline and diesel mean?

“Renewable Alternatives to Gasoline” means a fuel accepted under the Program, made from renewable feedstock, meeting the most current national or international standards for quality specification, and that can be blended with gasoline (at least 5% blend) or used in its pure form in gasoline applications as generally accepted industry-wide.

“Renewable Alternatives to Diesel” means a fuel accepted under the Program, made from renewable feedstock, meeting the most current national or international standards for quality specification, and that can be blended with middle distillates (at least 2% blend) or used in its pure form in middle-distillate applications as generally accepted industry-wide.

What are the program parameters?

Program parameters are defined as follows:

  • Operating incentives are provided only to recipients who have signed a Contribution Agreement with NRCan.
  • Contribution Agreements are signed for up to seven consecutive years.
  • No incentive will be provided beyond March 31, 2017.
  • Facilities that have received capital incentives from other programs, such as the Ethanol Expansion program (EEP) and ecoAgriculture Biofuels Capital (ecoABC) can apply for this program.
  • Both existing and proposed facilities that produce renewable alternatives to gasoline and diesel in Canada can apply for this program (facilities must be constructed before March 31, 2011).
  • Initially, program volume limits of up to 2 billion litres of renewable alternatives to gasoline and up to 500 million litres of renewable alternatives to diesel have been forecast. These will potentially increase over time, subject to funding availability and/or if the maximum incentive rate has not been applied in earlier years. Eligible volumes accepted under the program for any fiscal year will be subject to funding availability.
  • A cap of 30 percent of program volume limits applies to any individual company. For greater clarity, an individual company is a for-profit legal entity with ownership over one or more renewable fuels production plants or facilities.
  • An amount of $500 million is reserved for projects producing renewable alternatives to diesel. This reserve may be reduced or cancelled at any time should the need arise to do so. Funds will return to the program.
  • In selecting successful applicants, the program may give preference to renewable fuels production facilities with more sustainable renewable fuels production pathways and/or better environmental performances, such as lower greenhouse gas (GHG) emissions, water use, and/or fossil energy balance.
    • For instance when proponents are competing for final litres of the Program's total eligible volume at any point in time, the Program will give preference, during the selection process, to proponents with better sustainable renewable fuels production pathways and/or better environmental performances.
    • In addition, the program reserves the right to exclude from the program applicants whose fuel production process would erode the lifecycle GHG emission benefits of biofuels, based on the major energy source used for production (for instance, facilities that are reliant upon coal as their major energy source would not be eligible to receive program funds).

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Eligible Recipients

An eligible recipient is:

  • a for-profit legal entity with ownership over an individual plant or facility that produces, in Canada, renewable alternatives to gasoline and/or diesel, that is not subject to a controlling interest by a federal, provincial, or municipal government, and that meets the criteria set out by the ecoENERGY for Biofuels program; or
  • a for-profit legal entity in the advanced development stage of engineering plans and financing strategies for the construction of an individual plant or facility for the production, in Canada, of renewable alternatives to gasoline and/or diesel, that is not subject to a controlling interest by a federal, provincial, or municipal government, and that meets the criteria set out by the ecoENERGY for Biofuels program. Facilities must be constructed before March 31, 2011.

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About the Incentive

ecoENERGY for Biofuels provides directly to producers of renewable fuels variable operating incentives aimed at helping industry reach up to a rate of return of 20 percent.

The incentive rates are variable and depend on market conditions and average industry profitability. The incentive rate is designed to pay producers more when market conditions are less favourable and less when conditions are more favourable. The incentive is non-repayable as it already takes into account the industry profitability.

What are the financial incentives?

For the first three years, the incentive rates will be up to the maximum of $0.10/L for renewable alternatives to gasoline and up to the maximum of $0.20/L for renewable alternatives to diesel. These maximum rates will decline after three years as detailed in Table 1.

TABLE 1: Maximum incentive rate payable ($ per L)
Fiscal Year * 2008
-
2009
2009
-
2010
2010
-
2011
2011
-
2012
2012
-
2013
2013
-
2014
2014
-
2015
2015
-
2016
2016
-
2017
Renewable Alternatives to Gasoline 0.10 0.10 0.10 0.08 0.07 0.06 0.05 0.04 0.04
Renewable Alternatives to Diesel 0.20 0.20 0.20 0.16 0.14 0.12 0.10 0.08 0.06
* April 1 of a given year to March 31 of the following year.

How are these incentives rates calculated?

Incentives are provided for the number of litres of renewable fuels produced in Canada by a recipient, as agreed upon in each Contribution Agreement.

Incentives provided are calculated by taking into consideration the recipient’s eligible production in litres and the incentive rate in dollars per litre, as follows:

Incentive = Eligible Production (L) × Incentive Rate ($/L)

What does the incentive formula mean?

Eligible Production:

Maximum number of litres of renewable alternatives to gasoline or diesel produced in Canada and sold by a recipient, as agreed upon in the Contribution Agreement.

Incentive Rate:

This is the amount all recipients will receive per litre of renewable fuel produced. Natural Resources Canada (NRCan) will determine the incentive rate quarterly, shortly after the end of each production period, based upon industry margin elements received from all recipients. Incentive rate calculation as follows:

Incentive Rate = Profitability Margin – Industry Margin

Up to the maximum incentive rates payable per litre of renewable fuel.

Industry Margin:

The industry margin captures key costs and revenues that are impacted by the commodity market. Shortly after the end of each production period, recipients are required to report their individual industry margin elements indicated in Table 2:

TABLE 2: Industry Margin Elements
  Major Revenue and Cost Items included in Calculation Margin Calculation Formula – all variables are on a per litre basis
Renewable alternatives to gasoline
  • Revenue from renewable fuel sales
  • Revenue from animal feed sales
  • Direct provincial incentives
  • Cost of feedstock
  • Cost of energy for the production process
(Revenue from renewable fuel sales plus revenue from animal feed sales plus direct provincial incentives)

minus

(Cost of feedstock plus cost of energy for the production process)
Renewable alternatives to diesel
  • Revenue from renewable fuel sales
  • Direct provincial incentives
  • Cost of feedstock, and
  • Cost of methanol*
(Revenue from renewable fuel sales plus direct provincial incentives)

minus

(Cost of feedstock plus Cost of methanol)

*Applies to transesterification plants only. Equivalent cost items of other technologies to be assessed at a later stage as required.

The industry margin will be calculated shortly after the end of every production period using a weighted average for all recipients based on individual facility margins. The expenses and revenues not captured in the industry margin have been taken into account in the profitability margin. The industry margin is the actual average margin experienced by industry over a given production period, expressed in a per litre amount.

Profitability Margin:

The profitability margin has been set as follows:

Renewable alternatives to gasoline: $0.29/L (Over 9 years of the program)
Renewable alternatives to diesel: $0.32/L (Initially set at $0.32; will be adjusted between $0.32 and $0.25 depending on industry's ability to attract debt financing)

The profitability margin has been determined based on modeling done by NRCan with input from members of the renewable fuels industry. It considers all factors that influence present and expected future cash flows. All revenues, expenses, investing and financing activities were considered in determining the profitability margin, including things that are not listed explicitly in the industry margin (e.g. other operating expenses, debt servicing, income taxes). The profitability margin was calculated using the same revenue and expense items used in the calculation of the industry margin. The profitability margin can also be considered as an idealized industry margin – meaning that it is the per litre amount that an efficient industry on average needs to achieve a 20 percent rate of return.

What are the basis and timing of payment?

Incentive payments under the program will be made following receipt of claims submitted on a quarterly basis to NRCan. Claims submitted must include verifiable amounts of eligible production in litres (as certified by a duly authorized officer and as defined in the Contribution Agreement) and revenue and cost items as described in Table 2.

When does the program start to recognize eligible production?

Recognition of eligible production is from the first day of the quarter in which an applicant is accepted under the program. However, the complete application and related project information should be received by NRCan in the first two months of that quarter.

When will the payments be made?

Payments will only be made on a quarterly basis after a Contribution Agreement is signed and environmental assessment is completed.

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Application Requirements

Recipients for the incentive are selected based on program criteria, subject to the program's maximum liability limit and in accordance with program parameters. The onus is on the applicant to provide all relevant information in a timely manner.

In order to be considered for the program, an applicant is required to submit an application form containing detailed project information. Contact us to receive a copy of the application form.

Some of the information required in the application form includes:

  • Name of the applicant;
  • Details about the applicant (e.g., legal name and status, ownership, jurisdiction of incorporation, business registration number, type of activity, management);
  • Background information about the production facility;
  • Location of the production facility;
  • Date of facility's construction;
  • Attestation of conditional financing arrangement from a recognized financial institution (in the case of proposed facilities);
  • Confirmation that master construction plans are established, including arrangements for engineering and construction contracts, and schedule establishing firm dates for construction and commissioning, certified by an engineer registered in Canada on behalf of the applicant (in the case of proposed facilities);
  • Projected production volume of renewable fuels as certified by an engineer registered in Canada on behalf of the applicant, technology or construction provider, or a qualified subcontractor.
  • Nameplate capacity, as certified by an engineer registered in Canada on behalf of the applicant, technology or construction provider, or a qualified subcontractor.
  • When an applicant is part of a for-profit legal entity that owns more than one plant or facility, each applicant is also required to identify the overall nameplate capacity of the for-profit legal entity in its application;
  • Estimated annual production of co-products;
  • Description of conversion process/technology;
  • Description of the proposed feedstock, including type, supplier and source of feedstock, and documentation on its availability;
  • Description of measures to be taken to ensure the renewable fuels produced will conform to the most recent industry-wide quality specifications, if applicable;
  • Description of the source and quantity of energy inputs to the production process;
  • Description of plant-level greenhouse gas (GHG) emissions;
  • Description of the quantity of water use and source;
  • Demonstration of compliance with the requirements of the Canadian Environmental Assessment Act and, where appropriate, harmonized with other applicable environmental assessment legislation and practices, and the results of environmental impact assessments undertaken to meet provincial and other federal government requirements;
  • Supporting material will include the disclosure of the involvement of former public servants for whom the Conflict of Interest and Post-Employment Code for Public Office Holders or the Values and Ethics Code for the Public Service apply, to ensure that no such individual derives a direct benefit from any Contribution Agreement under this program, unless that individual is in compliance with applicable post-employment provisions.

Where lobbyists are utilized, the recipient is to ensure that the lobbyists are registered in accordance with the Lobbyist Registration Act, that no actual or potential conflict of interest exists, and that the recipient's organizations do not pay lobbyist on a contingency fee basis.

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Terms and Conditions

What are the admissibility criteria?

Payment of an incentive will be made only to recipients who have signed a Contribution Agreement with Natural Resources Canada (NRCan).

NRCan will consider signing Contribution Agreements, in accordance with program parameters, with prospective recipients for projects that meet the following program admissibility criteria:

  • Nameplate capacity – An applicant must have a nameplate capacity of at least 3 million litres per year for production of renewable alternatives to diesel or 5 million litres per year for production of renewable alternatives to gasoline.
  • Date of construction – Applicants may request funding under the program for renewable fuels production facilities constructed before March 31, 2011.
  • 30 percent cap – No individual company will receive an operating incentive on volumes that exceed 30 percent of the program's total eligible volumes of renewable alternatives to gasoline and diesel – as calculated by the program each year. For greater clarity, an individual company is a for-profit legal entity with ownership over one or more renewable fuels production plants or facilities.
  • Canadian Environmental Assessment Act (CEAA) requirements – Demonstration of compliance with the requirements of the CEAA and, where appropriate, harmonized with other applicable environmental assessment legislation and practices as well as the results of environmental impact assessments undertaken to meet provincial and other federal government requirements.

How is the cap of 30 percent of program volume limits per individual company calculated?

In order to ensure that benefits are provided to a wide range of participants, no individual company will be able to apply for operating incentives for volumes of production totalling more than 30 percent of the program's total eligible volume.

At its onset, the program's total eligible volume have been forecasted at up to 2 billion litres of renewable alternatives to gasoline and up to 500 million litres of renewable alternatives to diesel, therefore the maximum volume for any individual company has been set at up to 600 million litres for renewable alternatives to gasoline and up to 150 million litres for renewable alternatives to diesel depending on funding availability.

Each fiscal year thereafter (April 1 of a given year to March 31 of the following year), ecoENERGY for Biofuels will determine its total eligible volume for the year, that is the maximum number of litres for which it can provide an incentive. This volume may increase over the years, subject to funding availability and/or if the maximum incentive rate has not been applied in earlier years. Based on this total eligible volume for the year, the program will then determine the maximum volume levels that any individual company will be able to claim.

Example – 30 Percent Cap Calculation for Fiscal Year 2008/2009

Individual company A has four facilities producing ethanol, a renewable alternative to gasoline. Each facility produces 250 million litres per year. The four production facilities of Company A apply to the program. Subject to funding availability, company A is eligible for up to 600 million litres per year, distributed amongst its four facilities as it deems best. There will be a Contribution Agreement signed with each facility.

NRCan will calculate, at the end of its fiscal year, the new total eligible volume and determine volumes based on the 30 percent cap for the coming fiscal year.

What is the program's total eligible volume?

Initially program volume limits of up to 2 billion litres of renewable alternatives to gasoline and 500 million litres of renewable alternatives to diesel have been forecast. These volumes may increase over time, subject to funding availability and/or if the maximum incentive rate has not been applied in earlier years. Eligible volumes accepted under the program for any fiscal year will be subject to funding availability.

What are the reporting requirements?

During the maximum seven-year period of the Contribution Agreement, a recipient must provide NRCan with the following documentation:

  • On a quarterly basis, claims for payments that will include the facility’s production and revenue and cost items for the production period, as described in Table 2.
  • On a yearly basis, audited financial statements submitted no later than 120 days after the last day of the proponent's fiscal year. These audited statements should include a special audit, or equivalent report, that will address the specific requirements/compliance needs of the program.
  • On a yearly basis, sustainability reporting on fuel production (for example gate-to-gate), and other life cycle stages beyond fuel production as may be required by the program. This reporting requirement could include a description of environmental indicators such as the source and quantity of energy inputs to the production process, plant-level greenhouse gas emissions, quantity of water used and quality of water output.

The reporting timelines have been identified in Table 3:

TABLE 3 – Program Timelines
  Dates Description
Program Start April 1, 2008  
Production Period April 1 – June 30, 2008  
Claims for Payment July 22, 2008 Recipients given until July 22, 2008, to report eligible production, revenue and cost items for the production period.
Production Period July 1, 2008 – September 30, 2008  
Claims for Payment October 22, 2008 Recipients given until October 22, 2008, to report eligible production, revenue and cost items for the production period.
Production Period October 1, 2008 – December 31, 2008  
Claims for Payment January 22, 2009 Recipients given until January 22, 2009, to report eligible production, revenue and cost items for the production period.
Production Period January 1, 2009 – March 31, 2009  
Anticipated Amount of the Last Claim in of the Fiscal Year March 15, 2009 Recipients required to provide a signed statement of anticipated eligible production, revenues and cost items for the production period.
Claims for Payment April 23, 2009 Recipients given until April 23, 2009, to report eligible production, revenue and cost items for the production period.
Audited Financial Statements Report No later than 120 days after the last day of the proponent's fiscal year Deadline for submitting audited financial statements with special audit or equivalent report
Cycle repeated for the duration of the program

What are the requirements of the Canadian Environmental Assessment Act?

The prospective recipient must demonstrate compliance with the requirements of the Canadian Environmental Assessment Act and, where appropriate, harmonized with other applicable environmental assessment legislation and practices as well as provide results of environmental impact assessments undertaken to meet provincial and other federal government requirements.

More information is available in the Environmental Assessments section.

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Incentive Rates

The ecoENERGY for Biofuels program provides an operating incentive to producers of renewable alternatives to gasoline and diesel produced in Canada. In order to receive an incentive, eligible recipients must have signed a Contribution Agreement with Natural Resources Canada (NRCan) and must have met the requirements of the Canadian Environmental Assessment Act (CEAA) and comply with all other applicable federal, provincial and municipal environmental legislation.

The operating incentive is provided to recipients on a per litre basis, based on volume of renewable fuels produced in Canada during the quarter, as agreed upon in each Contribution Agreement.

An explanation of how the incentive rates have been calculated can be found in the section About the Incentive.

TABLE 4: ecoENERGY for Biofuels Incentive Rates

Fiscal Year Quarter Dates Renewable
Alternatives
to Gasoline
Renewable
Alternatives
to Diesel
2008 – 2009 Q1 April 1 to June 30, 2008 1.5 cents/litre N/A *
2008 – 2009 Q2 July 1 to September 30, 2008 7.8 cents/litre N/A *
2008 – 2009 Q3 October 1 to December 31, 2008 10.0 cents/litre N/A *
2008 – 2009 Q4 January 1 to March 31, 2009 8.2 cents/litre N/A *
2009 – 2010 Q1 April  1 to June  30, 2009 10.0 cents/litre N/A *

* The incentive rate for renewable alternatives to diesel will not be published to protect confidential commercial information of the limited number of recipients eligible in this quarter.

To view a list of contribution agreements signed to date, click here.

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News and Updates

Program Update

August 21, 2009 – ecoENERGY for Biofuels program

Following ecoENERGY for Biofuels' first year of operation, there continues to be a strong market interest in the program and in expanding Canada's renewable fuel production such as ethanol and biodiesel.

To date, ecoENERGY for Biofuels has received 54 applications and the program has deemed 27 applicants to be eligible for funding. Natural Resources Canada has signed contribution agreements with 23 successful applicants, both existing and proposed facilities. Payments are being made on a quarterly basis to facilities currently in production that have a signed contribution agreement and for which all environmental requirements have been fulfilled.

The program can only sign contribution agreements within its financial authority and must operate within its annual budget. As previously announced, based on the department's current review, the ecoENERGY for Biofuels program may not be able to fund all of the applications in hand.

The ecoENERGY for Biofuels program continues to assess applications in the order in which they were deemed complete. Natural Resources Canada is processing applications as quickly as possible while still exercising the due diligence associated with providing government funds. The program is finalizing contribution agreements with companies that have been deemed eligible to date and will be in a position to deem additional companies eligible in the coming weeks.

Should some projects not move forward, additional applicants will be considered for funding. Preference could be given to renewable alternatives to gasoline or to renewable alternatives to diesel, depending on progress towards achieving program targets for each fuel type.

Incentive rates for Quarter 1, Fiscal Year 2009-2010.

For alternatives to gasoline (ethanol):

Quarter 1 FY 2009-2010 10 cents/litre

For alternatives to diesel:

Biodiesel companies receiving payments have been notified of the rates for Quarter 1. Due to the small number of companies involved, the program will not be making these rates public in order to protect commercial confidentiality.


November 24, 2008 – ecoENERGY for Biofuels program

There is a strong market interest in the new ecoENERGY for Biofuels program and in expanding Canada’s production of renewable fuels such as ethanol and biodiesel.

Status of Applications

The program is finalizing contribution agreements with companies that have completed the application process and have been deemed eligible. Payments commence once an agreement has been signed and all environmental requirements have been fulfilled.

The ecoENERGY for Biofuels program is continuing to process applications in the order in which they are found to be complete. The program will be in a position to deem additional companies eligible over the coming weeks.

The program can only sign contribution agreements within its financial authority and must operate within its annual budget. Based on the department’s current review, the ecoENERGY for Biofuels program may not be able to fund all of the applications received to date.

Should some projects not move forward, additional applicants will be considered for funding. Preference could be given to alternatives to gasoline or to alternatives to diesel, depending on progress towards achieving program targets for each fuel type.

Incentive rates

For alternatives to gasoline (ethanol):

Quarter 1 1.5 cents/litre
Quarter 2 7.8 cents/litre

For alternatives to diesel (biodiesel):

Biodiesel companies receiving payments have been notified of the rates for Quarter 1 and/or Quarter 2. Due to the small number of companies involved, the program will not be making these rates public in order to protect commercial confidentiality.


April 25, 2008 – ecoENERGY for Biofuels program open for business

The parameters for the ecoENERGY for Biofuels program have been finalized and Natural Resources Canada (NRCan) is accepting applications.

The program Web site has been updated with key details for potential applicants, including the following:

The incentive rate – the amount that recipients will receive per litre of renewable fuel produced – will be determined as follows:

Incentive Rate = Profitability Margin – Industry Margin

  • The profitability margin for renewable alternatives to gasoline has been set for nine years at $0.29L in order to provide producers with a more secure investment climate.
  • The profitability margin for renewable alternatives to diesel has been set for the first year at $0.32L.This reflects current market conditions and will be revised as this emerging industry develops.

The incentive payments will be made on a quarterly basis, following receipt of claims submitted to the program, to proponents who have signed a Contribution Agreement with NRCan and whose environmental assessment is complete.

Contact the program to receive a copy of the application form.


Program Update

April 10, 2008 – Natural Resource Canada announces changes to the ecoENERGY for Biofuels program

Based on feedback during discussions with industry stakeholders, Natural Resources Canada has made three key improvements to the design of the program. This delayed the program launch. The changes include:

  • The incentive rate calculation will now amount to 100% of what industry requires on average to achieve a 20% rate of return, after accounting for other government support and subject to maximum rates.
  • Projects in the advanced development stage will now also be eligible to apply for the program, instead of just completed projects.
  • Reporting requirements and timing of payments will no longer be on a semi-annual basis and the program is considering alternatives.

Our Web site will be updated shortly to provide all the details on the program and we expect to begin processing applications shortly.

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