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Business: Transportation

Next-generation Biofuels

The Government of Canada is committed to expanding the production and use of cleaner biofuels (also called renewable fuels) such as ethanol and biodiesel. The Government has a four-pronged biofuels strategy in order to:

  • reduce the greenhouse gas (GHG) emissions resulting from fuel use,
  • encourage greater production of biofuels,
  • provide new market opportunities for agricultural producers and rural communities, and
  • accelerate the commercialization of new biofuel technologies.

Accelerating the commercialization of new technologies

The 2007 Budget made $500 million available to Sustainable Development Technology Canada (SDTC) to invest with the private sector in establishing large scale demonstration facilities for the production of next-generation biofuels. Next-generation biofuels are renewable alternatives to gasoline, produced from non-traditional feedstocks such as wheat straw, corn stover, wood residue and switchgrass, and renewable alternatives to diesel, produced from non-traditional feedstocks such as waste oils and animal fats.

Next-generation biofuels have the potential to generate even greater environmental benefits than traditional biofuels. Whereas use of traditional biofuels result in 40-80% less greenhouse gas (GHG) emissions compared to gasoline or diesel, next-generation biofuels can result in up to 100% fewer GHG emissions on a life-cycle basis compared to these fuels.

Next-generation Biofuels Fund

The Government and the SDTC have signed an agreement that provides the terms and conditions under which the SDTC will manage the $500M NextGen Biofuels FundTM. The Fund will:

  • facilitate the establishment of first-of-kind, large scale demonstration facilities for the production of next-generation biofuels and co-products in Canada
  • improve the sustainable development impacts arising from the production and use of biofuels in Canada
  • encourage retention and growth of technology expertise and innovation capacity for the production of next-generation biofuels in Canada

Who can apply?

For detailed information on the eligibility and selection criteria for the Fund and how to apply, visit SDTC's website.

An eligible project must:

  • be a first-of kind facility that primarily produces a next-generation biofuel at large demonstration-scale;
  • be located in Canada;
  • use feedstocks that are or could be representative of Canadian biomass; and
  • have demonstrated their technology at the pre-commercial pilot scale.

For the purposes of this Fund, a next-generation biofuel is produced using non-traditional renewable feedstocks such as lignocellulosic materials (including fast-growing grasses, agricultural residues and forest biomass) and non-conventional conversion technologies.

This measure complements other research and development initiatives including the following: