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

January 12, 2010  - ecoENERGY for Biofuels Program Changes update

Reaction to the ecoEnergy for Biofuels Program changes announced on December 14, 2009, has been extremely positive. In the two weeks following the announcement, the Program received 85 expressions of interest from new and existing producers.

• 16 projects from “existing producers” worth approximately $232M (including requests for volume increases to existing contribution agreements)
• 69 projects from “new producers” worth approximately $1.89B (including requests for volume increases to existing contribution agreements)

To date the program has 21 signed contribution agreements representing a total commitment of $965M ($765M Ethanol and $200M biodiesel) with a potential production of 1.6 billion litres attainable by 2011/12. Note that the program has an allocation of  $1.438B to attain its volume targets of 2 billion litres of renewable alternatives to gasoline and 500 million litres of renewable alternatives to diesel by 2011/12.

In accordance with new program parameters, the program will first seek to commit from the remaining $473 million for existing producers who will be in production by  March 31, 2010 and who meet all program requirements.

Funds not allocated to existing producers by  March 31, 2010, will be used to support the highest ranked projects from new producers that were able to successfully demonstrate an advanced state of readiness by March 31, 2010. Those projects will undergo a comprehensive merit-based assessment and be rated and ranked. Final funding decisions will be based on ranking by fuel type, subject to volume target needs and funding availability.

Based on the significant interest in the program, it is important for companies to submit a completed application as soon as possible. This will allow the program to review the material and comment on its adherence to program requirements and for applicants to make adjustments in advance of the March 31, 2010 application deadline.

No information (e.g. changes to the application or missing documentation) will be accepted after the March 31, 2010 deadline.

Note that a separate application must be completed for each production plant or facility, an expansion of a plant or facility, or expanded volumes for those with existing contribution agreements.

December 14, 2009 ecoENERGY for Biofuels Program Changes

Following 18 months of Program delivery, there continues to be strong market interest in the ecoENERGY for Biofuels Program and in expanding Canada’s production of renewable fuels such as ethanol and biodiesel.

Over the last several months, Natural Resources Canada has worked with other federal departments to conduct an interim assessment of the ecoENERGY for Biofuels Program. During this assessment, it became apparent that some of the Program parameters, coupled with the economic climate, are challenging the viability of biofuels projects. Adjustments are being made to ensure that the Program operates as effectively as possible to meet its renewable fuels target.

Six modifications to the Program design have been implemented, effective December 14, 2009. These changes are intended to provide more predictable and stable payments for renewable fuel production and to ensure that the Program supports the most viable projects leading to long-term sustainable growth in the renewable fuel industry.

ecoENERGY for Biofuels
Program Design Changes

Previously (April 1, 2008-December 13, 2009)	New As of December 14, 2009
Variable incentive rate calculated and paid quarterly based on market conditions	Fixed, declining incentive rate with monthly payments *(retroactive to April 1, 2008)
Same eligibility criteria for all producers	New eligibility criteria have been introduced. “Existing producers” will be defined as those capable of producing biofuel by March 31, 2010.  “New producers” will be defined as those that, although not producing by March 31, 2010, are able to demonstrate an “advanced state of readiness” as defined by the Program.
Assess and approve applications in the order in which they are deemed complete (subject to funding availability and fuel type as needed to meet Program volume target)	New merit-based assessment criteria for project selection has been established for projects (new producers) demonstrating the  minimum threshold of “advanced state of readiness”
Construction deadline of March 31, 2011	Construction deadline of September 30, 2012
30 percent cap – No individual company will receive an operating incentive on volumes that exceed 30 percent of the Program's total eligible volumes based on fuel type.	30 percent monetary-based cap for renewable alternatives to diesel. 30 percent cap of total eligible volumes will remain the same for renewable alternatives to gasoline
Funding profile based on demand projections prior to Program launch.	Reallocation of Program funds within the existing fiscal framework will better align funds to the actual volumes expected for the remaining years of the Program.

Moving Forward

On December 14, 2009, stakeholders were informed of Program changes and asked to express, by December 21, 2009, their intention to participate in the Program under the new rules and to self-identify whether they are “new” or “existing” producers in accordance with Program definitions.

Program administrators will contact all those who express an interest in participating in the Program and fully explain the process moving forward.

For more information please visit “Application Requirements”  web pages.