Increasing the use of cleaner, renewable energy is an important part of the Government of Canada's comprehensive strategy to reduce emissions of air pollutants and greenhouse gases, helping to protect the health of Canadians and our environment.

The Government of Canada has committed up to $2.2 billion to support an integrated Renewable Fuels Strategy.  The ecoENERGY for Biofuels program is a key component of this strategy and will invest up to $1.5 billion to increase the supply and availability of cleaner, renewable fuels such as ethanol and biodiesel. In fact, proposed regulations will require a five percent renewable fuel content based on the national gasoline pool by 2010.  The next phase for these proposed regulations will be a requirement for an average two percent renewable content in diesel and heating oil by 2011 or earlier.  This requirement is however conditional upon the technical feasibility of biodiesel use being demonstrated under the range of Canadian conditions.

When the two percent mandate is implemented, it is expected that Canada will need close to three billion litres of renewable fuels.

Compared to gasoline, grain-based ethanol can reduce greenhouse gas (GHG) emissions by up to 40 percent on a life-cycle basis. The GHG reduction for biodiesel can be at least  60 percent compared to diesel. Once the five percent and two percent  mandates are in place, it is estimated that these regulations, in conjunction with existing provincial regulations, could reduce Canada's annual GHG emissions by four million tonnes.

National Renewable Diesel Demonstration Initiative

The objective of the National Renewable Diesel Demonstration Initiative (NRDDI) is to address industry and end-user questions about renewable diesel use by demonstrating how it will perform under Canadian conditions.

Among the questions that have been raised are:

• impacts of cold weather;
• impacts of long-term storage (with or without temperature fluctuation);
• interaction of renewable diesel from various feedstocks with seasonal variations of ultra-low sulphur diesel (ULSD);
• impacts on emerging heavy truck engine technology (in particular 2007 and 2010 emission controls);
• impacts on engine and heating systems components; and
• distribution infrastructure.

These questions will be addressed by providing non-repayable contributions to approved projects that demonstrate aspects of renewable diesel use and/or distribution in Canada. Funded projects may demonstrate one or more of the following:

• the use of various blend levels;
• the use of fuels produced from various feedstocks;
• the use of renewable diesel in various applications that diesel fuel is likely to encounter in Canada; and
• the infrastructure for renewable diesel storage and distribution.

Funding has been made available to facilitate demonstration projects of different scales in both the on-road transportation and off-road sectors.

The NRDDI is administered by Natural Resources Canada.