Canada accuses US of dumping renewable diesel despite being America’s biggest oil supplier

In a twist of trade irony, Canada has accused the United States of dumping subsidized renewable diesel into its domestic market — even though Canada is, by far, the largest exporter of conventional crude oil to its southern neighbour.

The drama began in March when Tidewater Renewables Ltd., a British Columbia-based company, filed a complaint with the Canada Border Services Agency (CBSA), claiming that low-cost, US-subsidized renewable diesel was flooding the Canadian market and causing serious financial harm. 

The CBSA launched an investigation into the alleged dumping under former president Joe Biden’s so-called ‘Inflation Reduction Act’ with the Canadian International Trade Tribunal (CITT) following up with a preliminary inquiry.

But on Monday, the CITT brought the case to a halt. 

After reviewing the evidence, the tribunal concluded there was “no reasonable indication that the imported renewable diesel had caused, or threatened to cause, injury to Canadian producers.” As a result, both the tribunal and CBSA will terminate their investigations and the case will not proceed to a full inquiry.

The accusations centered on US tax incentives for renewable fuels, such as the now-expired Blender’s Tax Credit and the new 45Z Clean Fuels Production Credit introduced under the U.S. Inflation Reduction Act. 

Tidewater argued these policies allowed American producers to undercut Canadian prices, leading to lost market share and declining profits.

In a statement on Wednesday, Tidewater said it is carefully reviewing its options and said it is considering filing an amended or new complaint with the CBSA.

"While we are disappointed with the Tribunal's decision, Tidewater Renewables remains committed to free and fair trade in Canada's renewable diesel market,” said CEO Jeremy Baines.

“Our view remains that the facts support a finding that unfair trade practices by the United States have caused a flood of subsidized and dumped renewable diesel into Canada. This flood of imports has significantly injured Tidewater, currently the sole Canadian producer of renewable diesel.”

Renewable diesel is a biofuel that's chemically similar to petroleum diesel and can be used in existing diesel engines without modification. 

It's produced from renewable sources like vegetable oils, animal fats, and recycled cooking oil through a process called hydrotreating. Renewable diesel can reduce greenhouse gas emissions compared to petroleum diesel and generally improve air quality. 

Ironically, Canada supplies the US with the bulk of its imported crude oil — more than 60% in recent years — a commodity far more central to the North American energy mix than renewable diesel. 

While renewable diesel represents a small but growing market (estimated at $1.4 billion annually in Canada), it’s a fraction of crude oil in the bilateral energy trade.

Calgary-based Parkland Corp. — which on Monday became the target of a $13-billion freindly takeover by Dallas-based Sunoco — previously cited similar challenges when scrapping plans for a renewable diesel facility in Burnaby, BC.

While this particular case has been closed, the episode highlights the growing tensions in the clean energy sector and the complex dynamic between two countries that are, at once, allies, energy partners — and most of all — competitors.