Canada’s push for greener fuels may end up driving the country to depend more on American gas and diesel, according to an internal briefing from Environment Minister Julie Dabrusin’s department. Officials said Canadian producers of biodiesel and other low-carbon fuels are struggling to meet federal mandates introduced last year.“Canada’s low carbon fuel industry is struggling,” read the May 14 memo on the Clean Fuel Regulations, per Blacklock's Reporter. It said US production of renewable diesel has grown rapidly thanks to state subsidies and tax breaks, flooding the Canadian market with cheaper imports and threatening the survival of domestic producers.Many Canadian biofuel projects, particularly those for renewable diesel and sustainable aviation fuel, have been paused or cancelled due to these pressures, though some are still proceeding, the note added..The Canada Energy Regulator has counted 14 gasoline refineries in the country, but warned that “gasoline markets are highly localized.” The Clean Fuel Regulations, in force since 2023, require steadily increasing amounts of ethanol and biodiesel in fuel blends, with cabinet estimating the rules will add 13¢ per litre for gasoline and 16¢ for diesel.While critics have long said the policy would raise fuel prices, no other federal report has previously warned it could increase reliance on U.S. refineries.A 2023 Budget Office analysis estimated the regulations would cost households hundreds to thousands of dollars annually, even without import surcharges. The impact was highest in Alberta ($1,157 a year), followed by Saskatchewan ($1,117), Newfoundland and Labrador ($850), Nova Scotia ($635), Manitoba ($611), Prince Edward Island ($569), New Brunswick ($501), Ontario ($495), Québec ($436) and British Columbia ($384), reflecting differences in fossil fuel use across provinces.
