September 12, 2007

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

Budget 2007 made $500 million available over eight years to Sustainable Development Technology Canada (SDTC) to invest with the private sector in establishing large demonstration-scale 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 renewable fuels. Whereas use of traditional renewable fuels 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 Next-generation Biofuels Fund. The Fund will:

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

Who can apply?

An eligible project must:

• be a first-of kind facility that primarily produces a next-generation renewable fuel at large demonstration-scale;
• be located in Canada; and
• use feedstocks that are or could be representative of Canadian biomass.

For the purposes of this Fund, a next-generation renewable fuel 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.

For more information on the eligibility and selection criteria for the Fund and how to apply, visit SDTC's website at www.sdtc.ca.