Frequently Asked Questions

1. How can I obtain more information or application forms for the ecoAgriculture Biofuels Capital Initiative?

Detailed program information and forms can be obtained directly from the ecoAgriculture Biofuels Capital (ecoABC) Initiative

The mailing address for the ecoABC Initiative is:
ecoABC
Agriculture and Agri-Food Canada
930 Carling Avenue
4th Floor, Room 499
Ottawa, Ontario K1A 0C5

The email address to request forms and additional information is: ecoABC@agr.gc.ca
The fax number is: 1-866-309-4255.

2. Why was the ecoABC Initiative created? How does it benefit agricultural producers?: The ecoABC Initiative was created to provide an opportunity for agricultural producers, including co-operatives, to diversify their economic base and participate in the biofuel industry through equity investment/ownership in biofuel production facilities. As well, ecoABC will help achieve the federal government's goal of achieving an average of 5% renewable content (for example ethanol) in gasoline by 2010 and a 2% renewable content in diesel fuel and heating oil by 2012.

3. Who can apply for funding under the ecoABC Initiative?: Eligible applicants include corporations (including co-operatives), individuals, and partnerships. Applicants cannot be subject to controlling interest by a federal, provincial or municipal government.

4. What types of projects will be funded by the ecoABC Initiative?: Funding will be provided for the construction or expansion of transportation biofuel production facilities in Canada that use agricultural feedstock to produce the biofuel. As well, a minimum level of agricultural producer equity investment is required in the projects.

5. What are the equity investment requirements of agricultural producers?

Applicants must demonstrate that their project has new equity investments from agricultural producers equal to or exceeding five percent (5%) of the eligible project costs. A maximum of $1 million investment per individual agricultural producer will be recognized when calculating the total agricultural producer investment in a project, although the actual individual agricultural producer investment may exceed this $1 million. This calculation approach is intended to broaden the participation of agricultural producers in the program.

The project must maintain at least the minimum level of 5% agricultural producer equity investment (as a proportion of eligible project costs) for up to two years after construction is completed and biofuel facility starts to produce biofuel at its certified nameplate capacity (the annual production capacity of the facility as certified by a professional engineer). If the agricultural producer equity investment drops below 5% prior to this 2 year period, the ecoABC contribution will become immediately repayable to the government.

6. Who is considered to be an agricultural producer?: For the purposes of ecoABC, agricultural producers are defined as persons who filed their Canadian income tax as farmers in at least one of the five years prior to the signing of an ecoABC Contribution Agreement with Agriculture and Agri-Food Canada.; For individuals operating corporate farms, an individual will be deemed to be an eligible agricultural producer if he/she holds at least 20% of the corporation's outstanding common shares (voting and non-voting).; Status Indians who do not file income tax returns but can demonstrate that they carry on the business of farming on a reserve in Canada may also be defined as agricultural producers for the purposes of this program.

7. Do facilities have to meet minimum biofuel production requirements in order to be eligible?: The minimum annual transportation biofuel production capacity of a new facility, or the increase in production capacity of an existing facility must be a minimum of 3 million litres per year for biodiesel facilities and 5 million litres per year for fuel ethanol facilities.

8. What costs are considered eligible for reimbursement under the ecoABC Initiative?

Eligible project costs under the ecoABC Initiative include:

contract costs and fees for design, engineering, procurement and construction services including intellectual property licenses;
costs associated with environmental assessments for the Project (subject to a limit of 10% of all Eligible Project Costs claimed);
costs for production systems and equipment, including monitoring and tracking systems;
salary costs or fee components for design, engineering, procurement and construction;
salary costs or fee components in contracts for implementing and commissioning the Project.

9. How much and what type of assistance is available under the ecoABC Initiative?

ecoABC is a $200 million multi-year federal initiative, of which $186 million is available for contributions, ending on March 31, 2011

For each project, ecoABC may make a repayable contribution of up to $25 million or twenty-five percent (25%) of eligible project costs, whichever is less.

An applicant may invest in several ecoABC projects. Each project would be individually subject to the funding limits of $25 million or twenty-five percent (25%) of eligible project costs, whichever is less.

10. How is the ecoABC repayable contribution amount determined?

Repayable contributions will only be provided for up to $25 million or twenty-five percent (25%) of eligible project costs, whichever is less. The contribution will be calculated in terms of an incentive rate in cents per litre (¢/L) multiplied by the increase in the nameplate capacity of the renewable fuels facility.

The incentive rate increases as a function of the level of agricultural producer investment in the project. The incentive rate for facilities with the minimum agricultural producer investment (5% of eligible project costs) is eight cents per litre (8 ¢/L). This rate increases with the level of producer investment up to 20 cents per litre (20 ¢/L) for producer equity participation of 20% or more.

Graph of incentive rates

11. When is the repayable contribution disbursed to the applicant?: ecoABC will pay the contribution amount after construction of the biofuel facility has been completed and it has commenced the production of biofuel at its certified nameplate capacity (the annual production capacity of the facility as certified by a professional engineer).

12. What are the repayment terms under the ecoABC Initiative?

Repayment will be determined by a project's profitability.

Repayment will begin on January 1, three years after the facility begins producing at its annual production capacity (nameplate capacity), and will continue for seven subsequent years or until repayment totals the amount of the original contribution to the recipient, whichever comes first.

For each calendar year, the recipient will repay an amount calculated as of December 31st of each year as follows:

(Average Gross Income Per Litre − $0.20 per litre) × the total biofuels produced in the previous twelve months × 0.25.

If the Average Gross Income Per Litre is $0.20 or less, the repayment for that year will be zero.

13. Will proposed projects have to complete an environmental assessment?

Yes, projects proposed under the ecoABC Initiative must be assessed under the Canadian Environmental Assessment Act (CEAA) prior to a contribution agreement being signed. The environmental assessment process may take a number of months to complete and early submission of professional environmental documentation required by AAFC to meet obligations under the CEAA will be critical to a timely review. AAFC has developed guidelines for ethanol and guidelines for biodiesel projects to assist applicants in understanding the type of information that must be submitted by the applicant regarding an environmental assessment. As well, applicants will be required to comply with all other applicable federal, provincial/territorial and municipal laws and regulations with respect to the environment.

Costs associated with the project's environmental assessment may be considered as eligible project costs subject to a limit of 10% of all eligible project costs claimed.

14. Will retroactive costs be considered?: Costs incurred before the effective date of a contribution agreement are not eligible for reimbursement by AAFC. The only possible exception will be environmental assessment costs incurred within twelve (12) months prior to the date a contribution agreement is signed with AAFC, but incurred no earlier than April 1, 2007 (the date the ecoABC Terms and Conditions came into force), up to an amount equal to 10 percent (10%) of eligible project costs.

15. Are there any deadlines for applications? Is there a provincial allocation of funding?

There are no formal deadlines for submitting applications to the program.

Funds will be allocated to approved projects on a first come first served basis with the exception of the first year of the program. During the first year, which ends April 30, 2008, the Government of Canada will enter into contribution agreements on a first-come first serve basis within each province or territory to a maximum total of $50 million per province or territory.

16. How is "First come first serve" defined?: "First-come first served" order is established when a proponent has submitted all documentation required in the ecoABC Funding Proposal, demonstrated that the project meets all eligibility criteria, completed the environmental assessment process, and agrees to sign the standard ecoABC contribution agreement contingent upon Agriculture and Agri-Food Canada (AAFC) approval of the funding. The Letter of Interest is not used to determine the "first come first served" order of applications.

17. How long will it take for applications to be processed?: Applicants will proceed through a multi-stage process that begins with their submission of a Letter of Interest to the ecoABC program. After an evaluation of the Letter of Interest, which will be completed within 30 days of receipt, applicants who meet the basic eligibility criteria will be invited to submit a more detailed proposal called the ecoABC Funding Proposal. The actual processing time of applications will depend on the complexity and completeness of the proposals.