Canadian Fuels Assoc.: Federal Budget 2023 is a missed opportunity for Clean Fuels Investment

The Canadian Fuels Association (CFA) and its members [1] appreciate the Federal Government's recognition for low-carbon fuels, including biofuels and hydrogen, in Budget 2023.

The lack of targeted measures in support of Made-inCanada low-carbon fuels is a missed opportunity. CFA officials say they will continue to collaborate with government as part of the ‘biofuels consultation' to advance clean fuel production in Canada.

“The U.S. Inflation Reduction Act (IRA) is a game-changer and Federal Budget 2023 falls short in establishing investment parity for clean fuel production in Canada”, said Bob Larocque, President and CEO of the CFA.

“Billions of dollars of investments are awaiting final decision and lack of clarity and targeted measures only adds to the uncertainty for the future of low-carbon fuel production in Canada”.

The potential consequences of the IRA for Canadian low-carbon fuel production are becoming clear.

“We're already seeing the first dominoes start to fall, with significant announcements being made in the U.S., making us more reliant on U.S. imports to meet our climate goals and undermining our energy security and selfsufficiency. Opportunities for family-sustaining, valueadded jobs through the fuel supply chain will also be lost to the U.S. CFA and our members will actively continue to work with federal government to ensure investments for low-carbon fuels remain in Canada.” Larocque continued.

Three years ago, CFA released Driving to 2050 which highlighted the opportunities and importance of scaling up domestic, low-carbon transportation fuels, as they continue to diversify the energy mix on our way to Net-Zero.

CFA members currently have plans to implement largescale renewable diesel, sustainable aviation fuel (SAF), hydrogen and ethanol projects, as well as investments worth $8B with the potential to deliver 10 MT of greenhouse gas (GHG) reductions.

As noted in Federal Budget 2023 “hydrogen, biofuels, and biomass—will be critical sources of energy where electricity would be inefficient or impractical”.

However, lack of clarity, urgency and targeted measures will limit our near-term potential to decarbonize the transportation sector that Canadians rely on today.