Nationwide regulations requiring two per cent biofuel in Canada's diesel and heating oil will take effect as planned on Canada Day.

Environment Minister Peter Kent on Wednesday announced the amended Renewable Fuels Regulations, which were published for public comment in February, will come into force on their expected start date of July 1.

An 18-month exemption to the new rule will apply in Quebec and the Maritime provinces until Dec. 31, 2012 to allow eastern refiners more time to install biodiesel blending infrastructure, the government said.

Newfoundland and Labrador, meanwhile, will get a permanent exemption on renewable content in the diesel fuel and heating distillate oil sold in that province, "to address the logistical challenges of blending biodiesel in this region," the government said.

The government said its approach balances the "possible competitiveness impacts on eastern refiners with the need to minimize delays to support the Canadian biodiesel industry in moving forward."

"The steps we are taking on renewable fuels, combined with those of the provinces, will ensure a volume of renewable fuel that will reduce annual greenhouse gas emissions by about four megatonnes a year -- the equivalent of removing one million vehicles from the road," Kent said in a release.

"Consistent market"

The Canola Council of Canada, which has backed research on canola-based biodiesel's efficacy in Canadian weather conditions, described the biofuel mandate as "an important achievement."

"Today's announcement will create a consistent domestic market for canola seed of about one million tonnes annually," council president JoAnne Buth said in a separate release.

The council said the canola industry "continues to urge the federal government to take the next step of investing in biodiesel plant capacity in Western Canada."

"This will enable Canada to produce its own biodiesel and keep the jobs in Canada," Buth said.

Most of the canola-based biodiesel now being used to meet inclusion standards already in place in British Columbia and Alberta comes from Canadian canola that's processed into biodiesel in the U.S., then shipped back to Canada, the council said.

Saskatchewan has already scheduled its own two per cent renewable diesel mandate to kick in July 1, 2012.

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Federal mandate for biodiesel to move ahead, Feb. 10, 2011