Canadians farmers have had a hard time embracing biofuel policy the same way that producers south of the border have, says Shaun Haney, founder of RealAgriculture.
He told the MNP Ag Connections Conference in Medicine Hat in November that as Canada continues to struggle to get its agriculture commodities into China, a shift of outlook is needed.
WHY IT MATTERS: As Canadian farmers look to markets for their commodities, North America is putting a push toward ethanol.
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“Canadian farmers have a hard time totally getting their head around and supporting it because people will often say, ‘I want the government out of stuff, I don’t want industrial policy, I don’t want nation building. We can’t create demand through government policy’,” he said.
“But, that is exactly what the (Renewable Fuel Standard) is in the Untied States.”
The U.S. sees 40 to 45 per cent of its corn crop going into ethanol, from which Canada has benefited. While Canada continues to focus on raw canola seed in China, the largest purchaser of Canadian processed canola meal and oil is the United States. The dairy industry is using the meal, and the oil is being used for renewable diesel.
“It’s one of the reasons why Canada is being very shy and hesitant to lift those EV tariffs (to China) because they don’t want to hurt the Americans,” Haney said.
“That applies to negotiating some of the biofuel policy for corn and canola with the Americans. So it’s a bit of a sticky wicket for for the government.”
U.S. President Donald Trump’s administration has influenced some biofuel policy in Canada, he said. The nation is seeing tremendous growth of domestic crush, reaching a record 11.4 million tonnes in 2024-25.
“It’s driven by our clean fuel regulation, and also taking advantage of some of those U.S. tax incentives, something like what they call 45Z (Clean Fuel Production Credit),” said Haney.
Canadian canola is considered a domestic feedstock in the U.S., which was lobbied for by the Canadian government and agricultural industry. However, there’s a caveat attached.
A Renewable Identification Number is attached to it for the biofuel industry, and the Canadian product is valued at a 50 per cent of the written value, which is a deterrent for U.S. processors.
Trade talks are trying to fix the problem to help Canadian exports.
Haney stressed that the Canadian agricultural industry needs to change its outlook on the biofuel industry as capital investment looks to politics to lower the risk.
“Canadian farmers see biofuel policy a little bit different than American farmers. If you grew up in Iowa, ethanol is like religion. It is like they insert the microchip very early. We have not grown up in that. We don’t think about it that way,” said Haney.
“We think about, ‘How do we get the product from our farm to the elevator on rail to the Port of Vancouver’. That’s been the market that we have been used to, and I think that’s going to maybe change here in the future.”
